wholesale under contract

17 Replies

Ok, let me start of by saying I'm very new at this.... Now with that disclaimer, I just got a deal under contract yesterday for a 2bed 1bath in Winter Garden, FL for about $41k... to be honest I'm not sure if it's a good deal and I may have a hard time finding a good buyer but I'll try to see where it goes. I'm not sure what steps I should take from here. I got the seller to sign the contract. Should I go to a title company now or later? 

Unfortunately @Marquest Page if you don't know whether or not it's a good deal, you aren't going to convince an investor to purchase the property. Have you checked comps in the area? Have you estimated the cost to rehab the property? Those are the first two steps before you start doing any title work. Start with comps and rehab costs. How is the roof? How are the mechanicals, windows, etc...? Do you have any more details you can share?

Originally posted by @Rob Beland :

Unfortunately @Marquest Pageif you don't know whether or not it's a good deal, you aren't going to convince an investor to purchase the property. Have you checked comps in the area? Have you estimated the cost to rehab the property? Those are the first two steps before you start doing any title work. Start with comps and rehab costs. How is the roof? How are the mechanicals, windows, etc...? Do you have any more details you can share?

Originally posted by @Rob Beland :

Unfortunately @Marquest Pageif you don't know whether or not it's a good deal, you aren't going to convince an investor to purchase the property. Have you checked comps in the area? Have you estimated the cost to rehab the property? Those are the first two steps before you start doing any title work. Start with comps and rehab costs. How is the roof? How are the mechanicals, windows, etc...? Do you have any more details you can share?

 Well I've seen the comps in the area and they vary. I've seen similar properties sell for as low as 30k and as high as 72k. I do know the roof was fixed 5 yrs ago. I did a walk through of the property myself but I don't know what all to look for. I made sure to put contingencies in the contract that subject the property for inspection before closing since this is my first deal. I won't make a habit of this but needed to protect myself from my iignorance. I'm not sure if this would work for a flipper to invest but maybe a but and hold invester might be whom I'd market to.  I know the average rent in that area is $750 a month for similar units. 

Why is the owner selling the property?

You might want to buy the book on estimating rehab costs and take a close look at the whole list to see what needs to be done.

If you sell it as a rental it usually just needs to be in livable condition but not necessary updated. If you are selling it to a flipper you will probably want to look at updating cosmetics as well.

Why are the comps so different? size, location, quality?

Maybe if you post the address and some photos we could get a better idea as you already have it under contract.

503-871-2961
Originally posted by @Austin Youmans :

Why is the owner selling the property?

You might want to buy the book on estimating rehab costs and take a close look at the whole list to see what needs to be done.

If you sell it as a rental it usually just needs to be in livable condition but not necessary updated. If you are selling it to a flipper you will probably want to look at updating cosmetics as well.

Why are the comps so different? size, location, quality?

Maybe if you post the address and some photos we could get a better idea as you already have it under contract.

This is a picture from the county assessor's website. The address is 400 Charlotte Street Winter Garden, FL. It's a 858sqft 2 bed 1 bath single family. This was a probate lead and the seller was the executrix of the estate.  I have yet to take pictures of the inside but I'll be getting some taken this weekend. The previous owner (the decedent) owned the property since 1975.

Well just taking a quick look at what has sold around there seems to be mostly foreclosures. It is hard to say for me without knowing the area but I would think the ARV could be around 70k. I would not take my word for it though as I don't really know much about your area but based on comps that is what I can see it going for.

I would try to find some investors in your area to see if they can give you more input.

Don't forget to subtract the rehab costs as well.

503-871-2961

Marquest,

I am a fairly new investor/wholesaler as well. I have been a wholesaler in Charlotte, NC for a year and I went through the same learning curve that you are going through. I commend you for not only being a action taker but for also being brave enough to ask questions. Everybody who commented in this post gave great advice. The first thing you want to do is do your due diligence by researching the comps and rehab cost before you take it to a investor. Buy attempting to do your part, some investors will be willing to teach you how to be a great investor but if you take deals to investors without attempting to research the comps or rehab/cost, some investors may not take you serious. Take pictures of everything in the house especially parts of the house that needs to be rehab. Showing the pictures to the end buyer  may give them a better understanding of what type of rehabs the house may need. Nevertheless, congrats on being a action taker and good luck on your first deal!

Marquest Page Good for you! You put in work, you were fearless, and you got a deal under contract! Congratulations! Now to sell your deal I have a few tips to sell your deal: #1 is the absolute BEST way to sell your deal and that is to contact every single wholesaler in your area and offer 50% of the fee to JV with them if they find you a buyer. When I had a deal that I wasn't sure I would be able to sell, it was gone in 24 hours when I found a JV partner who had tons of buyers. #2 is put it on the MLS as a flat fee listing. It should cost around $200-$300 but you're going to get so much exposure it's going to be worth it (list it as a cash/hard money only contract for purchase deal-just assign it to them and get a $3k deposit). #3 is send out postcards or flyers to ALL the recent cash and hard money sales in the last 6 months advertising your deal. Include photos, address, contact number, deposit fee, website if any, email, etc. #4 Craigslist & postlets #5 imagine yourself going to the title company picking up your check 3 times a day. Feel relieved that you were able to sell your deal so easily and quickly and now you want to help other newbies like others have helped you. Good luck!!
Originally posted by @Michael Askew :

Marquest,

I am a fairly new investor/wholesaler as well. I have been a wholesaler in Charlotte, NC for a year and I went through the same learning curve that you are going through. I commend you for not only being a action taker but for also being brave enough to ask questions. Everybody who commented in this post gave great advice. The first thing you want to do is do your due diligence by researching the comps and rehab cost before you take it to a investor. Buy attempting to do your part, some investors will be willing to teach you how to be a great investor but if you take deals to investors without attempting to research the comps or rehab/cost, some investors may not take you serious. Take pictures of everything in the house especially parts of the house that needs to be rehab. Showing the pictures to the end buyer  may give them a better understanding of what type of rehabs the house may need. Nevertheless, congrats on being a action taker and good luck on your first deal!

 Thank you for the input. I see research on rehab cost is the next step before I get an end buyer so I'll get on that asap. This is definitely helpful. Thanks again. 

Originally posted by @Ana G. :
Marquest Page

Good for you! You put in work, you were fearless, and you got a deal under contract! Congratulations! Now to sell your deal I have a few tips to sell your deal: #1 is the absolute BEST way to sell your deal and that is to contact every single wholesaler in your area and offer 50% of the fee to JV with them if they find you a buyer. When I had a deal that I wasn't sure I would be able to sell, it was gone in 24 hours when I found a JV partner who had tons of buyers. #2 is put it on the MLS as a flat fee listing. It should cost around $200-$300 but you're going to get so much exposure it's going to be worth it (list it as a cash/hard money only contract for purchase deal-just assign it to them and get a $3k deposit). #3 is send out postcards or flyers to ALL the recent cash and hard money sales in the last 6 months advertising your deal. Include photos, address, contact number, deposit fee, website if any, email, etc. #4 Craigslist & postlets #5 imagine yourself going to the title company picking up your check 3 times a day. Feel relieved that you were able to sell your deal so easily and quickly and now you want to help other newbies like others have helped you. Good luck!!

Ana these are awesome pieces of advice! JV had crossed my mind as well as CL. That MLS idea is pure genius! Very helpful. Thank you!

@Marquest Page   Post it onto your local facebook Real Estate Site as well..that's how I sold my first deal...If their isn't one...make one : )

@Marquest Page Congrats on getting your first contract! You need to provide all the numbers you have now to even think of knowing if this is a good deal or not! You have no time for questions, you need answers. Let us know everything about the deal to know what your options are.

Now comes the hard work. The goal should be to have everyone walk away with a win. That "win" depends on YOU!

Know your numbers! You should have done more research and learning to know if this was a good deal or not BEORE you put that house under contract. Now that you have, it's not worth crying over spilt milk. Get those rehab estimates, get the comps, get the title report. These will help you evaluate ARV, condition and clearance of the property. These are what investors will be looking for to determine if it's a deal they want to pursue (close on) or not. If you found a "deal", you will have no problem finding a buyer.

You may have sunk the ship before it left port! Determined on all those variables I just mentioned, you may have priced yourself out of the wholesale market. Don't start panicking! This might be a good market for those rehabbers that can do the work themselves and sell confidently at FMV or higher. Depends on the location and neighborhood. Look for JV (Joint Ventures) with rehabbers. For true JV, you need to bring something to the table. You have half the equation, the contract. The second half would be the funding.

Look for funding! If you have priced yourself out of the wholesale market (anything above 70% ARV- your cut, rehab, asking price, etc), in order to preserve your reputation and close this deal, you have to get creative. Talk to HML (Hard Money Lenders) to see if you qualify for an investor loan. Talk to Transaction lenders to double close, if you find a buyer. Talk to JV partners to close the deal (they can get funding and do the rehab-you get little equity but can realize $1,000+ for your effort). Then, close with the seller and buyer at the same time and you get your cut out of the buyer.

Don't play around! I'd say continue with your getting homes under contract, but next time, have some real numbers and folks in place post contract-signing to quickly move those deals. Some learning (big time) may be what you need to solidify your RE investing approach. This is wholesale, baby!

Don't think you will do this with no money, no time, no credit, successfully. It does take time, effort, understanding of the whole RE process, knowing rehab costs, calling and talking to sellers and buyers, etc. It's not a lazy man's cup of tea. However, as your business grows, you can employ some great time-savers to leave you more time to sort through actual deals than dealing with mass-mailing replies all day.

Reality Check! Remember that you are putting someone's real property on the line with  you taking control of this property. Now perform based on what you "promised" them. 

You're going to get slammed by the wholesale haters on this site. Don't let it get to you. DO the work, learn from the best, put forth a stellar performance and close this deal (even if you walk away with nothing) and make yourself, and all of us (all investors), look good. 

Originally posted by @John Hamilton :

@Marquest PageCongrats on getting your first contract! You need to provide all the numbers you have now to even think of knowing if this is a good deal or not! You have no time for questions, you need answers. Let us know everything about the deal to know what your options are.

Now comes the hard work. The goal should be to have everyone walk away with a win. That "win" depends on YOU!

Know your numbers! You should have done more research and learning to know if this was a good deal or not BEORE you put that house under contract. Now that you have, it's not worth crying over spilt milk. Get those rehab estimates, get the comps, get the title report. These will help you evaluate ARV, condition and clearance of the property. These are what investors will be looking for to determine if it's a deal they want to pursue (close on) or not. If you found a "deal", you will have no problem finding a buyer.

You may have sunk the ship before it left port! Determined on all those variables I just mentioned, you may have priced yourself out of the wholesale market. Don't start panicking! This might be a good market for those rehabbers that can do the work themselves and sell confidently at FMV or higher. Depends on the location and neighborhood. Look for JV (Joint Ventures) with rehabbers. For true JV, you need to bring something to the table. You have half the equation, the contract. The second half would be the funding.

Look for funding! If you have priced yourself out of the wholesale market (anything above 70% ARV- your cut, rehab, asking price, etc), in order to preserve your reputation and close this deal, you have to get creative. Talk to HML (Hard Money Lenders) to see if you qualify for an investor loan. Talk to Transaction lenders to double close, if you find a buyer. Talk to JV partners to close the deal (they can get funding and do the rehab-you get little equity but can realize $1,000+ for your effort). Then, close with the seller and buyer at the same time and you get your cut out of the buyer.

Don't play around! I'd say continue with your getting homes under contract, but next time, have some real numbers and folks in place post contract-signing to quickly move those deals. Some learning (big time) may be what you need to solidify your RE investing approach. This is wholesale, baby!

Don't think you will do this with no money, no time, no credit, successfully. It does take time, effort, understanding of the whole RE process, knowing rehab costs, calling and talking to sellers and buyers, etc. It's not a lazy man's cup of tea. However, as your business grows, you can employ some great time-savers to leave you more time to sort through actual deals than dealing with mass-mailing replies all day.

Reality Check! Remember that you are putting someone's real property on the line with  you taking control of this property. Now perform based on what you "promised" them. 

You're going to get slammed by the wholesale haters on this site. Don't let it get to you. DO the work, learn from the best, put forth a stellar performance and close this deal (even if you walk away with nothing) and make yourself, and all of us (all investors), look good. 

Well based on the comps the ARV should be 70k to 80k. I managed to get the seller under contract at $41,250. Today is my scheduled closing which I found an end buyer whom I assigned the contract to for a fee of $3,750.00. the property is a 2bed and 1bath home with about 858sqft of living space. This wasn't a property that would have been used for fix and flip but a good buy and hold cash flow property. I didn't really try to number crunch going into this and. I'll be sure to use more analyzing in my next endeavor. Thanks for the advice, it has shed more light to other aspects of this business that I didn't consider before.

Someday, I may look at buying one of your deals, lol.

Congratulations..  You're tying up someone's home when you don't have a clue of what you're doing.

Originally posted by @Phil G. :

Congratulations..  You're tying up someone's home when you don't have a clue of what you're doing.

 Well to my defense I made sure to be very open regarding the process to my seller. She was in no rush to sell fast so it gave me the ability to learn through the process. But thanks for the encouraging words Phil. God bless.

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