Cape Coral, FL · Member since 2008 · 469 posts · 32 votes
It seems to me like you'd need most importantly time to find your buyer, if you don't ideally have one ready with cash in hand at all times waiting for you to call them regardless of what you have, in which case however long you expect to take to get a buyer to decide they're interested you'd need to stipulate your inspection period AFTER that point. So when I hear/read people talking about about 7-10 day inspection periods it seems close. As a beginner I would imagine an inspection period no shorter than 15 would be sufficient. Is that too long?
... Which has got me wondering if the wholesaler should take care of the inspection. Does anyone do that? For one, they wouldn't have to worry about waiting on a buyer to come in on time to get that done, and it would also make the proposal to the end investor buyer more attractive to jump on. Or do too many experienced investors skip inspections anyway? Does anyone do this?
There are NO inspections during a wholesale transaction. The buyer is buying the property "As-Is" and 99% of the time these transactions are cash deals. No inspections take place.
No Inspectionsneed to take place. But a new wholesaler can gain a lot of credibility to their buyers list if they come to the table with a detailed scope of work, have enough pictures so that a GC can bid the process, and can also help out with that awkward situation where a new wholesaler may lose a deal because they have to "bring in a partner to look at the deal", and then "bring in another partner"
Most new wholesalers never get off the ground because they:
A) Don't know how to properly comp a deal. And are always on the high end of ARV
B) Don't know how to provide a Rehab Budget and scope of work, and quote "30k-50k"
C) Cash buyers in big flipping markets have to sift through a ton of deals and new wholesalers who don't have a reputation and have poor numbers get thrown to the bottom of the sifting pile.
There are NO inspections during a wholesale transaction. The buyer is buying the property "As-Is" and 99% of the time these transactions are cash deals. No inspections take place.
I send my contracts with a 30 day inspection period. If the seller objects, I'll then negotiate with them to 14-21 days. If I know the deals a slam dunk, I'll go as short as 3-7 days but that's only if I know it's a deal I can move to my list. Regarding doing an inspection, I've wholesaled hundreds of deals and not only have I never had an inspection done, not a single buyer has ever had an official inspection done. You want buyers on your list that know what they're doing and are ready to move forward after a 5 min walkthrough of the house. A home inspection would kill the deal for some potential investors and I believe it's their responsibility to do their own due diligence.
There are NO inspections during a wholesale transaction. The buyer is buying the property "As-Is" and 99% of the time these transactions are cash deals. No inspections take place.
No Inspectionsneed to take place. But a new wholesaler can gain a lot of credibility to their buyers list if they come to the table with a detailed scope of work, have enough pictures so that a GC can bid the process, and can also help out with that awkward situation where a new wholesaler may lose a deal because they have to "bring in a partner to look at the deal", and then "bring in another partner"
Most new wholesalers never get off the ground because they:
A) Don't know how to properly comp a deal. And are always on the high end of ARV
B) Don't know how to provide a Rehab Budget and scope of work, and quote "30k-50k"
C) Cash buyers in big flipping markets have to sift through a ton of deals and new wholesalers who don't have a reputation and have poor numbers get thrown to the bottom of the sifting pile.
Thank you all. Very informative answers, none clear cut but seems to be the case. I think I'll focus on getting my numbers as best possible and negotiate carefully inspection periods. Thanks!
Are you trying to wholesale off of the MLS? If that's the case you need to call it a 30-day feasibility period. You need to not use the standard Local MLS contract and have one specifically drawn up by a local real estate lawyer that give you more wiggle room.
@Benjamin Cowles find a mentor in your area, it will save you time and money, make sure they have track record, you will learn the real deal with them. The only thing I inspect for when putting a property on contract is the extent of the rehab on the mechanical side, (Termite Damage, foundation Issues, Plumbing, Electrical, Roof Replacement) and then on how much I want to spend on cosmetics (Paint, Flooring, Kitchen, Fixtures) etc. If you want to become a wholesaler, you need to put them on contract in as is conditions.
Build your buyer's list by joining FBook groups and messaging every person who posts about buying a home, ask each person their buy box criteria along with their email address, and input the information in a spreadsheet. Do that over and over, as often as you can, to build a massive buyer's list. As you get a property under contract to wholesale, you can send mass emails marketing your property to see if a buyer is interested.