Wholesaling?

25 Replies

I have 2 questions concerning wholesaling transactions and was hoping someone could shed some light on them:

1. Do you need a "power team" for wholesaling or can you just work with a realtor? Just wondering if I have to go out and find an attorney and accountant before I start submitting offers.

2. How do you pay your realtor or can you make offers without one? If I'm wholesaling deals that realtors are giving me, I would assume they're not getting a commission so how do you compensate them/keep them happy?

Thanks!!!

1.  "Power team" is Rich Dad, Poor Dad idiocy.  Never use the term again.

2.  You can make offers without a realtor.

3.  Realtors won't be giving you deals.  If for some inexplicable reason they do, their commission will be paid by the seller.

Thank you very much for the quick reply. How do you make offers without a realtor? Perhaps if I find them on Zillow or some other kind of site.

Originally posted by @Matthew Rembish :

Thank you very much for the quick reply. How do you make offers without a realtor? Perhaps if I find them on Zillow or some other kind of site.

 You fill out your state's standard form and send it to the listing agent, if it is a listed property, or to the seller if it is not.

If you are making offers on MLS listed properties, there is no reason why you should not use a buyer's agent.

What exactly is your plan here?  To make offers on listed properties and then sell them to private buyers?

Why not use an agent, since you are going to pay the commission anyway. Do this find an agent that will put the search criteria that you want into their MLS system and automatically you get notified from the listings that comes in. This is simple and effective.

Correct, I find a lot of properties on Zillow, Craigslist and Homepath sites and I am looking to wholesale them to come cash buyers that I have. I am still very green if you can't tell already so I'm looking for any kind of advice. I want to start off wholesaling but ultimately work my way into fix and flips. 

@Morry

So when you get these homes from a realtor and wholesale them, what does your realtor get out of the deal?

@Matthew Rembish  This is the problem with wholesalers. You need fresh leads, serious buyers hate to be called about a house they could have bought for 10k and passed on and have someone trying to sell it for 20k. Serious buyers look at these sites too, so real wholesalers have to have fresh OFF MARKET leads.

@Jeremy Tillotson Ok, so that's how you bypass the realtor. You're talking about FSBO's and vacant houses then right?

Originally posted by @Matthew Rembish :

Correct, I find a lot of properties on Zillow, Craigslist and Homepath sites and I am looking to wholesale them to come cash buyers that I have. I am still very green if you can't tell already so I'm looking for any kind of advice. I want to start off wholesaling but ultimately work my way into fix and flips. 

They don't have the internet where your cash buyers live?

@Matthew Rembish Why in the world do you think that you could resell a cash buyer a lead from Zillow, Redfin, Craigslist, or Homepath? Despite whatever you may have heard from the late night get rich quick scheme, or the weekend upsell conference, you cannot get something for nothing. If you cannot tell me as the end buyer what the ARV is, my rehab costs and my end profit, on a deal that I cannot get myself, why would we talk? Especially when your just pulling MLS listings that someone else has already put the time and effort into. Wholesalers need to provide so much more to their end buyers.

Go back and listen to every podcast from BP on wholeselling, there is a lot of useful info there. Checkout www.listsource.com, figure out your target market and start sending out mailers to garner those golden nugget off market leads.

I guess I figured if I could jump on a deal, even posted on a site, quick enough, I might have a chance of wholesaling it but I can definitely see where you are coming from. I'll do some more research into this and listen to the BP podcasts. Thank you for all of the input, I really appreciate it!

@Matthew Rembish  This will be my giveback here. You want to market to people who want to sell but may not of thought about it. Find a niche and stick to it. From the eviction list (mail the landlords they may just want out), to the house that caught on fire, to the condemned house list, there are ways to make deals happen. Not even mentioned unpaid taxes, those are some more creative ones, the normal divorce, probate, bankruptcy ones are always out there to. I have even thought of marketing to nursing homes for there incoming people but never actually done it.

REALITY CHECK, WHOLESALING IS REAL,YOU CAN MAKE MONEY BUT IT TAKES WORK! Why else would I being willing to pay you 2-5k (sometimes more) over what you paid for a property, because us real investors know what it takes and value our time, and that of yours. IF you think u are going to call a craigslist add and then sell it for 10k more (it has happened) it is unlikely and the guy who did it probably had real cash with a real closing.

@Matthew Rembish  BTW I dont want to discourage you, keep up the work and ideas, I am just sick of what GURUS have turned wholesaling into, making money while they sleep, thats how people make money in there sleep with real estate, by selling overpriced courses.

I totally understand and appreciate your input. Above anything else, I consider myself a realist and I don't buy into any of those get-rich-quick schemes. You all can obviously tell that this is still new to me but real estate is something that has always fascinated me even more so than engineering, which is my current occupation. I'm working on rehabbing an REO property I purchased back in April as a primary residence but am looking to sell it soon. In conclusion, I'm just a guy looking to prepare and invest for his future and value any input the BP community can offer me. I've learned a lot just from this thread and want to thank everyone who has contributed

Originally posted by @Matthew Rembish :

I totally understand and appreciate your input. Above anything else, I consider myself a realist and I don't buy into any of those get-rich-quick schemes. You all can obviously tell that this is still new to me but real estate is something that has always fascinated me even more so than engineering, which is my current occupation. I'm working on rehabbing an REO property I purchased back in April as a primary residence but am looking to sell it soon. In conclusion, I'm just a guy looking to prepare and invest for his future and value any input the BP community can offer me. I've learned a lot just from this thread and want to thank everyone who has contributed

 I'm right there with you, rehabbing my first flip-in, with a separate rental. I also truly believe in Real Estate as the best means to building passive wealth. BP is by far the best resource I've found for great, realistic information. 

Good luck to you! 

Read again what Richard C. said. I don't think you can find any MLS deals. If they are on MLS, why does Buyer need us?

Sure way to kill your reputation-take a poor deal to the market, and claim to be a wholesaler.

My recommendation? Buy a simple 3/2 and start by renting-then selling.

@Matthew Rembish Friend you are saying the Realtors are giving you the deals, is it outside the MLS?

Originally posted by @Joseph Ball :

Read again what Richard C. said. I don't think you can find any MLS deals. If they are on MLS, why does Buyer need us?

Sure way to kill your reputation-take a poor deal to the market, and claim to be a wholesaler.

My recommendation? Buy a simple 3/2 and start by renting-then selling.

The reason I wanted to start wholesaling was to save enough money to buy and hold and flip. Is there a better way to go about doing this? Say, transactional funding or finding a hml?

Originally posted by @Morry Eghbal :

@Matthew Rembish Friend you are saying the Realtors are giving you the deals, is it outside the MLS?

They're not giving me deals yet, I was just wondering if that could be a possible source for finding deals but it seems like it wouldn't be.

Originally posted by @Morry Eghbal :

Why not use an agent, since you are going to pay the commission anyway. Do this find an agent that will put the search criteria that you want into their MLS system and automatically you get notified from the listings that comes in. This is simple and effective.

 Because if you don't have a realtor it gives you more price leverage.  They are more willing to discount a bit more if they aren't paying your realtor.  In essence you pocket some of the commission that would be paid.

Why not just get a license yourself?

Originally posted by @Matthew Rembish :
Originally posted by @Joseph Ball:

Read again what Richard C. said. I don't think you can find any MLS deals. If they are on MLS, why does Buyer need us?

Sure way to kill your reputation-take a poor deal to the market, and claim to be a wholesaler.

My recommendation? Buy a simple 3/2 and start by renting-then selling.

The reason I wanted to start wholesaling was to save enough money to buy and hold and flip. Is there a better way to go about doing this? Say, transactional funding or finding a hml?

HML's are pretty much worthless in my opinion. Every one I have been approved by will only fund about 65% of the purchase price plus rehab. On top of that they still take 25 days to close, and they are charging 5 points and 10% interest. Why not just get a conventional loan, cheaper, probably close faster, and not at the mercy of basically a loan shark.

Getting approve for HML was surprisingly difficult as well. In my opinion it's one of those situations where by the time you could utilize hard money, you won't need to.

Originally posted by @Matthew Rembish :
Originally posted by @Morry Eghbal:

@Matthew Rembish Friend you are saying the Realtors are giving you the deals, is it outside the MLS?

They're not giving me deals yet, I was just wondering if that could be a possible source for finding deals but it seems like it wouldn't be.

Realtor's won't find you deals.  I am just going from my area, Columbus, OH, but I would guess that more then half of the cash buyers that I know are licensed agents.  This means that they are find and offering on deals before your realtor ever see's them.

The fact is, if you want to wholesale, you need to find OFF-MARKET deals.  You find these by posting Craigslist ads, sending postcards, creating websites and driving traffic to them, etc. 

You need to do some more research on wholesaling.

John is right. Columbus is a hard market if you don't want to work. It has tons of good deals if you do exactly what he says. Don't be shy, get the word out there that you are ready to buy properties and be ready when your offer is accepted :)

+1 for John. 

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