Will Wholesalers Work With Bank Financed Buyers?

8 Replies

Hi-

I'm trying to figure out my strategy to rehab my first house. I think For my situation I could get a conventional mortgage and fund the down payment & rehab costs myself. But now I need to find a deal! I don't think my strength is in the marketing end, so I was thinking I would like to work with a wholesaler, but it seems like wholesalers work with cash buyers only. An I mistaken in thi belief?

A couple of problems. Wholesalers don't usually have the time to work through a buyer's financing, and they'll want a decent non refundable EM. Also, you likely can't get conventional on something needing rehab.

@Account Closed I am in your boat. I am new to all of this too. I would continue networking with people on BP and tell everyone what your doing. In the last week of my new journey I've connected with a few friends and family that will be potential investors, I am a GC so I will take care of rehab, and read as much as I can on this site. Good luck, just keep networking and looking for houses.

Julie as Wayne pointed out a wholesaler would generally not have the time to wait on the 30+ days someone getting a retail loan would need to have. You might not have to have pure cash, but usually at least a private or hard money loan is needed for the speed.

The bigger point, as Wayne also said, is that more often than not the reason that someone is wholesaling a property is because it won't qualify for a conventional mortgage based on condition. It is certainly possible to get a purely cosmetic flip property that will qualify for a mortgage but within a 45min drive of Wayland I have seen about the same number of those as I have flying unicorns in the same area...

@Shaun Reilly I will have to keep my eyes out for those unicorns around here. ;-)

These answers are unfortunately as I suspected, but how does a person get started without a bank? I doubt a private money lender would be keen on lending a large sum of money to a newbie.

Fix and flippers often use hard money. You will still need a significant amount of your own cash but if you have some cash and a good deal you should be able to find a hard money lender.

Originally posted by @Julie Brevard:
@Shaun Reilly I will have to keep my eyes out for those unicorns around here. ;-)

These answers are unfortunately as I suspected, but how does a person get started without a bank? I doubt a private money lender would be keen on lending a large sum of money to a newbie.

I think they all get eaten by the rogue minotaur running around Rt30 heading towards the Natick Mall. :)

As Jon said Hard Money is a typical place to find funding as a starting rehabber when you don't have all the cash or close friends and family that want to fund you. If you have enough cash to have covered a down payment on a conventional loan and pay for the repairs out of pocket you should have enough for a HML. Pretty common setup is they will fund 60-75% of purchase and 100% of the rehab.

What is your reason for purchasing property?(flip,buyhold,rent,etc)

Where you planning to handle the rehab yourself?

Have you considered out of state property?

@Maurice Miller I plan to flip the property (or, properties hopefully as time goes by). I will definitely get a contractor- while we did the work ourselves on our first house, that was before we had kids. I am not considering out of state property right now for two reasons: I know my local market very well but I don't have the experience to jump to other markets. Also, I think I will need to be on site quite a bit to ensure the rehab timeline progresses well, so that rules out out of state for me, at least for now.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.