Has anyone had success wholesaling on-market properties

Question

What formula are you using to make offers on listed properties? The 70% of ARV - Repairs and fee make your offer come in too low and most realtors will not entertain the conversation of a super low ball offer thats coming way under list price. Ive been watching some videos and noticing some people say that they have a lot of success with this strategy but i was curious of what formula is being used to win offers and profit from a wholesale fee. Love to hear the feed back on this topic.

Robb Krautbauer · Answer

Most investors don't care where a deal comes from – on-market or off-market. A deal is a deal.

Chris Seveney · Answer

@Nayron Henderson

As an investor when I see someone wholesaling on market deals they lose all credibility in my book.

Juan V Lopez · Answer

Hey Nayron, you can absolutely wholesale deals off of the MLS. You'll probably catch a lot of flack from some people for doing this, but it comes with the territory.

Many investors don't care where a deal comes from – on-market or off-market. A deal is a deal. If you're savvy enough to identify an on-market deal at 70% or less of ARV and can lock it up (while disclosing your intentions to the selling agent), then by all means do it. You're helping a homeowner sell their house, helping an agent sell a deal and getting a deal to an investor. Everyone wins.

There are a lot of purists who will say wholesalers should only do off-market deals. That's fine. These are not people you will be selling to anyway.

As long as you disclose what you are doing to each piece of the pie and work with integrity, then it's fair game.

Daniel Paloscio · Answer

@Nayron Henderson

You can definitely wholesale properties on the MLS and I personally think this market creates a unique opportunity to do so. I read an article last week on Redfin that highlighted the fact that 16.1% of homes fell out of contract in July this year, 63,000 homes! That's an alarming number of homes falling out of contract and sellers are really feeling the market changes now. Homes are sitting around longer and buyers are realizing that they have options.

My suggestion would be to set an alert to receive notifications when properties go BOM (Back on Market). From there, you will need to take more of a shotgun approach. Throw out tons of offers. Be embarrassed at how low your offers are. Send out 50 to get 1 accepted. Eventually you will come in contact with a seller that is over-correcting. You are looking for the seller that has motivation to sell quickly and dealing with the stress of falling out of contract. Your quick, clean, cash offer can be just what they need, and they are willing to trade equity for it.

Taking all of this into consideration, you will need to make sure you are getting an exceptional deal. I would shoot for 65% of ARV or less. Investors don't like seeing deals from wholesalers on the MLS. The one exception would be when the numbers are really good. Also keep in mind that investors are also aware of the current market conditions, so they will be more conservative with their numbers and want to buy better deals. The days of 80-85% of ARV deals are gone, or at least on pause for now.

Good luck out there!

Jay Hinrichs · Answer

6th this advice your reading on the internet is at least a decade old its OLD NEWS and has not been remotely relevant for the last 7 years or so. its only relevant to the guru's who suck you in to spending money and rehashing strategies that are not viable in todays investing environment .. now this could change if economy teeters and falls.. But for now its simply a waste of time and realtors who have the listings know this.

Nayron Henderson · Answer

Thanks alot Daniel! This information is very useful and i plan on taking action. I appreciate all the responses I consider them to be constructive criticism opposed to thinking that someone is knocking my potential strategy. I was just trying to wrap my head around what investors buy on-market deals and what formula is recommended to lock a contract that there will be no issues to sell my equitable rights in the subject property.

Thanks again Daniel!

Don Konipol · Answer

The “you can wholesale anything” crazies are apparently out in full force, defying economics, denying historical evidence, ignoring voices of experience, and blindly believing salespeople pushing their products through YouTube videos.

If someone has engaged a Realtor to sell their home; the Realtor has placed the home sale on MLS, where EVERY buyer, both owner occupant and investor, and EVERY broker representing said buyer, has access to the details of the proposed sale.  Yet the wannabe wholesaler, spotting the same home, offers 30% less than market value, LESS estimated cost of repairs, and somehow the seller is going to accept this 50% below asking price offer?

Or maybe the seller has already priced the property at 30% under market value, and instead of the bidding war that we all know would occur, EVERY broker, buyer, investor and potential homeowner has somehow missed it, but the newbie wholesaler, with ZERO experience, but possessing the knowledge obtained in a “teaser” YouTube video, and perhaps attending a weekend seminar, put on by a marketing professional who NEVER personally wholesale a single property, is able to identify, tie up with no investment, and successfully sell this property.

As a side note it would be interesting to know the percentage of wholesaler wannabes who bought this nonsense that previously failed at multi level/network/pyramid marketing?

Nayron Henderson · Answer

Thanks for the feedback Larry! Im going to be doing some more investigation on this matter, only because there is hard evidence that proves this strategy does work.

Has anyone had success wholesaling on-market properties

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