This was our first wholesale deal, and it would have been impossible without Lisa Hoegler, from the LA South RIEA walking me through all the mines. Our buyer is a woman I met at Nicole Jaffe's SGV Fortune Builders meetup in Monrovia. It's a small group, but we've become sort of a mastermind group (or hive mind?). This was a great learning experience, because many of the issues that could come up in a wholesale deal did. The seller was a broker, but in my opinion, not a very experienced one. I was diligent in getting everything in text or email, so we could avoid the he-said/she-said issues which would have arose otherwise. After we closed, my buyer was very happy, because I staid throughout the transaction, keeping in touch with buyer, seller and escrow and pushing the process forward. We had a 15 day close, a 5 day inspection period and we were taking over the tenant, which has been given 60 days notice, and is already packing.
It's all about solving problems. The seller needed to sell ASAP, but had a tenant in place. Other buyers had seen the property but didn't want to deal with the tenant in place. I spoke with the seller and with the tenant. We worked out the contingencies in the contract to protect my buyer from getting stuck with a tenant after the 60 days, and I negotiated a lower price on the property due to the 60 days of holding time my buyer would have to wait before starting work. In the end, the seller got a quick close, the buyer got a great deal and the tenant is almost done packing.
A big plus for the tenant was when we told him to only move what he wanted, and to leave anything that he didn't, since we would already have a 40 footer there to deal with the demo. We also gave him 2 recommendations on movers we've had great success with. I believe these things helped the tenant move faster and with two big weights off his shoulders; no cleanup and good movers. Also since we are demoing the interior, we offered his full deposit, should he leave in time, and an extra $1500 if he was out in 30 days.
@Christopher Janney , you rock man! Good job! Keep crushing it.
Congrats! I love Lisa, I used to attend her meetings when I was in the South Bay! I would love to help you on the next one! :)
Congrats! Awesome work!
Congrats on your first deal! Would you mind giving some of your numbers? What did you buy it for, resell for, closing costs (if any), etc?
@Garrett F Anderson Purchase price was $880K, wholesale fee was $10k. I had a buyer lined up before I even had the contract finished, so I had no earnest money deposit, no closing costs. What I did do is not only broker a very complicated deal with a seller (there was a tenant in place, and the seller didn't want to give 60 day notice until she had a signed contract....etc...etc.), but I stayed on top of the deal all the way to escrow, and was on the phone often between seller, title, escrow and buyer to iron out issues that flared up.
My repair estimate as almost dollar for dollar with my buyer's contractor, and my ARV was spot on with her selling agent. This was very important to the deal. A lot of investors will tell you they don't trust wholesalers' numbers.
Having a buyers list is SO important. If I had to take the time to look for a buyer when this deal came to me, I would have probably had to come up with a %3 EMD, and would not have been able to move as fast as we did. We had a 5 day inspection period and closed in 15 days. I earned my money. ;^)
Because I was there for my buyer throughout the process, she is my best ally in gathering even more buyers, and is a fantastic reference for me.
@Christopher Janney It definitely sounds like your preparedness played a key part in your success on this deal. Thank you for sharing some extra details! That's awesome that your ARV and repair costs were so close. I am working under a wholesaler here in CLE so I'm just trying to learn as much as I can in order to better help him (and myself eventually).
@Garrett F Anderson I can't stress enough how important it is to walk every house you can, with a repair estimate sheet, looking for every issue, then going over it with a contractor (buy them lunch!) and see how your numbers are. Every morning, look at new listings on zillow, redfin or if you have MLS access and ask to see the the property. The other upside is you get to know a lot of agents in your area, give them your card, and let them know you are an investor and you wont make a high offer to get the house under contract, then beat the seller up for credits and adjustments, because that's just bad business, and not the way you work. Also, ask them if they would give you comps on the ARV for the property, then compare your own with theirs. Practice, practice, practice!
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