I have also had success in wholesaling although I would highly recommend just becoming an agent who specializes in locating properties and negotiating them for cash buyers.
It is important to remember that a wholesaler traditionally sells their promise to purchase to another person...this means that you have entered into a contract to purchase a property. If you have no intention or chance of ever purchasing that property than you are entering into that contract in bad faith.
The solution to this is to have hard money lenders willing to lend you the money or partner up with you so that you can buy it if you cannot sell the promise to purchase.
This means that you need to:
1. Know how to evaluate the After Renovation Value.
2. Estimate the renovation figures accurately
3. Network to find reliably people who know real estate and are comfortable investing in high risk deals such as the ones you are going to be bringing them.
4. Make sure that the price that you are offering is a guaranteed deal if it is accepted by the seller, there can be no doubt in anybody's mind about this...otherwise you are exposing yourself to a lot of risk on a lot of different fronts.
I would also advise complete transparency with the seller.
It's possible to do wholesaling in Canada - Personally that hasn't been my strategy, but it's definitely an interesting topic, because we seem to not believe it's possible here.
Would love for people to provide examples of how they've done wholesales in Canada.
If you search the forums, you will see several threads asking the same question.
Yes, it is possible to wholesale in Canada, but it won't be as easy as in the U.S.A. for several reasons. Outside of a few of the larger metropolitans, it is doubtful whether you could make a business based solely on wholesaling.
This is what I am planning to do here in Alberta, I Just attended a Rich Dad seminar where they suggested that this is the best way to start in REI, however this is the same question that I have. It seems that there could be a market here for this as the economy seems to be on the upswing. Im curious to see if you've done anymore research on this strategy and if you may have any tips for me? Thanks!
Don't have too much experience with wholesaling but would be interested to learn more as well!
I mostly focus on acquiring rental properties at the moment. It does seem like it should be possible, I am looking to test direct mailing in the future.
Has anyone had any luck with foreclosures? I know in the US it's much easier to acquire a foreclosure and a lot less hassle and I know the banks in Canada don't let them go for nothing.
Has anyone had any luck with foreclosures? I know in the US it's much easier to acquire a foreclosure and a lot less hassle and I know the banks in Canada don't let them go for nothing.
Dan:
If you do a little search of the forums, you will find discussions/explanations of foreclosure and Power of Sale {half the jurisdictions in Canada do not use judicial foreclosure}. Lenders - particularly in the case of Power of Sale - have an obligation to divest the property at FMV
my research on wholesaling in Canada has not been too positive. You could but it seems limited.
There are several ways to invest in real estate so i am looking at those.
But indeed wholesaling is often recommended as a way to start. or you could try as well bird-dogging.
@Account Closed
with foreclosure in Canada, you will not have the kind of deep discount that they get in the USA. depending on the province the way the property is sold could be through a bid process in court, which at the end just inflate the price
Sarah Larbi thanks for the mention. I haven’t been very active on BP lately.
I just closed on my four wholesales in the past month. It’s definitely possible to do here. My wholesale fees have varied for $7,000 to $70,000.
The biggest difficulty is getting the properties at enough of a discount to warrant a wholesale fee.
I have also had success in wholesaling although I would highly recommend just becoming an agent who specializes in locating properties and negotiating them for cash buyers.
It is important to remember that a wholesaler traditionally sells their promise to purchase to another person...this means that you have entered into a contract to purchase a property. If you have no intention or chance of ever purchasing that property than you are entering into that contract in bad faith.
The solution to this is to have hard money lenders willing to lend you the money or partner up with you so that you can buy it if you cannot sell the promise to purchase.
This means that you need to:
1. Know how to evaluate the After Renovation Value.
2. Estimate the renovation figures accurately
3. Network to find reliably people who know real estate and are comfortable investing in high risk deals such as the ones you are going to be bringing them.
4. Make sure that the price that you are offering is a guaranteed deal if it is accepted by the seller, there can be no doubt in anybody's mind about this...otherwise you are exposing yourself to a lot of risk on a lot of different fronts.
I would also advise complete transparency with the seller.
Do you known a person must be licenced to wholesale in Canada?
Cody, I don't believe you need to be licensed to wholesale in Canada. In fact, I think being licensed could hinder you. If you are licensed, all of your marketing needs to include that you are a licensed agent. This can definitely turn off sellers. However, if you don't have access to an agent who can pull comps for you, you either need to make that connection, or get your license. I usually buy my wholesales firm at a price where I know I can sell it to my list, and if I can't, I can flip it myself.
Very late to this.... just don't wholesale. I was talking to this guy that is paying so so much money to learn the "art of wholesale" $500 for 2 hours LOL. I'm not saying it's impossible, but I'm a real estate agent and wholesaling is alien to me. Why would someone give you a property for so cheap that you can make money of flipping the contract? It just doesn't make sense. An agent will sell your house in 20 seconds for more than what you'll get from a wholesaler. There's ads all over kijiji but these guys aren't the contract flippers, they buy cash and sell later I assume. Contract flipping just seems.... retarded when you can make money with less time.
Not trying to diss wholesale professionals. More of a just find another way because a lot of idiots think it's easy. The guy I was talking about went to American seminars and read American books. If it is easy, teach me :)
@Account Closed Well, you're right that no one needs to pay $250/hour to be told to buy properties for less than you can sell them for. That's all wholesaling is, in a nutshell.
Wholesaling is like most of things. It's easy to get into, but hard to master.
And to answer your question of why someone would give you their property cheap when they could list it. Here are a few:
* They don't want to. * They don't have time. * They don't have equity. * They don't want dozens of people walking through the place. * They don't want to negotiate. * They don't want to do repairs. * They can't afford to do repairs. * They've already tried and their agent couldn't produce a buyer. * They just want to unload the property. * They don't want to pay a commission.
Now, with that said. 99% of sellers make up the retail market. They're the folks agents work with. They want to sell their house but they have no pressing need to do so, so they can afford to fix it up, get it ready for showing, wait for the right buyer, and negotiate for the most money.
But there is that 1% of sellers out there who make up the wholesale market. They NEED to get rid of their property RIGHT NOW and they don't care if they make anything. In fact, most of them just want to hand the keys to someone and walk away.
And let me assure you. There is a lot of money to be made in the wholesale market. That's why investors and wholesalers exist.
Thanks for your response. I sounded pretty ignorant about the whole thing. I was just going off what I thought and not facts. I'm glad you agree that $250/hr is a bad idea tho lol. Thanks for the info! Do you focus on wholesale?
@Account Closed From my understanding the average price for a real estate coach (who serves agents) is around $500/month. So $250/hour seems a bit much.
I focus on wholesale terms. I still deal with motivated sellers, but instead of looking for low prices, I look for low down and low monthly payments.
A typical deal for me would be a lease option that looks like:
Generally the seller gets the same price they would have netted with an agent, plus mortgage reduction, plus cash flow, and I pay for minor maintenance, management and closing costs.
If it's listed with an agent, I'll pay the commission for them too.
@Doug Pretorius thanks for the breakdown, I'm trying to learn more about LO. So your cost is 1800 monthly, what are you then leading it out at and the how much down?
It sure is possible to do wholesaling in Canada. I've been wholesaling in the Toronto area since 2008. You need to do lots of advertising and treat it like a business. Once you do some wholesaling then you'll probably want to add some other strategies to your arsenal... fix and flip, long term rentals, etc.
Wholesaling can definitely be done in Canada, and it can be very profitable. Like @Aaron Moore said, it needs to be treated like a business. Advertising to find the motivated sellers is key to getting the properties at a low enough discount price.
Hey, I'm about to start wholesaling in Canada but i'm struggling to find the Contract Assignment and Double Closing templets. Do you happen to have one or do you know where i can find them? Spent hours searching for them but still no luck! Please help me if you can!