Wholesaler Advice?

Question

I was listening to a pod cast and the gentleman was talking about making offers on mls listings and turning around then selling them to investors.  My question is if you are trying to wholesale do and make an offer can you assign the contact or do you have to close on the property then resell it to the investor.  Do agents in the industry frown upon this or are they general ok with it?  Thank you for all the help and any advise!

Jim Sakalis · Answer

James,

I am not sure where this gentleman had any success in doing this method of purchasing for at least a couple of reasons;

1) Any smart investor is not going to buy a listed property for simple fact there are real estate commissions attached to the transaction. ( 3-6% )

2) A lot of agents would probably frown on that type of purchase because it is not done in the traditional sense.

Now here would be one exception to the rule; If the MLS listing was a foreclosed or HUD property that was listed at a wholesale price in the first place.

I would try and gather more information from this pod cast guy and find out a little more details on some of those unknowns.

Good luck, and hope you are on to something this could get interesting

Jim Sakalis

Jim Sakalis · Answer

James,

The short answer is yes. I have over 23 years experience with HUD and foreclosure property.

I hope that information helps.

Jim Sakalis

James A. · Answer

@Jim Sakalis Thank you for the reply.  You are actually right they were making a lot of offers on Hud and foreclosed properties.  I guess i was thinking if he had to buy them then pay the closing costs how was he able to be that profitable.  But he did mention that for him it was a volume game.  Do you have much experience with HUD or foreclosure?

James A. · Answer

@Ned Carey You are right sometimes you gotta get out of your own head.  Thank you!  I know i am asking a lot of questions.  I have a deal i am trying to wholesale.  Would you be able to advise me or is that against the rules.  It is in highlandtown and i went and saw the property. the owner is an investor but he bought a commercial piece and just wants the cash from this property.  He was leasing it out and they stopped paying and he had to have the tenants evicted.  My question is do i tell him i want to wholesale it or do i just try and get under contract then wholesale it?

Ned Carey · Answer

@James A. the market is not perfect. Every investor does not see every deal. Also investors will evaluate deal differently.

If you start with the premise that it can't be a good deal, because otherwise someone else would have already bought it, you will never get a good deal.

James A. · Answer

Ned thank you for the reply!  I kind of figured.   I know you are active in Batlimore and we are currently looking for another flip.  Some properties seem to be a good deal but i am always concerned why no other investor has picked it up.  From you experience do you think there is more opportunity than investors to capitalize or do you think ones like that they are passing up for a reason?  Thank you for the advise.

Ned Carey · Answer

Most contract agents use have a prohibition against assigning the contract.  Yes you can wholesale listed properties but there is already a lot of competition for them and it is hard to find deals good enough to wholesale. There are also often restrictions on assignments, length of time before resale etc.

Wholesaling is not easy, Wholesaling listed properties is even harder.

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