So I just started a wholesaling company in Pittsburgh. I launched my first campaign this month and have been getting pretty good responses back from people. Very confident that i will get my first deal this coming April. However I am running into this "problem" that i didn't think about.
I keep finding these pretty much turn key or close to off market properties. I have no money to buy them myself or i would because they are good deals. As a wholesaler i don't know how to make any money off of these and don't want to be like ok seller good luck and leave all this potential money on the table.
Structure part of your compensation to be in the form of partial ownership. Talk to an attorney about the details.
There is a market for close to turnkey RE investments. I'd be happy to look at some of those deals to invest in.
One of the keys to wholesaling (IMO) is that if You aren’t buying it yourself, your seller knows this. Sometimes this can be as straightforward as explaining the business model of wholesaling and sometimes it can just be as vague as saying “my partners and I.”
From the sounds of it you don't have a buyers list you are confident in. Work local RE meetups to meet buyers and find out what they want and then target those homes. You now have a legit buyer you know and can assign a contract to for them to close. You get an assignment fee. Do enough of these and keep the money in the business and now you can be the actual buyer. I have seen assignment fees from $500 to $55,000 in the Pittsburgh area market. If you have a real deal then you usually only need about 20% of the ARV in liquid funds using hard money. (Not that I recommend doing a flip if that is all you have in Capital).
Have you considered creating a partnership with a real estate agent to get these deals to the closing table? I know a few wholesalers that will send a lead for a property to an agent for them to either list for sale or sell to their portfolio of investors and the person who provided the lead gets a "referral fee" at the closing table. Sometimes it's only $500 or so but if all you're doing is passing along some information, it's a good deal for properties that you can't make work.
Let me know if you have questions!
Best of luck!
Check state laws on referral fees. Some states do not allow them to be paid unless you are a licensed RE agent or broker.