I want to wholesale ... I dont know where to start. help!

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I want to wholesale ... I dont know where to start. help!

Haitham Abbasi
Investor · Glendale, AZ · Member since 2014 · 73 posts · 2 votes

Hello Friends,

I have searched, read multiple books , googled everything about wholesaling. Great strategy. period. 

The problem : I dont know where to start. please note. I do not have the cash. And need to finance on deals. 

I have read books that say that you need to find a real estate agent first, some say that you don't. Some say get buyers list first ... (which i do not know how to get the list). Some say know the market and where to advertise to invest ( I mean WHERE ? I am new and barely know whats across the city when it come to price ranges, and neighborhoods). 

Also some say get on Craigslist and post that you buy houses cash.

What I have done so far. 

- Bought business cards 

- Submitted ads on Craigslist yet no deals come through. And those who call me are not even motivated.

- Tried calling real estate agents, and they wont return my calls because (although I don't tell them) they sense that i dont have the cash... 

- Went to the court house (Phoenix Arizona) the court does not provide a list of people that are going in pre-foreclosure.

- made reward flyers. 

I am so lost that I do not what else to do. and where to start. I wont give up. But i need a system that works. Because my system of things that I have done has gotten me nowhere. 

I appreciate your answers my friends . And I hope this question benefits others as well .

Thank you

Haitham Abbasi

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Ciro Affronti
Investor · Scottsdale, AZ · Member since 2014 · 52 posts · 23 votes
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I don't know about everyone else in the Phoenix, Arizona area on BP, but I've seen a lot of competition amongst wholesalers. I get calls from a few wholesalers every month who want to start wholesaling properties or are new to the game, but they don't seem to have a lot of great deals. My family's companies have flipped hundreds of homes, yet we seem to deal with the same small group of wholesalers that we've been dealing with for years. Not to discourage you, but I'm just maybe giving some reasons I've seen that wholesaling is slow. There just aren't huge spreads on flips these days, and although very recently we've been seeing this start to change and flipping come back, it's slow. As an example, one of the largest wholesalers in Az that we've worked with for years just told me he sent out a direct mail distribution, and had mailers going out to almost half a million residents in Phoenix. His experience and economies of scale allows him to get a lot of prime deals because he reaches out to so many. Have you tried identifying top wholesalers and trying to connect with them and help you get started? Maybe if you can prove yourself valuable to them and their business they'd be willing to help get you started.

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  • Griffin F.
    Wolcott, CT · Member since 2013 · 139 posts · 49 votes
    11y

    BiggerPockets everything about wholesaling...not google!

    Real Estate Wholesaling Questions & Answers

    And a wealth of marketing tips

    Real Estate Investor Marketing Help & Advice

    P.S. - You make a buyers list, mainly via networking. Head to your local REIA will get you in the right direction

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  • Edgar Aguillon
    Investor · Hereford, TX · Member since 2013 · 70 posts · 5 votes
    11y
    Haitham Abbasi hey how's it going, PM me and I can give you some ideas on how to start. I've been trying different strategies that work in my area I'm no expert but I'm learning as the days go by. I like to help people out with the little that I know.
    0Reply
  • Ciro Affronti
    Investor · Scottsdale, AZ · Member since 2014 · 52 posts · 23 votes
    11y

    I don't know about everyone else in the Phoenix, Arizona area on BP, but I've seen a lot of competition amongst wholesalers. I get calls from a few wholesalers every month who want to start wholesaling properties or are new to the game, but they don't seem to have a lot of great deals. My family's companies have flipped hundreds of homes, yet we seem to deal with the same small group of wholesalers that we've been dealing with for years. Not to discourage you, but I'm just maybe giving some reasons I've seen that wholesaling is slow. There just aren't huge spreads on flips these days, and although very recently we've been seeing this start to change and flipping come back, it's slow. As an example, one of the largest wholesalers in Az that we've worked with for years just told me he sent out a direct mail distribution, and had mailers going out to almost half a million residents in Phoenix. His experience and economies of scale allows him to get a lot of prime deals because he reaches out to so many. Have you tried identifying top wholesalers and trying to connect with them and help you get started? Maybe if you can prove yourself valuable to them and their business they'd be willing to help get you started.

    2Reply
  • John Bevans
    Real Estate Investor · Waverly, NE · Member since 2015 · 5 posts · 5 votes
    11y

    In my experience if you want to wholesale successfully the number one skill that you need to figure out is how to find great deals (which doesn't mean it's the first but it is up there). The numbers have to work on the property either as a fix and flip or a rental (preferably both). There isn't an investor in the world who will touch a property that the numbers don't work out on. The way I make sure the numbers work is by taking the ARV (after repaired value, found by running comps on sold properties from past 90 days get a realtor on your team to do this) times .7ish (this is the amount that the average investor in your area wants off of ARV. in this case 30% but it can be as low as .9 in fast markets) minus the renovation costs (have multiple contractors give you bids if you are new) minus what you want to make and that equals your max offer. (ARV x .7) - reno - paycheck=max offer. then you offer less then that to open so you have negotiating room. If you can find deals where these numbers or rental numbers work on everything else is easy because you are providing massive value offering this to potential buyers.

    For a first step IMHO would say find a realtor, then find a couple cash buyers (investors) and then start finding deals.

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  • Haitham Abbasi
    OP
    Investor · Glendale, AZ · Member since 2014 · 73 posts · 2 votes
    11y
    Originally posted by @Ciro Affronti:

    I don't know about everyone else in the Phoenix, Arizona area on BP, but I've seen a lot of competition amongst wholesalers. I get calls from a few wholesalers every month who want to start wholesaling properties or are new to the game, but they don't seem to have a lot of great deals. My family's companies have flipped hundreds of homes, yet we seem to deal with the same small group of wholesalers that we've been dealing with for years. Not to discourage you, but I'm just maybe giving some reasons I've seen that wholesaling is slow. There just aren't huge spreads on flips these days, and although very recently we've been seeing this start to change and flipping come back, it's slow. As an example, one of the largest wholesalers in Az that we've worked with for years just told me he sent out a direct mail distribution, and had mailers going out to almost half a million residents in Phoenix. His experience and economies of scale allows him to get a lot of prime deals because he reaches out to so many. Have you tried identifying top wholesalers and trying to connect with them and help you get started? Maybe if you can prove yourself valuable to them and their business they'd be willing to help get you started.

     Hi Ciro.

    I really appreciate your knowledge, defiantly hit some good points that I will keep in mind. I am clueless as how the market is doing. I thought a real estate agent can help yet some on BP have told me that i need to figure out my financing strategy. Which I dint have the cash myself. 

    would it be possible to elaborate more on how to get in touch with the top wholesalers. I am willing to do whatever it takes to brush off some strategies that will help me, and I will be more than glad to assist with anything that i am able to do

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  • Haitham Abbasi
    OP
    Investor · Glendale, AZ · Member since 2014 · 73 posts · 2 votes
    11y
    Originally posted by @John Bevans:

    In my experience if you want to wholesale successfully the number one skill that you need to figure out is how to find great deals (which doesn't mean it's the first but it is up there). The numbers have to work on the property either as a fix and flip or a rental (preferably both). There isn't an investor in the world who will touch a property that the numbers don't work out on. The way I make sure the numbers work is by taking the ARV (after repaired value, found by running comps on sold properties from past 90 days get a realtor on your team to do this) times .7ish (this is the amount that the average investor in your area wants off of ARV. in this case 30% but it can be as low as .9 in fast markets) minus the renovation costs (have multiple contractors give you bids if you are new) minus what you want to make and that equals your max offer. (ARV x .7) - reno - paycheck=max offer. then you offer less then that to open so you have negotiating room. If you can find deals where these numbers or rental numbers work on everything else is easy because you are providing massive value offering this to potential buyers.

    For a first step IMHO would say find a realtor, then find a couple cash buyers (investors) and then start finding deals.

     John ! great points. How do I start , what should I do, Step 1? Step 2 ? I am aware of the things that you have mentioned. I need my first step because it seems like I have over whelmed myself with so much information from reading that i dont know where to start .

    I appreciate your response in advance

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  • John Bevans
    Real Estate Investor · Waverly, NE · Member since 2015 · 5 posts · 5 votes
    11y

    For a very first step I would say get a real estate agent and start making offers based on the equation I gave you above. And here is what you say to your real estate agent. "Hello my name is ____. I am an investor and my strategy is to buy, fix and sell a property where I can turn a $20,000 to $25,000 profit. I am looking to be in and out of deals quick." I use this script even if fix and flipping isn't my strategy because most real estate agents don't want to work with wholesalers because they don't know what they're doing or want them to show 20 houses and offer half price on twelve of them. However if you know what you are doing and don't jerk them around you can so many deals with an agent that they don't want to work with anyone else. If they are skeptical then move on to the next realtor. Once you get one that is neutral or says "I can help you make more" then you ask your general questions. Where are the hot spots? Where are the investors making money (zip code ect.)? What price range of houses is the hottest selling right now? Once you've built a bit a rapport you want to get some listings to review. What I ask for is "starter homes" (these are different for every area but are generally 3 bed 2 bath and the price can vary wildly but in my area its around $100k) listed as-is, vacant, and/or has had a price reduction. All of those things indicate a motivated seller which is what you need if you are going to be buying at a discount. I also ask them to pull a list of the "cash solds" for the past 90 days in the area you are going to be working in (your realtor can do this in the MLS don't believe them if they say they can't) Once you have done that you can do two things.

    First start building your buyers list by taking that list of cash solds and opening up your county website somewhere on there you should be able to look up tax records. Then go through you list of cash solds and seach each property on the county website by the lot #, parcel #, or address (whatever your county website uses). On the tax page for every property you'll see the property address and the tax mailing address if they don't match you can bet that that is an investment property and you'll record the tax mailing address and any other relevant info. This is the start of your buyers list. That combined with going to my local REI club was how I got enough cash buyers to start wholesaling but there are literally hundreds of ways to grow your buyers list. How you don't grow your buyers list is by buying some list online (the 100 contacts for $19.99 crap).

    Second start making offers on houses. side note: I think of this in to categories MLS deals and non-MLS deals. My ratio is roughly 60:40. Your realtor gets paid their commission from MLS deal but I work out a flat fee with mine for the non-MLS deals but there are many other ways to do it. But since we're breaking in a new realtor we will stick to MLS deals. What I do (this is the way that I do it there are many other ways) is look at all of the deals that come through the search that my realtor set up and if a property meets my criteria I will take the asking price times a multiplier. This is my truncated way of doing my equation above so that I can be the first on these deals in the MLS. I use between .6 and .9 for my market. Right now I am using .73 but that is after lots of deals. That is my offer price, I will then send my realtor all of the offers that I am going to make (this happens every day with the new set of properties emailed to me). I adjust my multiplier so that I get a property accepted per number of offers (~40 if you only want the big deals and less if you want more deals). Once a deal gets accepted the key to making this work is have your realtor make 2 changes to the contract one have some sort of escape clause (ie. contingent upon partner approval) and have at least a 7-10 day "inspection period" so that you can go in and have your realtor run the comps you can get a rehab estimate from a contractor, take pictures, run the real numbers (the full equation) and make sure that this is a profitable property. Do not dawdle on this i try to get this done in 3 days so that I have time to market the property to my cash buyers. Once that is all done package it all up in a nicely formatted email and send it out to your buyers and they will run their own numbers and if you did your job right snap it up from you. If you run your numbers and the property doesn't work out that means you need to adjust your multiplier. If your numbers don't work out or you can't find a buyer (which I've never had happen on a good deal) just tell your realtor to drop the deal.

    Final note the reason this post is so long and that there are so many opinions on where to start is because real estate and wholesaling especially is a chicken and the egg problem, you need one to get the other. So my best advice is to start I know so many people who psyched themselves out of real estate because they tried to know everything first. If you are really worried you can go to a real estate attorney and pay them ~$300 to write up the purchase agreement with those two changes so that you know it is water tight. After that the worst you can do is upset some people if you have to drop a contract but it is not the end of the world.

    1Reply
  • John Bevans
    Real Estate Investor · Waverly, NE · Member since 2015 · 5 posts · 5 votes
    11y

    wow I didn't mean for that to get so long sorry :)

    1Reply
  • Haitham Abbasi
    OP
    Investor · Glendale, AZ · Member since 2014 · 73 posts · 2 votes
    11y
    Originally posted by @John Bevans:

    wow I didn't mean for that to get so long sorry :)

     Its absolutely fine, did you read 30 days of real estate by dean ? because that what I exactly did. I used the same exact words, and questions. said the first script to the receptionist, and ask the agent the questions. So Far NONE have responded to me, and I used Matt's script. 

    Does following the book work? I think i got frustrated when I got no calls back after calling ten offices of Keller Williams, REMAX... i mean some answered, and said the exact script. yet no new messages in my email.

    so my friend John, Do you suggest to keep going? what have worked for you?

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  • Ciro Affronti
    Investor · Scottsdale, AZ · Member since 2014 · 52 posts · 23 votes
    11y

    Haitham,

    John's reply above was really great too with a lot of good info. The best way for you to get in with wholesalers, agents, investors, etc is to bring them deals. Find a property on the MLS, auction.com, redfin.com, craigslist, or anywhere you can that you feel has great potential for a wholesaler to market to investors. You need to know what's a good deal first, because if you're a newbie the top flippers and wholesalers can separate a good deal from bad in about 3 seconds flat. Even if you can't put the deal together due to lack of financing, having these people see you have a good eye and can bring them good properties to market will get your foot in the door way faster than just calling and asking for them to bring you in or for agents to bring you houses. As far as finding wholesalers, I can think of a few suggestions for you. First would be to go to the AZREIA meetings here in Phoenix, there are a lot of wholesalers and investors there, and if you go early they have networking sessions where you can meet people who are like minded. Also check out Phoenix Real Estate club which is similar yet has a stronger emphasis on networking and making connections. You can also just look for advertisements from wholesalers, (their direct mailers posted or that come in the mail, their websites, craigslist, google, etc) and build a list of names to target and just start working through it. I wish there was an easier answer but you seem motivated so you just have to put in the time and be persistent.

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  • Natasha M.
    Investor · MD · Member since 2015 · 208 posts · 32 votes
    11y

    @Haitham Abbasi

     Welcome Aboard! what I suggest is to find cash buyers first because they'll tell you what they want. This way you can focus your search on homes and areas. Also, your future agent will appreciate that you're not just running all over the state looking for anything. 

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  • Tom Fields
    Wholesaler · Annandale, VA · Member since 2014 · 24 posts · 3 votes
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    Haitham,

    Forget emails and phone calls. People do not like to listen to people reading them scripts. Go to the physical office or meet your agent for coffee, shake hands and talk. If you know what you want, tell them. If not, ask them to help you get smart. John Bevans gave you a seminar in his one post on the how-tos. The advice to go to real estate investor meetings is great. You will meet real people who want to do business and help other real people. 

    Good luck. 

    Tom

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  • Brett Allender
    Middle River, MD · Member since 2015 · 6 posts · 1 vote
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    I am just beginning to wholesale also, and I "thought" going after listed properties on the MLS was "not" the best way to find deals. (?) Anyone can find a property that is listed. Off market properties put under contract seems like it would be a better chance of getting a deal to an investor. Am I missing something?

    Great info!

    1Reply
  • Haitham Abbasi
    OP
    Investor · Glendale, AZ · Member since 2014 · 73 posts · 2 votes
    11y
    Originally posted by @Tom Fields:

    Haitham,

    Forget emails and phone calls. People do not like to listen to people reading them scripts. Go to the physical office or meet your agent for coffee, shake hands and talk. If you know what you want, tell them. If not, ask them to help you get smart. John Bevans gave you a seminar in his one post on the how-tos. The advice to go to real estate investor meetings is great. You will meet real people who want to do business and help other real people. 

    Good luck. 

    Tom

     Yes thank you. There is a local wholesaling meeting two blocks away from my house that I found online, I will go an network an rub so knowledge off of local wholesalers

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  • Gregory A Merrill
    Real Estate Investor · Omaha, NE · Member since 2015 · 6 posts · 0 votes
    11y

    @John Bevans,

    I am a new investor here in omaha, havnt made a deal yet. I was reading through your post on here, which were great information. I was curious though as to what the criteria you have for homes your looking at for opportunities to make deals on. 

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