Buying a personal residence wholesale?

Question

I'm trying to buy a place where my family could move -- ideally a duplex or triplex, or maybe just a SFH. (We bought and rehabbed a triplex already as owner-occupants, so I have experience with fixing up a place and property management.)

I love a few neighborhoods that are somewhat outside our price range if I was really trying to buy a "forever" home. I'd be happy to find something that was more temporary, if we could hold onto it, but finding anything close to cash flow in Sacramento seems tricky even for triplexes and 4-plexes. So I've started to think about how I might be able to purchase something below market rate.

Should I start handwriting letters and door-knocking? That was my original thought, and I almost bought the list for the areas that we're targeting. But what would I do if someone was interested, call a realtor? And what if I found a deal that I didn't personally want? Should I go into this thinking like a wholesaler and build up a cash buyers list first? Could I just refer the would-be seller to another wholesaler or realtor?

Then it occurred to me, instead of finding sellers myself, is there a chance that we could just get on some wholesalers' lists as buyers? We could potentially pay more than a flipper, though we're not currently set up to pay in cash (though maybe we could get to be).

Or rather than getting ourselves connected to wholesalers, could we find a realtor with those kind of connections already?

Any ideas are welcome, or feel free to tell me if this whole way of thinking is harebrained -- is it impossible to merge the worlds of investing and retail buying?

Thanks!

Charlie Martinez · Answer

Hey Carrie, as a wholesaler, I do get approached quite a bit to find retail buyers deals at a wholesale level. I don't ever want to be rude so politely mention that I'll keep them in mind, and for a few years I did, but it has never worked out.

I wholesale in Southern California so my inspections are <3 days before we have to go non-contingent so it'd pretty much be impossible to get financing.

I've had some of these retail buyers tell me later that they found more success working with a real estate agent doubled with the knowledge and community that we learn and experience here at bigger pockets.

It's tough to get really cheap wholesale deals, but I think there's more deals on the MLS than people realize,

Pavel Shemyakin · Answer

Great question. I am out of San Diego and have been thinking about doing something similar. The problem for me is that i have zero interest being a wholeseller, so getting an entire system set up just to buy a personal residence seems a bit much. What am i gonna do with the leads if i get them?

At the same time, i feel like i cant really approach a wholeseller with this issue because the purchase would have to be Fannie Mae financed and most wholesellers make their bread by advertising fast, painless, cash transactions.

You and I are in the same boat. Let me know if you come up with something.

Julia W. · Answer

Hey @Carrie K. and @Pavel Shemyakin, how did this work out for you? Been considering the same. Thanks!

Charlie Martinez · Answer

I've worked with landlords that will buy wholesale all cash using hard money then refinance into conventional, though, you'd need to pay a good amount of points and interest, and that always seemed risky as it may not get financed.

If it's at a great price though I guess it doesn't matter!

Carrie K. · Answer

Thanks, Charlie -- I appreciate you sharing your experience. If I went and got enough to close in cash, would that make it possible for something to work, or is the entire process just too fast-moving for a retail buyer, do you think?

I've also been thinking about your point that there are more deals on the MLS than people realize and really trying to see the overlooked value, so I appreciate that comment as well.

Thanks again.

Carrie K. · Answer

Thanks, Pavel, and exactly! I'm not interested in being a wholesaler generally, so as much as I want to try innovative ways to find a deal, I'm wondering if it makes sense to put in the down payment of buying a list, mailing it every 6-8 weeks, etc. Since I figure the chances are 50-50 or less (total guess really) that a deal would turn up on my timeline, I'm concerned about wasting $1-2k.  If I could find a way to monetize whatever came my way, it'd mitigate that risk. (For instance, I wonder if I could find a realtor who'd be willing to give me some fraction of their fee if I sent a motivated seller their way and a deal actually went through.)

I'll let you know if I come up with something, and please do the same. Thanks for the reply and good luck!

Buying a personal residence wholesale?

Most Popular Reply