Wholesaler or MLS for my first deal? Im in the Cleveland area.

11 Replies

Hello all, 

I am newer to REI and am looking to find a deal and close on it before the end of summer. I started by looking at properties on the MLS and using a realtor before I discovered more about the discounted prices wholesale properties can offer. What are the pros and cons of both methods?

Does anyone have any insight they can share abut what works best for them? My goal is to buy a multifamily property, rent and hold it.  I am in the Cleveland OH area.

Let me know what other details you need from me about my situation, thanks!

I don't see any cons of increasing the amount of people who could be feeding you potential deals.

I'm currently looking for my first investment property and am connecting with everyone possible in order to find a deal that works within what I'm looking for. 

@Spencer Cornelia I agree with you that there are no problems in looking at the different properties people present to me but was looking for more of the differences like buying all cash with a wholesaler or finding throught a private lender, the sold "as is" aspect to wholesale deals and etc.. compared to the MLS which I view as a more traditional approach.

Thanks! 

@Dimitri Metropulos Depends on how competitive your market is, Cleveland being in the mid-west/ major city I'd expect the MLS is highly competitive. That is true for my area as well.

My team and I decided to go off market, creating lists nobody else can get easily- tax delinquent, evictions, code violations, tall grass, no snow plowed etc. With some hard work and about $2,000 in marketing we landed our first deal. Flipping the property so that marketing will more than pay for itself, and there are more deals in the pipeline. 

I'm all for building a massive marketing machine. The triple M.

@Ken Nyczaj You are correct with how competitive the market is here.  I respect your strategy on creating your own pipeline to find deals compared to going through another wholesalers deal.  I think going off the market is what I have been leading towards and will ultimately do, I just need to align myself with a trusting GC and private lender so I am ready to jump on the right deal when it comes to me if I don't have the appropriate cash necessary for it.

You're always gonna get your best deals Off-Market....whether it's from a wholesaler or not.  Most cases you're gonna have to close with cash, so depending on how you plan on paying will determine which route you can go. Most wholesalers will ONLY accept cash buyers, NO hard money!

Originally posted by @David Bokman :

You're always gonna get your best deals Off-Market....whether it's from a wholesaler or not.  Most cases you're gonna have to close with cash, so depending on how you plan on paying will determine which route you can go. Most wholesalers will ONLY accept cash buyers, NO hard money!

Here in my market wholesalers accept HML and treat it the same as cash.

@Brian Garrett That's great, but it's not the same in every market. Here in Philadelphia most wholesalers including myself (60+ deals per year) will not accept hard money most times. For me personally, I will only let investors whom I've already done deals with to use it. Otherwise, most times I won't. That's the same for most of the other wholesalers that I know who all do volume. 99% of all my deals both residential and commercial are all cash deals.

@David Bokman Yes you are proving my point. Telling him "most wholesalers will ONLY accept cash buyers, NO hard money" can be misleading since he's not in your market. In my market HML is fine with every wholesaler I've ever been in contact with so it very well could be the same in Cleveland. Don't want him ruling it out when it may be just fine.

@David Bokman and @Brian Garrett Thank you both for the advice.  In Cleveland from the wholesalers I have talked with already they have said doing Hard Money would be an okay option.   I also agree that off market buying is going to ultimately be the way I get the best deal and returns.  

Any other advice you guys have about landing my first deal you guys have to offer I would love to hear it. 

@Dimitri Metropulos I guess it just depends on how competitive it is in your market.  In some area's here deals don't last longer than 5-10 minutes if not sooner. So I would say be prepared to act quickly if its a property that meets your criteria. Connect with all your local wholesalers and get on there buyers list, join local facebook groups with wholesalers in your market(my market has at least 5 of them, I'm sure your's does too).  It's gonna take some work.

@David Bokman I appreciate the advice and you are exactly correct. The market is hot and the deals go very quick, this is exactly what drove me away from the MLS because every house had multiple offers and was going far above ask. I have begun networking to get on buyers lists and anything I can do to get my name and what I am looking for out there. My next objective is to find a trusting GC in my area so that when I get a good deal I have someone that I can count on to make the necessary improvements.