Real Estate Investor · Atlanta, GA · Member since 2013 · 122 posts · 36 votes
I'm just getting started in the "wholesaling houses" business. I have been reading conflicting information on what my first step should be. I've read that I should start with the end result and contact as many buyers as possible to find out exactly what it is that they are looking for before going out and getting contracts with sellers. On the other hand, I've read that I should get deals on contract first before contacting any buyers. I'm definitely confused as I do not want to get properties on contract without knowing if the deals are desirable for buyers. Any help would be appreciated! Thanks!!
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Great thing about BP, you'll get different answers and then you gotta figure out who's right.....
Okay, go get a place under contract, just any house, then I guess you have your weasel period for due diligence, then you start looking for buyers, they are all over the place. But, none of those buyers wants that house, you keep making excuses to get in the property trying to show it to anyone you can drage over there. A day left on your weasel clause, seller knows you've been dragging different people in there, wonders what the heck, how many partners have to inspect that place or how many inspections does he need to do?
well, no one wants the house. You call up and say deals off, I'm using my weasel clause to get out of this one.
Seller starts asking questions, how did the inspections turn out? Did any lender have it appraised? Well, it comes out you never got an appraisal (because you weren't ever going to buy the place) and you don't have inspection reports either. Then it all comes out....
So, the seller says, oh, you were just jerking me around, had me take my property off the market, go under contract and you just took people through there to see if they'd buy from you. You didn't act in good faith, I have damages from holding this property longer while you jacked me around and I lost another buyer, who has now bought another place. I'll be seeing you in court hot shot!
However, if you had talked to real buyers, found out what they wanted, the price range, the locations, the age, the style they like and picked thier brain you'd know what to look for. You would also know that none of the buyers were interested in that other house you are about to loose your shirt on.
A hustler buys apples and stands on the street corner to sell them in hopes he sells them, he could be eating apples. A business man knows his market, has buyers and then drop ships the apples from the seller to the buyer. Never touches the product.
Find your buyers, locate what they want and don't spin your wheels with stuff you may not sell. Then you just call them, send them by, if they like it, then show it, one out of three will usually buy, could well be the first one you call. No monkey ads, no fakey signs, no dragging just anyone through the properties, no more long weasel periods for time looking for buyers, no more ticked off sellers holding thier properties off the market while you go beat the bushes.
Ahhhh, I suggest you find buyers first, then the properties. :)
Real Estate Investor · Los Angeles, CA · Member since 2013 · 99 posts · 29 votes
13y
Get the deal's first. Buyers are everywhere and not too hard to find. Getting the deal should be your focus. If you have a real deal you shouldn't have any problems finding a buyer.
Real Estate Investor · Atlanta, GA · Member since 2013 · 122 posts · 36 votes
13y
Thanks for replying Eric! I just read "How to Start Wholesaling: Getting Past The Education and Into the Field" by Brandon Turner. Looks like in addition to finding deals I'll need to find a mentor. Do you know anyone in the Greater Atlanta Area or someone interested in the area looking for an intern to do some leg work? I am willing to do work for free in exchange for knowledge on how to be effective in this business. Thanks
Real Estate Investor · Los Angeles, CA · Member since 2013 · 99 posts · 29 votes
13y
I would check out if your area you live in has a local REIA, and also check on meetup.com for local real estate investing groups. Network with people there and develop friendships/relationships/and possible mentoring arrangements.
There are a bunch of posts and blogs that are specific to tips in getting a mentor. Here is one:
Investor · Wichita Falls, TX · Member since 2010 · 3k+ posts · 603 votes
13y
Hey Brian Watkins, Welcome to BP.
Although I agree with what Eric Hettena said, you should also be mindful of this as well. You need to know what your potential buyers will consider an actual DEAL first. Learn what constitutes a great deal, find them, and you shouldn't have a problem finding someone willing to work with you.
I suggest looking at what rehabbers consider their buying criteria. Also what buy & hold investors consider their buying criteria.
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
13y
I agree with Eric Hettena if you have a real deal the buyers will come.
Brian i'm in a similar situation as you wanting to get started in wholesaling but instead of you working for free (your time is worth money) you should have no trouble finding a mentor by offering up a cut of your first deal. They'll probably want you to do some birddogging for them, which is something you could get paid for, so instead do it for yourself then bring them in on the deal.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Great thing about BP, you'll get different answers and then you gotta figure out who's right.....
Okay, go get a place under contract, just any house, then I guess you have your weasel period for due diligence, then you start looking for buyers, they are all over the place. But, none of those buyers wants that house, you keep making excuses to get in the property trying to show it to anyone you can drage over there. A day left on your weasel clause, seller knows you've been dragging different people in there, wonders what the heck, how many partners have to inspect that place or how many inspections does he need to do?
well, no one wants the house. You call up and say deals off, I'm using my weasel clause to get out of this one.
Seller starts asking questions, how did the inspections turn out? Did any lender have it appraised? Well, it comes out you never got an appraisal (because you weren't ever going to buy the place) and you don't have inspection reports either. Then it all comes out....
So, the seller says, oh, you were just jerking me around, had me take my property off the market, go under contract and you just took people through there to see if they'd buy from you. You didn't act in good faith, I have damages from holding this property longer while you jacked me around and I lost another buyer, who has now bought another place. I'll be seeing you in court hot shot!
However, if you had talked to real buyers, found out what they wanted, the price range, the locations, the age, the style they like and picked thier brain you'd know what to look for. You would also know that none of the buyers were interested in that other house you are about to loose your shirt on.
A hustler buys apples and stands on the street corner to sell them in hopes he sells them, he could be eating apples. A business man knows his market, has buyers and then drop ships the apples from the seller to the buyer. Never touches the product.
Find your buyers, locate what they want and don't spin your wheels with stuff you may not sell. Then you just call them, send them by, if they like it, then show it, one out of three will usually buy, could well be the first one you call. No monkey ads, no fakey signs, no dragging just anyone through the properties, no more long weasel periods for time looking for buyers, no more ticked off sellers holding thier properties off the market while you go beat the bushes.
Ahhhh, I suggest you find buyers first, then the properties. :)
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
I'd also suggest you be upfront with the owner, what they want is the place sold, they don't care if you buy it or you sell it giving them what they need. Since you have buyers already, you can tell them that, that you can get them a quicker sale at the the price agreed, now you do your negotiation as to what they can get, then you can say, tell ya what, I can take care of this....trust me, they don't care if they are a motivated seller. FSBOs that ask way too much just because they'd like to sell are not real sellers. :)
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
Go here and order all the free kindle books, especially the group on wholesaling. Sure, they all sell programs as well, but there is tons of good info in these free books.
Flipper/Rehabber · Tampa, FL · Member since 2008 · 403 posts · 109 votes
13y
I go with the market. If it's a seller's market, I go find the deals first. There will be plenty of people buying. And, if it's a buyer's market, I go find the buyers first and find out what they are looking for.
Real Estate Investor · Atlanta, GA · Member since 2013 · 122 posts · 36 votes
13y
@Eric Hettena I will definitely be taking your advice on networking with some of the local investors at the REIA meetings. I found they meet every 1st Monday of the month in Atlanta. Thank you!
@Mehran Kamari That's excellent advice. I will be checking in with the local rehabbers and the buy and hold investors to see what their buying criteria consist of. Thanks!
@Bill Gulley You hit all of my concerns about getting a property on contract before knowing if its a "REAL" deal on the head. Reputation is everything and I want PLENTY of referrals so I don't want to go wasting a seller's time or my own. Going about it your way sounds like a plan. Thank you!
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
I kinda thought you'd see that.
Andrew has a point, to a point, know the market, but a seller's market is higher prices, if there are buyers they want a deal, tougher to do, a buyers market has lower prices, either way you can work the buyers side.
The market in your area will define your niche, I believe Tampa is larger than Daluth, LA is larger than both, if you have a million people the possibilities are much greater than a smaller 200,000 population. Good luck... :)
Flipper/Rehabber · Tampa, FL · Member since 2008 · 403 posts · 109 votes
13y
A seller's market has higher prices... but values are also rising. That means a buyer will be less picky because he knows his investment will be worth more tomorrow than it is today. Especially true with landlords.
A seller's market = fewer deals, but higher profit margins per deal
A buyer's market = more deals, but lower profit margins per deal
Personally, I like a seller's market better. I like making as much on one flip than I would on 3 flips in a slower market. When I say "seller's market," I'm not talking about a real estate boom. I'm talking about moderate rise in value, with lots of activity, both from investors and retail.
Hillsborough County (Tampa) has between 1.25 and 1.5 million people.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
I'd disagree on the market analogy, but yes a hot market, the velocity of transactions will ceratinly justify premiums in a frenzy. Seller's or buyer's market may not impact motivation as other factors, so to say more deals in a buyer's market, sellers may not be so motivated. Just saying, that's too simple, even as an observation.
Inventory is a critical issue to specialize in wholesailing, our MSA is only about a half million and inventory of doable wholesale deals is pretty low, limited pretty much to the natural fallout of life events, motivavtional factors of divorce, bankruptcy, death, foreclosure, health issues, etc.
1.5 million, that's alot of possibilities! Geeez, you could just work divorces and might pull a deal a week! :)
Investor · Atlanta, GA · Member since 2013 · 112 posts · 15 votes
13y
Hi Brian,
Welcome to BP. I'm also in the Atlanta market. There are plenty of buyers at the moment. I found the best place to find them is the local REIAs and they are usually specific about what they want which is good.
I joined the Georgia REIA (their HQ is not far from you - it's in Doraville) and they even have specific meetings on wholesaling and for local counties. I think Gwinnett county has a meeting in Duluth next week which may be close to you. Check them out at the below link:
Real Estate Investor · Atlanta, GA · Member since 2013 · 122 posts · 36 votes
13y
@Rachel Leonard Thank You! I didn't know there HQ was literally 20 minutes away from me. Best of luck to you. Maybe we'll cross paths in the near future!
Real Estate Investor · Atlanta, GA · Member since 2013 · 122 posts · 36 votes
13y
@Stephanie Carter Your welcome! Definitely read that article. It will probably lead you to a few questions of your own. The support on this site is excellent! I'm sure any question you have someone here will be glad to answer! Good Luck to you!
Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
13y
Originally posted by Bill Gulley:
So, the seller says, oh, you were just jerking me around, had me take my property off the market, go under contract and you just took people through there to see if they'd buy from you. You didn't act in good faith, I have damages from holding this property longer while you jacked me around and I lost another buyer, who has now bought another place. I'll be seeing you in court hot shot!
Um, okay, NO, this never really happens in the real world. Execute and terminate your contract properly. Inspection clauses are legitimate. If they weren't, then I don't think that they would be a mandatory piece of many state promulgated contracts.
People who don't wholesale for a living say things like this because for whatever reason, they're resistant to the simplicity of wholesaling. And believe me, there's plenty of resistance in these here forums.
After reading this whole thread though, it's quite obvious what you need to do first. It has nothing to do with finding buyers or sellers.
Learn what a good deal is
The best way to do that is to talk to some folks who buy them regularly. I would recommend the 80/20 rule to you. When you don't have a deal working, spend 80% of your time marketing, and 20% building your buyers list, and forging relationships. When you do have a deal working, spend 80% of your time closing the deal, and 20% of your time marketing, so that the pipeline does not dry up entirely.
Real Estate Investor · Atlanta, GA · Member since 2013 · 122 posts · 36 votes
13y
Jerry Puckett I realized that. I also asked the question of what is a good deal in the "The truth about Wholesaling" thread and located and obtained a mentor. Thanks for the info. I was on the same train of thought.
Real Estate Investor · Sugar Valley, GA · Member since 2015 · 11 posts · 1 vote
11y
There are a bunch of different takes on this Brian. Get the seller leads coming in and do deals. If you market the property enough you should have no trouble finding a cash buyer. That worked for me and my wife.