My husband and I are just getting started in RE investing. We have been working with a buyer's agent (seen about 10-12 houses, made one offer), familiarizing ourselves with our market, reading as many books as possible, and spending lots of time on BP and listening to BP podcasts constantly. We have also made connections with some folks we know that have done work around our house in the past (and with whom we have been extremely pleased), letting them know that we are looking for investment properties and also prepping them that we might be looking to them to do some work for us in the future. These include a siding company, carpet cleaning company, a flooring guy and a painting crew. All people we know and trust and with whom we have a good rapport already. We are also plan to start attending two REIA meetings in our area in November.
The next thing we are looking at is the possibility of using a wholesaler. I have registered on one wholesaler's site that I found from a posting on CraigsList, and also registered on MyHouseDeals with a 3-month paid subscription. I'm currently reading a book on wholesaling to gain more insight on how things work from the wholesaler's perspective.
My question (finally) is this: Can some BP members detail for me the steps from start to finish of a wholesale transaction from the eyes of someone who is brand new to investing? Since we are so new, going this alone - without an agent, which I'm assuming we wouldn't use if we are working with a wholesaler, correct?- makes me a little nervous. I know we would have to be able to determine comps and cost of repairs independently of what the wholesaler advertises, because I've already seen by looking at listings in my area on MyHouseDeals that the ARV listed is WAY high.
Any advice and guidance would be most welcome.
@Julie Kern Congratulations on getting started and welcome to BP! You have chosen to engage in a fantastic community, and you will find most here to be very helpful and knowledgeable.
You are definitely on the right track and are doing all the right things. Letting people know that you are investing in RE, making connections with potential partners and contractors, listening to the podcasts and educating yourselves. I've heard it said that all wholesalers have the same disease; they overestimate ARV and underestimate repairs. I have met some great wholesalers, and some not so great. They can be a great resource, but it's also imperative that you do your own due diligence, which you are doing, well done! While you generally wouldn't work with an agent on wholesale transactions, you definitely still should in general. A good agent that is also an investor (this is imperative!) will be a valuable resource for you. They will be able to share market trends; ADOM (Average days on market), new listings, existing inventory, and can certainly come across great deals for you.
I would strongly suggesting getting @Brandon Turner 's book, 'The Book on Investing in Real Estate with No (and Low) Money Down'. If you get the whole package, you get access to hours of interviews with wholesalers, in addition to everything you would want to know about wholesaling detailed out in the book.
Additionally, both of J Scott's books are beyond helpful when it comes to flipping and estimated repair costs. I think you can get all 3 for less than $100, and if you read nothing else for the rest of your investing career, you will be in good shape!
I don't get any commission by the way:) I have read a lot of Real Estate books, and have found the BP books and guides to be the most practical, informative and detailed of any I have read.
Your local REIA is a great place to start, I have made some fantastic connections in the short period of time I have been attending meetings.
Hope some of this was helpful, feel free to reach out!
Thanks for the detailed answer, @Andrew Davis ! I will check out the books you recommended and certainly try to be as cautious and discerning as possible when evaluating wholesalers and their deals.
Thanks @Andrew Davis ! I appreciate the shout out!
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.