Why am I, as a Landlord, receiving wholesaler letters?

20 Replies

Hello,

I have a rental property, thanks to Bigger Pockets and its members, and it currently rented out. Lately, I've been receiving letters from wholesalers at my primary residence that they'll buy my house for cash. I know the front yard is messed up as its winters and I had a lot of weed issue this year (which looked like grass in summer) and it's all yellow now. I know my lawn needs reseeding for sure. But is this the only reason?

I plan on fixing the yard in spring/summer but can that be the reason when who lasers are driving for dollars they're look at my property as a distressed one? My tenants are communicating with me in general and I'd like to discuss the lawn care as it's clearly written in the lease and I'm not sure what my next step should be. Do i threaten them or take any action on this issue? The wife is always working, the boyfriend who is also on the lease never responds my call/voicemail. The property is in good shape from the inside, they rarely call me for anything and they always pay on time. I'm thinking when and if they sign next lease, I'm going to bump up the rent slightly and I'm going to get the grass cut from a company. My yard really does look horrible right now :(

Thank you.

You are getting the letters because there is a list of  non owner occupied properties . I have 7 units in Pasadena and I get 5 to 15 letters a week .

Yep you just made the list of non owner occupants. The wholesalers buy this list and send out cards and letters to people on that list. I sometimes get several letters from the same wholesaler for different properties.

I sometimes call them and say I am not interested in selling but please add me to their cash buyers list as I am always looking for more houses to buy.

@Lakshay G. this is just a side effect of the business as you say. Big wholesalers send out thousands of letters a month. I even get them from people I know well. That shows they are not targeting specific people like you and me. We just happen to fit the mass criteria they use.

I am so curious: why would anyone sell a house to a wholesaler when they can get so much more on the open market?

@Mary M. Many reasons, here are two big ones: They are in a time crunch and need their cash asap. They house needs a lot of repair before passing inspection.

I've received letters and postcards for properties I own and do not occupy, I've received others for my primary residence, and someday I'm pretty sure I'll get a letter asking me to sell them someone else's house.

The main thing to remember is that while it's questionable how many of these letters actually work, the activity of the wholesalers raises awareness in owners that their properties are in demand. This emboldens sellers to push prices up a few thousand when they actually do sell their homes, and that in turn raises overall property values. The wholesalers' activities can't help but benefit those buying and holding, like me.

When you get those letters, it means prices are going up, up, up in your area and you can usually make a good guess how much they're going up by how many letters you're getting.

@Lakshay G. Yup, you're a non owner occupant prospect now! That means you might be a seller and you might be a buyer! I occasionally prospect landlords, too -- it never hurts to call a for rent sign and see if they've considered selling, especially when appreciation has raised values so much!
@Mary M. It might not pass inspections, and might only qualify for a cash sale, or they might not want the hassle of an on-market sale with all the owner-occupant or newbie investors walking through and disturbing tenants. Not everyone wants the most money possible, some people need it sold in the fastest time, or with the least hassle -- we've got to ask questions and learn the real motivation. I've had hoarder houses that have requested off-market sales -- I have them sign a document that states I've told them that on-market has a better chance of a higher priced, faster sale.

As others have stated, it has nothing to do with the exterior condition/lawn of your property.  It's just that it's a non-owner occupied property and wholesalers can buy lists of those.

Assuming you aren't desperate and open to selling the property for a ridiculously low price, throw the letters/postcards in the trash like you do with any other piece of unsolicited junk mail.

Originally posted by @Lakshay G. :

Thank you for replying. Have you found a solution for this or is this a “side effect” of this business?

 Lol. It's just junk mail. Throw it away. Solution found.

I used to get annoyed and thought about it as mentioned above, there must be a demand or they would not be canvassing the neighborhood and doing mailings. I have contacted a few and requested to be removed but I suspect it just cycles back again when they get a refreshed list with my name still on it. :-) 

I recently got a call from someone and I know I should not have answered the phone when I just woke up but I thought, hey it might be an emergency. Once I had my whits about me I realized what it was and politely declined and asked to not be contacted again.

one reason is that burnt out landlords are one of the top targets of wholesalers..  its were a majority of the inventory comes from.. burnt out landlord realizing that being a landlord is not for them.. there house needs work because of tenant damage they don't want to YET again rehab or do another turnover and they just decide to sell the sucker.

Originally posted by @Lakshay G. :

Thank you for replying. Have you found a solution for this or is this a “side effect” of this business?

When you say solution, it implies this is a problem. I don't see how this is a problem. I keep copies of all the yellow letters I get for three reasons:

1. People who are buying are also selling, so connect with them to see if they have deals.

2. If I need to sell a place in a hurry, it is good to have some contacts.

3. It is good to have examples of marketing materials for my own future efforts.

I wish I got more mailers. I could see what others are doing in my market and improve my own marketing.

I keep them as samples for my own campaign one day.

You could also use them as kindling.