Hello, I was wondering if anyone out there could help lead me in the right direction. I have been trying to kick my wholesaling business off for a while now in the Marietta/ Cobb county area. The problem and challenge I am having is finding good deals.
From what I was told and how I was taught, good deals are made and not found. Doing internet searches and having many resources of other wholesale investors like myself is not beneficial because once I find it and it is being marketed, this means that it is already being stepped on and another wholesaler like myself already has it marketed with their fee already attached.
Can anyone give me advice on finding good deals that deal directly with home owners fresh off the press. Thanks!
Howdy- to be a successful wholesaler, you have to find your own properties. You are right that trying to wholesale other wholesaler's properties is not worth the time unless that wholesaler is on board with you and willing to give you a cut. You lose all credibility with your buyers if you are marketing another wholesaler's property at a higher price. Think about it from the investor's point. He/she get a property from wholesaler A at $25k and review it. Three days later they get it from you at $28K. They know exactly what you're doing and will probably never open another email from you.
To find your own properties - you either need to market for them (direct mail, bandit signs, Facebook posts, etc) or physically drive out and find them (Driving for dollars). Both of those options have numerous posts on BP that you can search and read about. In addition (and you may already have done this), you will want to learn some RE basics, contract basics, rehab basics, and build relationship with cash buyers and rehabbers. I would recommend that before you jump in the wholesaling pool- be willing to commit hour upon hours of self-education to learn RE and hours upon hours to find motivated sellers. Also be prepared for the mental rollercoaster of being in sales/marketing (which is what wholesaling really is). It's a fun ride but not the joyride gurus make i sound like.
@Dondrea Geter who told you good deals are made not found? What does that mean?
While good deals are a combination of finding and negotiating, they are 90% finding. There is no magic negotiation tactic that is going to Mir an unmotivated seller become motivated.
Thanks for that! I needed to hear that!
Well I say that because most deals you find already have a fee on them or a wholesaler that's marketing the property. Thanks!
Read the threads on wholesaling. In the wholesaling forum.
As a seasoned investor in a leadership role in my REIA, I tell new folks:
- wholesaling is the most difficult task in real estate!
- few who attempt even do one deal.
- You need amazing negotiation skills, sharp rehab cost estimation knowledge, and hard work marketing for motivated sellers with equity to give you.
Given I see few succeed at wholesaling the advice I give is:
- learn creative financing strategies. More often than in wholesaling these deals are welcomed by the sellers because they are stuck: under water, or not enough equity to sell with an agent, no funds to fix up to saleable condition.
- sandwitch lease option is a great way to make a few paydays, and help a break even seller get out of their house.
- same with buying subject to (to the existing financing) then sell on a lease and option (using time to create equity and your profit).
It only seems like the knowledge needed to be a wholesaler is easy, and cash needed is low. Both are wrong in my experience. It takes at least $500/mo in direct marketing costs mailing letters / post cards. Typically though the marketing costs run above $1k/mo. Or you can address the post cards yourself, but you still buy stamps and buy the lists.
Creative deals can be found off the expired MLS listings lists that a friendly agent can give you for free. Good luck.
Hey @Dondrea Geter you have to do the legwork and make the deal happen. In general, don't rely on other people's inventory because the other wholesaler really has no incentive to sell it through you (unless they are unable to sell it) and if you're putting your fee on top of theirs then it won't work. I would encourage you to try co-wholesaling (i.e. sharing the fees) if you don't want to do all the legwork and put in the marketing work to find the deals. Otherwise, I encourage you to follow @Adrien S. 's advice and go out and make the deals by negotiating directly with the sellers and locking the properties up under contract.
This advice is probably in the comments above, and I am too lazy to read them at the moment, but here is my take:
You have to get out and take action in order to find bonafied deals. Driving for dollars is a great strategy to use that doesn't cost you anything but gas and time. If you have a budget to work with, you can purchase lists and begin sending out mailers to absentee owners, people in foreclosure/shortsale situations, etc. There are ALWAYS deals to be had, especially now with the fact that many landlords who financed using those interest only mortgages at the height of the market are unloading those properties before the loans come due. Not a bit of principal has been paid down on those loans. Sorry for the tough love, but you have to get out there and make it happen if you really want it.