Im just getting started with wholesaling and as of lately I've been working on building a cash buyer list. But I was wondering, as a beginner, do you think it is a good idea to get started wholesaling pre-foreclosures? Are there , if any, disadvantages to wholesaling preforeclosures?
Welcome to BP Lex.
Yes, there are some serious issues with a newbie trying to wholesale pre-foreclosures, like federal laws about contacting one who has received a notice of foreclosure.
It's been beaten to death here, suggest you use the search box, use your title, it should pull up pages of posts of the pitfalls. :)
Wow OK, thanks for the reply!
The issue here is that many investors, wholesalers and others have approached owners in foreclosure under the guise of helping them financially, only to take advantage of them and get their house pennies on the dollar. The laws have been enacted to protect homeowners.
Additionally, wholesaling foreclosure properties are very difficult. You only have a limited amount of time to complete the transaction until the property goes up for auction. Every day additional fees, interest and penalties are added on making finding an end buyer more of a challenge. You also will have trouble doing a double-close or a contract assignment when a bank is involved. Plus, short sales can take up to 6 months and most investors do not want to wait that long.
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