Wholesalers with good Flips in DFW?

10 Replies

We are ready to take the plunge. Any wholesalers with good ARV flips ready?

Lending is ready. Rehab company in place. 

Thanks a bunch!

@Cathy Wells  Congratulations on getting everything in place!  Deals in DFW are almost as hard to come by as a orchid in Siberia, so be ready to move quickly if you find a deal, but don't try to make a deal out of something that isn't!

Originally posted by @Hattie Dizmond :

@Cathy Wells  Congratulations on getting everything in place!  Deals in DFW are almost as hard to come by as a orchid in Siberia, so be ready to move quickly if you find a deal, but don't try to make a deal out of something that isn't!

 I'm actually from Siberia ;) never seen an orchid there

@Hattie Dizmond I am finding this out! My hard money lender will only lend 70%ARV and it's hard to find ANYTHING at that price. Got any suggestions? Are we just going to have to throw in some cash and settle for a smaller return? :)

@Cathy Wells  I'm not saying there are no deals in DFW that hit the golden 70% rule.  I'm saying there aren't very many!  A lot of serious players in DFW are taking deals at 80 - 85% right now.  As long as there is still a profit to be had, you may have to take that road.  It's the old thought process about taking a solid single instead of holding out for the home run.

The other thing to remember is that we still have less than 3-mo inventory for the NTREIS MLS. That includes the rural areas, where things naturally move slower; the high priced properties, which naturally move slower; and, the D-class & war zone properties, where no one wants to live. With the market this low on inventory, even stupid people know they can get more for their properties. Anyone represented by a realtor is almost guaranteed to not take a low-ball offer, because they know they will have 5-more within a week. The properties that can be had at steep discounts are the financially distressed and those in bad enough shape they either can't be listed on the MLS or won't qualify for conventional financing.

Basically, you need to find deal flow off market, which means you're either going to have to market for it yourself or plug in with a good, ethical wholesaler.  I recommend you reach out to Brian Freeman (He's here on BP.) of FourGents.  They are wholesalers on the Tarrant County side of things.  Great guys, great business plan, ethical & transparent.  Tell them I said hello, but - no - I have no affiliation.

@Dmitri L.  That's OK.  I'm sure with their gardens the Japanese have some beautiful ones you can look at!  ;-)

@Hattie Dizmond I am so grateful for your input.  I am a bit confused, in this market, why the hard money lenders haven't adjusted their terms to suit the conditions.  Any thoughts on that?  Thanks a million!  And thank you for the referral!

@Cathy Wells

 I would agree with @Hattie Dizmond . I do some wholesaling and rarely run across a great flip deal in this market (even off-market are hard to come by). The ones I have I can easily sell at 80% to a flipper. I actually got into this business to do rehabs, but I find that flippers are paying so much that I am making about the same profit or more than they are just by wholesaling. Eventually the market will calm down, but for now it seems like it's a feeding frenzy.

@Cathy Wells I'm not sure which of the HML terms you're referring to, but I would guess it's the 65% - 75% max LTV limit on their lending. The basic answer is...they don't have to, particularly for new investors.

HML guys need to know you have skin in the game...significant skin. Yes, they can take the property if you fail to perform, but they are like banks. They are in the money business, not the property business. They don't want your property. They want the interest. They secure with the property, because most of them are investor &/or self-funding, so they have to have recourse to make the investor whole, if you fail to perform. But, they don't want your property. They want your money.

They up their odds of ending up with money and not a property by making it extremely painful for people to walk away from a failed deal. If you build a relationship with an HML lender, establish a track record with them, and create a real bond of trust, you will see the terms shift. But, there is no incentive for them to make loans to a newbie at better rates or terms.