New flipper -- use wholesaler?

Question

Brand new flipper getting started. Haven't done any deals yet but pretty experienced in renovations. Market is hot here in Nashville, TN and properties don't stay on the market long. Just wondering if it makes sense to work with a wholesaler to find the first flip? I realize it will eat into my profits but I'm just wanting to get started and do our first deal.

Thanks for your time and attention!

Devan Mcclish · Answer

@Reggie Burnett using a wholesaler will get you good deals if you know the right ones. A lot of them push retail properties. And don't use the MLS. It's a waste of your time in this market. Go direct to seller.

Victor Gootee · Answer

Hi Reggie,

Two wholesalers that I know of in the area are @Blake NeeSmith and @Micah Copeland . I haven't bought a deal from them but I am on their mailing lists. I'm sure they would both be happy to add you.

Best of luck!

Matt Leavell · Answer

@Leland Smith if you got scoffed at then you probably made an offer that is reasonable, but may not have taken into account a location that is in a transition.  I would say, continue to make offers and you will eventually get one for a price that makes sense to you.  Remember, you only need 1.  Do not start letting seller dictate what you think is right for you.  Also, make sure you have plenty of options.  It makes it easier to tell a seller that they are crazy, rather than second guess yourself.

@Reggie Burnett I would certainly put feelers out with wholesalers.  I do not think that your decision should be a yes or no decision.  I think it should be a resounding YES to get on the wholesaler's mailing list and then analyze each deal as it makes sense for you.  Basically, your question is like saying do I want to fish in a creek or the Amazon River.  Choose the river so that you have a lot more options to choose from.

It would probably also be wise to simply sit back and watch what deals are being sent to you for 2-3 months so that  you have a gauge on what is reasonable in the market from a wholesaler's perspective.  BUT, you still must analyze what is reasonable for you on a deal by deal basis.

Cody Holbrook · Answer

Good question @Reggie Burnett.  I'm new to REI, and I've been wondering the same thing.

Patrick Sanders · Answer

No not really everybody's situation is different for the reason they are selling and I've found a few off market deals paid in cash way under fmv and knocked em out the park laughing all the way to the bank cashing nice checks

Patrick Sanders · Answer

You guys who are wholesalers can feel free to add me to your emailing list I have realtors who give me MLS property list so I'm looking for stuff OFF the market or mls. Deal directly with the owner so there is room for everybody to eat. When people find something everybody wants a piece if its known to the public so I still send out letters like a wholesaler too but I don't wholesale I buy and flip. @REGGIE BURNETT I'd say since you say you're experienced in renovations why don't you partner up with somebody on these deals and help them with renovation and pp...make a reputation among a few new investors that you make the process of flipping easier ...just a suggestion

Jamie Parker · Answer

@Reggie Burnett @Matt Leavell @Victor Gootee @Patrick Sanders. Im a wholesaler in nashville. I have come across deals that work for some and not for others. I would say that when scoping a deal what is the intended spread that you look for @15%, 25-30% margins? I would be interested in knowing that information. There are deals to be had but would you say that knowing what you know what profits you want will help you find deals more efficiently?

Matt Leavell · Answer

If you are just starting out, it really comes down to how well you are going to network within the group.  If you are only going to sit and listen then BP should provide you with all of the information that you need.  If you are going to network, then I certainly would say that you should join as you may find some valuable relationships.  But, I also would become active on BP too.  You will get a lot out of BP that way.

Reggie Burnett · Answer

@Matt Leavell Great advice.  I didn't even know that wholesalers had email lists (but it makes sense).  I need to find and get on these mailing lists.  Also I need to get a good resource for issues to look out for when flipping in Nashville.  I leave north of Nashville and am not aware of issues (regulations, etc) in the city.  I've attended some of the REIN meetings but am not a member.  I wonder if I should join?

Reggie Burnett · Answer

Hi Leland.

I don't really know as I'm just getting started.  The obvious answer is as much as possible but I would tend toward a volume biz and make just 10-20% per.

New flipper -- use wholesaler?

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