Rental Property Investor · Fairhope, AL · Member since 2017 · 70 posts · 52 votes
Hey fellow investors. This is my first wholesale deal and I need help! It's 4242 Bit and Spur Road Mobile, AL 36608. It's in Springhill. It's a 3/3 that could be turned into a 4/4. It's got a carport, patio, and double garage. Got it under contract for $400,000. ARV $650,000. I signed a standard real estate contract and added that the contract may be assigned. The seller agreed but requested that proof of funds would be shown so that she'll know the buyer can close. What are my next steps? How do I get an assignment fee? Do I refer a potential buyer to the real estate agent so they can inspect the property? Let me know what you think.
@Laura Verderber I just looked up the house on Zillow, it is listed at $400k after a price cut of $45k. That means that other investors most likely have already seen this and passed on it. Wholesaling tends to work better with off market deals.
In wholesaling you make your fee at closing by getting someone else to pay more for a property than you have it under contract for. So if you can get someone to pay $425k in this scenario then you get a $25k fee at closing.
As for the proof of funds, as an ethical wholesaler you should be prepared to close on this house if you cannot find a buyer. So you should show your proof of funds when you put it under contract. If you have experience flipping then you should have a solid rehab budget and if you expect the deal to work for someone paying more than $400k then it should definitely work for you at $400k.
Hey fellow investors. This is my first wholesale deal and I need help! It's 4242 Bit and Spur Road Mobile, AL 36608. It's in Springhill. It's a 3/3 that could be turned into a 4/4. It's got a carport, patio, and double garage. Got it under contract for $400,000. ARV $650,000. I signed a standard real estate contract and added that the contract may be assigned. The seller agreed but requested that proof of funds would be shown so that she'll know the buyer can close. What are my next steps? How do I get an assignment fee? Do I refer a potential buyer to the real estate agent so they can inspect the property? Let me know what you think.
Not trying to be rude, but why are you doing this if you have no idea what you’re doing. This is exactly why wholesalers get such a bad name.
Hey fellow investors. This is my first wholesale deal and I need help! It's 4242 Bit and Spur Road Mobile, AL 36608. It's in Springhill. It's a 3/3 that could be turned into a 4/4. It's got a carport, patio, and double garage. Got it under contract for $400,000. ARV $650,000. I signed a standard real estate contract and added that the contract may be assigned. The seller agreed but requested that proof of funds would be shown so that she'll know the buyer can close. What are my next steps? How do I get an assignment fee? Do I refer a potential buyer to the real estate agent so they can inspect the property? Let me know what you think.
Not trying to be rude, but why are you doing this if you have no idea what you’re doing. This is exactly why wholesalers get such a bad name.
I have several years of experience doing rehabs, rentals, and flips. I'd like to learn how to wholesale as well. No one knows what they are doing in the beginning. I thought Biggerpockets forums were for helping each other out. And yes, I bought a couple of courses on how to wholesale but of course it's better to ask people who have done it in real life.
Hey fellow investors. This is my first wholesale deal and I need help! It's 4242 Bit and Spur Road Mobile, AL 36608. It's in Springhill. It's a 3/3 that could be turned into a 4/4. It's got a carport, patio, and double garage. Got it under contract for $400,000. ARV $650,000. I signed a standard real estate contract and added that the contract may be assigned. The seller agreed but requested that proof of funds would be shown so that she'll know the buyer can close. What are my next steps? How do I get an assignment fee? Do I refer a potential buyer to the real estate agent so they can inspect the property? Let me know what you think.
Not trying to be rude, but why are you doing this if you have no idea what you’re doing. This is exactly why wholesalers get such a bad name.
I have several years of experience doing rehabs, rentals, and flips. I'd like to learn how to wholesale as well. No one knows what they are doing in the beginning. I thought Biggerpockets forums were for helping each other out. And yes, I bought a couple of courses on how to wholesale but of course it's better to ask people who have done it in real life.
But wouldn’t it have been better and more fair to the owner if you knew the process and had your ducks in a row?
You get your assignment fee when you pass the deal on for more than your contract price. You should have been building your buyers list out over the past months. The goal is to have a reliable group of credible buyers that can close quickly who are vetted to the point you know they can deliver the capital. I have been selling off my Baltimore portfolio and I continue to encounter low ball offers and untrained wholesalers who tie up my property while having no one to buy it. They turn ghost a few days before closing. What I don't understand is if you are experienced in real estate how could you have nearly zero knowledge of the wholesale process? You said you have flipped. This is similar to getting the property under contract and not having funding or having no concept of how to renovation. It may be hard at this point but if its a good deal, try shopping it to your local network. Good deals are hard to come by and if the numbers work and you know some accredited investors with resources, it will go quick. You are going to have to have the appropriate paper work and understand the dynamics of the deal good enough to present it. You need to know what the repair costs would be and the ARV (in relation to converting it). After this, I'd advise asking as many questions as you can here. I'm sure there are podcasts in this forum on the subject and start getting your list together. There are tons of resources online devoted to wholesale education. Good luck and let us know how it goes!
@Laura Verderber I just looked up the house on Zillow, it is listed at $400k after a price cut of $45k. That means that other investors most likely have already seen this and passed on it. Wholesaling tends to work better with off market deals.
In wholesaling you make your fee at closing by getting someone else to pay more for a property than you have it under contract for. So if you can get someone to pay $425k in this scenario then you get a $25k fee at closing.
As for the proof of funds, as an ethical wholesaler you should be prepared to close on this house if you cannot find a buyer. So you should show your proof of funds when you put it under contract. If you have experience flipping then you should have a solid rehab budget and if you expect the deal to work for someone paying more than $400k then it should definitely work for you at $400k.
My question is why the selling REA and seller ever agree to this. House must be a hard sell so your chance of selling for a profit would be low. Hopefully the seller has a high deposit amount for their sake.
You get an assignment of contract and specify your assignment fee and what you want to assign the property for. Your assignment fee will be paid upon closing. Let me know if you need a assignment of contract, happy to share
I'm a bit confused as to your setup, but it sounds to me like you are contracting the property at the same price it's listed on the MLS for, after it was already dropped $45k. If that's the case, you'll need an investor willing to pay over the MLS listing for you to make a profit. Since the owner has already lowered the price, it seems unlikely to me that the property is hot enough for an investor to pay you a wholesale fee rather than just wait until they can buy it themselves at $400k.
Usually if you're wholesaling an on-market property, you will want it locked up at such a lower price that an investor will be paying less than the listing for you to still charge an assignment fee.
You get an assignment of contract and specify your assignment fee and what you want to assign the property for. Your assignment fee will be paid upon closing. Let me know if you need a assignment of contract, happy to share
Yes, I'd like to see the contract. Please message me.
I'm a bit confused as to your setup, but it sounds to me like you are contracting the property at the same price it's listed on the MLS for, after it was already dropped $45k. If that's the case, you'll need an investor willing to pay over the MLS listing for you to make a profit. Since the owner has already lowered the price, it seems unlikely to me that the property is hot enough for an investor to pay you a wholesale fee rather than just wait until they can buy it themselves at $400k.
Usually if you're wholesaling an on-market property, you will want it locked up at such a lower price that an investor will be paying less than the listing for you to still charge an assignment fee.
The seller had it listed for $500,000 for 6 months. I offered $400,000. She said no so I walked. A month later she had her realtor call me over the weekend and ask if I wanted it before they lowered it to $400,000 on the MLS. I said yes. I had my contractor walk it. The repairs will be $100,000. I had 2 realtors comp the house. It came to $700,000. I'm saying $650,000 just to be conservative. There's room enough to make profit in this house. Oh, and I showed the seller my proof of funds so I can close and flip if I can't find a buyer. I'm in the middle of renovating two houses right now so I didn't want to add a third but I can handle if I need to.
The seller had it listed for $500,000 for 6 months. I offered $400,000. She said no so I walked. A month later she had her realtor call me over the weekend and ask if I wanted it before they lowered it to $400,000 on the MLS. I said yes. I had my contractor walk it. The repairs will be $100,000. I had 2 realtors comp the house. It came to $700,000. I'm saying $650,000 just to be conservative. There's room enough to make profit in this house. Oh, and I showed the seller my proof of funds so I can close and flip if I can't find a buyer. I'm in the middle of renovating two houses right now so I didn't want to add a third but I can handle it if I need to.
The seller had it listed for $500,000 for 6 months. I offered $400,000. She said no so I walked. A month later she had her realtor call me over the weekend and ask if I wanted it before they lowered it to $400,000 on the MLS. I said yes. I had my contractor walk it. The repairs will be $100,000. I had 2 realtors comp the house. It came to $700,000. I'm saying $650,000 just to be conservative. There's room enough to make profit in this house. Oh, and I showed the seller my proof of funds so I can close and flip if I can't find a buyer. I'm in the middle of renovating two houses right now so I didn't want to add a third but I can handle it if I need to.
According to Zillow the property is For Sale right now for $400k, and investors will see that if you try and wholesale the property to them above $400k.
It is certainly possible that the right investors did not see the property when it was listed before, but in general if something is on the MLS at $500k for 6 months before being lowered incrementally down to $400k, most investors are not comping the property at $650k without a significant amount of rehabbing work done to that property.
I'm not saying this can't be done, but I keep going back to the Zillow listing for the same price you have it locked up for as a big issue.
The seller had it listed for $500,000 for 6 months. I offered $400,000. She said no so I walked. A month later she had her realtor call me over the weekend and ask if I wanted it before they lowered it to $400,000 on the MLS. I said yes. I had my contractor walk it. The repairs will be $100,000. I had 2 realtors comp the house. It came to $700,000. I'm saying $650,000 just to be conservative. There's room enough to make profit in this house. Oh, and I showed the seller my proof of funds so I can close and flip if I can't find a buyer. I'm in the middle of renovating two houses right now so I didn't want to add a third but I can handle it if I need to.
According to Zillow the property is For Sale right now for $400k, and investors will see that if you try and wholesale the property to them above $400k.
It is certainly possible that the right investors did not see the property when it was listed before, but in general if something is on the MLS at $500k for 6 months before being lowered incrementally down to $400k, most investors are not comping the property at $650k without a significant amount of rehabbing work done to that property.
I'm not saying this can't be done, but I keep going back to the Zillow listing for the same price you have it locked up for as a big issue.
Yes, the repairs will be $100,000 to bring top dollar. I've got a potential buyer that is a contractor. Lucky guy can get it renovated cheaper than I can. Hope it works out.
Update: Everyone's afraid of the recession so no one bit at $400,000. I put up a new ad on Facebook. Do you think this is more enticing?
FATHER'S DAY SPECIAL! PRICE REDUCED! 3/3 single family home for $355,000. Turn it into a 4/4. ARV $650,000! Located in desirable Spring Hill. 4242 Bit and Spur Rd. Mobile, AL 36608.
I don't personally know any real estate investors who will be attracted to a "Father's Day Special" on an investment property, and it also seems slightly dubious to list the ARV of the home after someone adds an additional bedroom and bath. People will want to know what the ARV is for that property as a 3/3 right now.
It's not the type of advert the people I work with would go for, but maybe you'll have some luck where you post it on Facebook.
I don't personally know any real estate investors who will be attracted to a "Father's Day Special" on an investment property, and it also seems slightly dubious to list the ARV of the home after someone adds an additional bedroom and bath. People will want to know what the ARV is for that property as a 3/3 right now.
It's not the type of advert the people I work with would go for, but maybe you'll have some luck where you post it on Facebook.
Update: Decided to not wholesale and renovated the big darn project myself. Went $30,000 over budget. ARV a little higher than what I comped at so we'll see if we make that up when we sell it. I'll put up pictures soon. Looks so good.