Wholesale Hustle

2 Replies

I've been watching this property for a while now.  Over one year at least, maybe 18 months.  The property is vacant, in disrepair, and just about perfect for me.  The major problem was that the price was about twice as much as I thought I should pay for it.  

So I waited, and watched.  And watched and waited.  The property went from being listed, to being unlisted.  A few weeks later, it was listed for sale again, but only on one of the web sites I track.  The price was only slightly lower than before.  But it was a decrease, and that was good.  

Over the next few months, its availability seemingly stopped and started several times.  Sometimes the price was lower than before.  Sometimes it boomeranged back up to the original list price.  Sometimes there was a sign posted in the front yard, sometimes not, sometimes the sign was laying prone on the steps, sometimes resting against the house on the front porch, sometimes gone completely.  I couldn't figure out what the heck was going on with the house.

Then, a few months ago, I started frequenting Bigger Pockets and became obsessed with the forums here.  As anyone who visits these forums knows, there is a lot of discussion about wholesaling.  I never quite knew the term "wholesale" before as it pertained to RE, and I've gotten quite the education in that particular slice of the RE world.  A light bulb went off over my head, and I realized this house I'd been following for the last year and a half was being wholesaled.  The last listed price I saw for the house was exactly in the middle of what I wanted to pay and what it had been listed for before.

Armed with that knowledge, I finally called the number listed on sign.  I figured a wholesaler probably had a healthy markup and could stand to accept a smaller profit on a property that's sat on the market for over a year.  No answer.  I left a message saying I was interested in an all cash, quick close deal.  No one returned my call that day.  Nor the next day, or the next.  Three weeks later, this past weekend, I got a call from a guy who said he "represented" the house. 

He apologized for not returning my call sooner, and said the house had "sort of" been under contract for a few weeks, but that the situation was "fluid" now.  I asked was the price firm or could we negotiate.  He said the "current" offer was for the current full asking price and that he couldn't see accepting less from me.  I suggested he keep working that deal because I would not come very close to the asking price, and asked only that he call me back if the other deal fell through.

He indicated the other "current" deal wasn't exactly on the table any more, and asked what I would offer.  I told him.  He said he would have to run that number by his "partner" (whom he referred to as "he" and "him", so I took his partner to be a man) and that he would get back to me the next day.  Well it is now four days later and I've heard nothing.

Until today when I got email from a woman I met a couple of months ago.  She asked if I'd be interested in properties on the same street where this house was located.  She said she was working on "securing" the property, which I took to mean she was double wholesaling it.  Turns out it is the same house, but the price she quoted me was nearly as high as the original list price, 23% higher than the price still listed on two different places on the internet.  I told her my offer.  No deal, but she'd contact me about other houses in the future.

Okay, all that to get to where I am now.  I want to contact the owner directly.  Not just for my benefit, but for his.  He apparently wants to sell, but has been put on hold for over a year while some middleman tries to squeeze a bigger profit out of the house.  I want to buy, but not at the middleman's price.  I figure the price the homeowner wants is probably exactly where I want to be on the property.

I have contact information for the actual owner, and I think I should just get in touch with him directly.

Thoughts?

The only problem I see is that the "middlemen" have given the owner an unrealistic value of his property and therefor he's got an unrealistic figure in his head. This happens ALL the time where "wholesalers" blindly go in and offer a ridiculous price in order to tie up a property in hopes that they sell it to someone else. A good wholesaler knows how to market and knows how to price. 

If you go in with no contingencies and a quick close, you've probably got a decent shot. 

Originally posted by Account Closed:

If you go in with no contingencies and a quick close, you've probably got a decent shot. 

 That's what I'm hoping for, Braden.  I'm not concerned with the condition of the house.  I've had a good look at it and unless there's a foundation issue (of which I see no signs,) there's nothing that should arise to trip me up during reno.  Although, I do want to get up in the attic and check a couple of potential problem areas I see along the roof line.  Nothing that would derail the deal, but just so I'm aware of the severity (or not) of the problem.

Thanks for the response.

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