Listing vs. Wholesaling

[Gary Parker]

In reading various threads in other categories I have read about people that are controlling or buying properties and then listing them on the MLS rather than "wholesaling" the property to a rehabber or some sort of buyer. Rather than interrupt the subject of those threads I thought I would post here and ask how those types of deals could be structured and what the ramifications of structuring a specific way are. For example there are seasoning issues and many properties would not qualify FHA.

[J Scott]

We sometimes (about 10% of the time) buy properties and immediately relist them on the MLS to see if we can resell them for a decent profit prior to rehabbing them ourselves. This is how we do our wholesales. If we can resell them, we rehab them.

This has actually been pretty successful for us, and in every case where our intent was to wholesale, we've been able to do it. And a couple cases where we were really on the fence between wholesale and rehab.

As for the seasoning issues, there's no issues to relist (assuming the purchase wasn't an REO with a deed restriction), and our buyers tend to be investors (cash buyers), so there are no seasoning issues on the back-end either. If we wanted to resell to an FHA or a conventional buyer, there would definitely be issues, as both FHA and conventional will want to see improvements to the property from the previous purchase in order to order a quick resale.