Help a new investor get into wholesaling

6 Replies

Hey guys,  I currently have a very strong background building houses, and have never been apart of a real estate transaction.  I am wanting to get into wholesaling in order to make some quick money to pay down the mortgages on our rentals.  I am having some trouble wrapping my brain around a few concepts. I have searched for answers but can't seem to find my exact questions.  I have read Phil Pustejovsky's book and watched tons of videos. I am on the cusp of spending the $15k to join Phil's training program.  Maybe someone can point me to a post or video or just enlighten me on these questions and save me the money:

1.  How are you finding these "distressed" deals?  It seems to me that most people are putting out signs such as the "we buy ugly houses", or maybe a craigslist ad.

2.  Exactly what type of contract are you using, and what are you saying to a homeowner to "tie up" the house.  Why would someone sign a contract with you which prevents them from selling their home, while they wait on you to find an investor buyer?  Is there a catch that I'm not aware of? My guess is that if you can't find a buyer, you are on the hook to purchase the home.  What if you can't get the capital to do this?

3.  Where do I get this contract?  I have asked my lawyer and several real estate agents, and they said just download one off the internet.  These seem to be geared toward traditional transactions, and I can't see how they apply to the creative transactions.

Other than that, this is how I am thinking the flow of the transaction goes:  find the deal -> "tie up" with contract -> find buyer -> sell contract to the buyer for a profit.  let the investor close with the homeowner.

Is that correct?

I am very excited, and willing to learn.  This is just very new.  Thanks for any help!

Hi Victor!

I'm pretty green to wholesaling as well. From what I gather, what you are asking for is to take a wholesale class, so what I might say be beyond the scope of this post and will probably require further details.

1. my marketing consists of high equity owners (who may or may not want to sell) and owners going through or to probate. 

2. You will want a contract that says that it is "assignable." Meaning you buy it at the end of the expiration date or assign it to an investor with money. I would not use the internet for legal documents, unless I could sit down with my lawyer and have hime view it. I would not take advice from real estate agents either, but that is just me, unless I know them personally and they want to spend the time building that relationship.

3. I would go to my local REAI meeting and find out who is a good real estate attorney and I would  discontinue cultivating a relationship with a lawyer who told me to find a legal document on the internet. 

But hey that is just me and the way I run my business. The greatest mistake I've made is inflating ARV and/or buying the property at a too high of a price. Don't make the mistake that I did and you'll do fine. Your buyers are your customers; make them happy and you'll generate more business. Good luck to you and I hope this helps

Hey Victor, want to mention that “We Buy Ugly Houses” is trademarked slogan of HomeVestors of America, Inc.

I appreciate the benefits it provides me as a franchise, but figured I should tell you that they protect the brand quite well.

@Victor Baronich Good on you for looking on learning something new to help you accomplish your goals. And seriously good job on asking these questions instead of impulse buying that course. The best way in my opinion is to drive for dollars. Just take a Saturday or a few hours when you have some to drive around neighborhoods for houses that have unkept lawns, overgrowing trees or that make you think what the hell is going on here. Write those addresses down!! Then look up the owners address on the local county appraisals website and mail them a letter stating you are willing to purchased their property. Another great tip is to go do this on trash day. Because if it looks run down and their isn't any trash out front, the chances are good that they aren't taking care of it and would consider selling. Now in regards to the training program I wouldn't purchase that course. Ask questions here on BP. There are plenty of knowledgeable and friendly wholesalers that are successful and are more Jam willing to  help you out and show you the way. Good luck!

@John Thedford   this person advertised homes he did not own on his website.. got a cease and desist.

after pissed off client filed a complaint at the Department of Real estate in Jackson.. I set up a transactional mechanism for him to stay legal we did that for about a year then he went his own way again.. and again got turned in and he got arrested on a Friday night and put in Jail over the weekend..

it also involved EM deposits that went missing.. so it was more than just selling RE without a license or owing it.. and he was high volume he was selling 2 to 3 a week..

The DRE in Jackson that runs the state is a small office you can walk right up to the counter most days and talk to an enforcement officer ( I have done it) just lay out what you want to do and they will tell you if it requires a license..

15k wholesaling course is a Joke.. its not 15k complicated.. and its also far more difficult than anyone leads on.. you need a lot of skills to do this correctly.

Originally posted by @Victor Baronich :

Hey guys,  I currently have a very strong background building houses, and have never been apart of a real estate transaction.  I am wanting to get into wholesaling in order to make some quick money to pay down the mortgages on our rentals.  I am having some trouble wrapping my brain around a few concepts. I have searched for answers but can't seem to find my exact questions.  I have read Phil Pustejovsky's book and watched tons of videos. I am on the cusp of spending the $15k to join Phil's training program.  Maybe someone can point me to a post or video or just enlighten me on these questions and save me the money:

1.  How are you finding these "distressed" deals?  It seems to me that most people are putting out signs such as the "we buy ugly houses", or maybe a craigslist ad.

2.  Exactly what type of contract are you using, and what are you saying to a homeowner to "tie up" the house.  Why would someone sign a contract with you which prevents them from selling their home, while they wait on you to find an investor buyer?  Is there a catch that I'm not aware of? My guess is that if you can't find a buyer, you are on the hook to purchase the home.  What if you can't get the capital to do this?

3.  Where do I get this contract?  I have asked my lawyer and several real estate agents, and they said just download one off the internet.  These seem to be geared toward traditional transactions, and I can't see how they apply to the creative transactions.

Other than that, this is how I am thinking the flow of the transaction goes:  find the deal -> "tie up" with contract -> find buyer -> sell contract to the buyer for a profit.  let the investor close with the homeowner.

Is that correct?

I am very excited, and willing to learn.  This is just very new.  Thanks for any help!

 Hi @Victor Baronich:

If you're willing to spend $15,000 just for a training program, may I suggest looking into a HomeVestors franchise (the "we buy ugly houses" people). You'd get so much more in addition to training, but that is included as well and all of these questions would be answered. Just a suggestion!

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