How do i build a relationship with brokers without POF? wholesale

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Brian BurkePro Member
Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
7y

The only way to get in a broker's "inner circle" is to close deals with them.  You can start to build a relationship with them but you'll never be in the inner circle without closing.  They might make you feel like you are, and they'll even give you some off-market deals, but they are really just giving you the deals that they know their real inner circle buyers wouldn't want (the crap deals).

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  • Brian BurkePro Member
    Investor · Santa Rosa, CA · Member since 2012 · 2k+ posts · 7k+ votes
    7y

    The only way to get in a broker's "inner circle" is to close deals with them.  You can start to build a relationship with them but you'll never be in the inner circle without closing.  They might make you feel like you are, and they'll even give you some off-market deals, but they are really just giving you the deals that they know their real inner circle buyers wouldn't want (the crap deals).

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  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    You want to wholesale deals that's broker gives you from their inner circle? Why wouldn't they just sell it off to someone they have worked with in the past, or list it themselves?

    1Reply
  • Jim Growfer
    OP
    Member since 2018 · 92 posts · 10 votes
    7y

    @Brian Pulaski because i'd be able to execute it before it hits the market hence building the relationship 

    1Reply
  • Jim Growfer
    OP
    Member since 2018 · 92 posts · 10 votes
    7y

    or making offers on properties that have been on market for a while @Brian Pulaski

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  • Jim Growfer
    OP
    Member since 2018 · 92 posts · 10 votes
    7y

    @Brian Burke thats fine and understandable. but how do i even start building that relationship without POF?

    0Reply
  • James Mc Ree
    Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 938 votes
    7y

    The brokers have an interest in collecting their commission through listings and sales.  As a wholesaler, you have an interest in cutting out the broker so you can scoop the deal before they get it.  Isn't your idea inherently in conflict with itself?  You can always offer on old listings, but you are of no use to them if you can't close.  Show you can close and you might get on their buyer list.

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  • Jim Growfer
    OP
    Member since 2018 · 92 posts · 10 votes
    7y

    @James Mc Ree

    If the broker has a good deal and im able to bring it to someone that will execute its win win win

    0Reply
  • James Mc Ree
    Rental Property Investor · Malvern, PA · Member since 2016 · 1k+ posts · 938 votes
    7y

    @Jim Growfer You might not be acknowledging the reality. Go with your premise - if the broker has a good deal....what does the broker need you for? The broker puts the good deal in the MLS which shows it to thousands of qualified buyers with no work. Prospects call the broker like crazy because it is a good deal and a sale closes with a qualified buyer who has funds to close. No middleman, easy - happens all the time.

    The broker won't turn down help, but might not be inclined to pay you.  Try calling some brokers and see what they say.

    Maybe you can get your buyers to pay you as a real estate consultant.

    4Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    7y
    Originally posted by @Jim Growfer:

    @Brian Pulaski because i'd be able to execute it before it hits the market hence building the relationship 

    How would a wholesaler be better at executing a deal before it hits the market than a broker who probably had much more contacts? You aren't buying the house right, just passing the deal on to someone on your "buyers list"? How does the broker benefit in this deal at all? I must be missing some important info.

    3Reply
  • Emilio Ramirez
    Contractor · Denver, CO · Member since 2009 · 399 posts · 166 votes
    7y

    I am going to qualify this post by saying that I've never wholesaled anything... that being said. As a wholesaler looking to break into multifamily it seems to me that your efforts would be better spent finding off market deals than trying to convince brokers to send you their off market deals. Or if you have access to buyers, which you seem to be insinuating, maybe you should focus on raising capital and join someone else's syndication. 

    4Reply
  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    7y

    Brokers such as myself just need me attractive deals that we can bring to our clients. There's no frills about it. Be honest and upfront and dont need your greed or the temptation of making a 6 figure wholesale fee kill the deal. Win-win attitude allows everyone to cash their checks!

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  • Brian Jordan
    Columbus, OH · Member since 2015 · 117 posts · 175 votes
    7y

    @Jim Growfer Sorry you've had to endure all of the comments above. BP used to be a much better platform where you good get helpful suggestions for your questions instead of ridiculed for them. There's plenty of companies online that will give you a proof of funds to use. Google proof of funds and look at the images. Not telling you what to do but I will say that I've provided a POF on hundreds of wholesale transactions with realtors and to this day cannot remember a single time that an agent took the time to verify them. Best of luck and let me know if you need anything else.

    5Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Brian Jordan:

    @Jim Growfer Sorry you've had to endure all of the comments above. BP used to be a much better platform where you good get helpful suggestions for your questions instead of ridiculed for them. There's plenty of companies online that will give you a proof of funds to use. Google proof of funds and look at the images. Not telling you what to do but I will say that I've provided a POF on hundreds of wholesale transactions with realtors and to this day cannot remember a single time that an agent took the time to verify them. Best of luck and let me know if you need anything else.

     depends on the asset.. this OP is talking about multi family.. not low value SFRs that most wholesalers deal in.

    Be that as it may.. I dont know why the OP just does not get a license and build a career as a multi family broker.. 

    commissions are quite nice on those.. I brokered a 5 mil dollar deal a few years back and got a 100k commish.. if i can do it so can many others.. just get a listing or just get a buyer.. either one is money in the bank.. Buyers of these want to deal with professionals agents in most instances.. seems like a tough road trying to take the wholesaling gig into MF ..  Maybe in the mid west it works but out our way its a non starter for sure.

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  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Jim Growfer As someone who actually wholesales, I think trying to get deals from agents and brokers is not the best way to be effective. I understand its cheaper/easier to talk with agents/brokers instead of marketing to find sellers but the value that you bring to your investors/ buyers is the fact that you have found and negotiated off market deals that they arent able to get.

    If an agent has a deal it's in their best interest to list it on the MLS and sell it for the highest price possible. There is not really much of a benefit from them working with a wholesaler that doesnt have the funds to close on a deal. Any deals that they do bring you are going to be the ones they know they cant sell, which means you probably wont be able to sell it either which will result in you having to back out of a contract. Also you run the risk of being labelled as a BS wholesaler if you are trying to wholesale properties off the MLS.

    I would suggest that you start marketing and finding your own off market deals for your buyers.

    10Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Lydia R.:

    @Jim Growfer As someone who actually wholesales, I think trying to get deals from agents and brokers is not the best way to be effective. I understand its cheaper/easier to talk with agents/brokers instead of marketing to find sellers but the value that you bring to your investors/ buyers is the fact that you have found and negotiated off market deals that they arent able to get.

    If an agent has a deal it's in their best interest to list it on the MLS and sell it for the highest price possible. There is not really much of a benefit from them working with a wholesaler that doesnt have the funds to close on a deal. Any deals that they do bring you are going to be the ones they know they cant sell, which means you probably wont be able to sell it either which will result in you having to back out of a contract. Also you run the risk of being labelled as a BS wholesaler if you are trying to wholesale properties off the MLS.

    I would suggest that you start marketing and finding your own off market deals for your buyers.

    what about net worth realty and the other big one there in Dallas it appears they wholesale off the MLS all the time.. how do they do it.. not that i would do business with them.. but just curious.

    MF sellers by and large are not going to be your one off SFR unsophisticated sellers.. they usually had some success in their life to end up owning a multi million dollar property.. not that there are not some out there that maybe inherited it etc.. In my experience around the commercial brokers these guys hold that inventory they know every deal out there who owns them and usually has their cell numbers etc.

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  • Jorjio Hopkins
    Rental Property Investor · Milwaukee, WI · Member since 2017 · 77 posts · 86 votes
    7y

    @Jim Growfer I completely agree with all of @Emilio Ramirez's post.  

    Broker relationships are beneficial long-term, but like @Brian Burke said, you likely won't get into their inner circle until you start closing deals.

    If I were in your shoes, I would start by first educating myself and getting very good with multifamily terminology.  Then I would call a few brokers and set up a time to take them out to lunch and or coffee to begin building a personal relationship with them.  Do this several times with a few key brokers and over time you will develop a better relationship.  

    I encourage you to think about the long game, not how can you do this fast to make a quick buck.  Think how can I build relationships (add value to others) now that will benefit me in 3-5 years from now, and be genuine and authentic in your approach.

    1Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Jay Hinrichs Dont get me started on Networth and New Western. They are all licensed agents, and I have heard investors say that they wholesale deals off the MLS. I have never worked with them, but I have spoken with a lot of investors that have and the general consensus is that they engage in some pretty shady behavior. Like I said, Ive never worked with them so its all hearsay...but I cant imagine everyone is telling the same "lie"

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Lydia R.:

    @Jay Hinrichs Dont get me started on Networth and New Western. They are all licensed agents, and I have heard investors say that they wholesale deals off the MLS. I have never worked with them, but I have spoken with a lot of investors that have and the general consensus is that they engage in some pretty shady behavior. Like I said, Ive never worked with them so its all hearsay...but I cant imagine everyone is telling the same "lie"

    I just find it strange that a company can go into contract on a MLS property then mark it up and sell it.. seems to me the buyers are not to swift in this scenario.. if these are on MLS.. make a back up offer and wait.. :) it only works because of the herd mentality I guess

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    7y

    There is nothing wrong with wholesaling off the MLS as long as you are prepared to close. Those using BS escape clauses are the norm. They are highly promoted on BP. Even the unlicensed broker cheerleaders mention "having to back out of a contract". What good is THAT kind of "buyer"?

    4Reply
  • Todd Dexheimer
    Rental Property Investor · St. Paul, MN · Member since 2016 · 3k+ posts · 3k+ votes
    7y

    If you are talking about multi-family, then you will not need to show proof of funds (at least I never have). You need to be educated on MF investing so you can communicate well with them. As for trying to snag their deals and then wholesale them to other investors, that is a great way to burn relationships with those who feed you deals. 

    As for how to build relationships, click on this article: https://www.biggerpockets.com/blogs/10145/70795-ho...

    Instead of trying to wholesale their deals, find others with aligned interests and form partnerships in order to purchase the deals. This will only strengthen your relationships and allow you to get better deals. 

    0Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Jay Hinrichs Most of the buyers that these big wholesale companies work with are new investors that dont have access to the MLS so they cannot run their own comps. They completely rely on the information provided by the person selling them the "investment" so its the land of inflated ARVs and minimized repair costs.

    Also, some of these big companies also offer hard money to their buyers. I have seen some wholesale deals that are marketed saying that investor cannot purchase unless they use that company’s hard money.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Lydia R.:

    @Jay Hinrichs Most of the buyers that these big wholesale companies work with are new investors that dont have access to the MLS so they cannot run their own comps. They completely rely on the information provided by the person selling them the "investment" so its the land of inflated ARVs and minimized repair costs.

    Also, some of these big companies also offer hard money to their buyers. I have seen some wholesale deals that are marketed saying that investor cannot purchase unless they use that company’s hard money.

    ya well MLS is open to the public.. just pop the address in comes up on Redfin or Zillow.. make back up offer and wait it out.

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  • Javier D.
    Investor · FL · Member since 2017 · 266 posts · 220 votes
    7y

    @Jim Growfer

    Putting a contract and closing on the deal. Once you make them money you’ll probably be in..

    this is a very broad question. What got you to ask it.

    0Reply
  • Account Closed
    Rental Property Investor · Oakland, CA · Member since 2014 · 730 posts · 1k+ votes
    7y

    @Brian Jordan so basically, you’re telling the OP to commit fraud. Great advice!

    5Reply
  • Earl Hatmaker
    Specialist · Dayton, OH · Member since 2018 · 59 posts · 41 votes
    7y

    @Javier D. I saw another question this guy asked the other day. Another hypothetical situation. Almost everyone was telling him to not do the deal, argued about every detail as he would be out little if the deal fell through. It was a terrible deal.

    Maybe he’s just asking questions to try and get started but instead of picking a focus he is shooting fish in a barrel.

    1Reply
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