Wholesaling to hedge funds*

[Israel Wolterding]

Good evening BP family how do you go about contacting these hedge funds directly once you have the company name ? Will skip tracing them give you the necessary contact information ?

[David Dey]

So between 2012-14 we averaged selling around 360 properties a year to hedge funds.  Honestly it was what brought us back after the crash.  

(Yes we were sucking wind from 2008-11)

Honestly, we learned about them by accident.

I was visiting a “whale,” in the central Florida market who bought at the steps and beat all bids, even if they were too high to maintain control of the steps.

That day, while I was at his office, he lost 3 bids in a row.

He started swearing up and down, and I had to know how he kept losing.  “It’s these @$&# funds that are buying up everything!!”

I had to find out what this was all about.

I went into public records and found the properties that had been purchased and then started digging and saw many other funds buying.

(Hint: if you see a buying company with Roman numerals as part of the name, it is most likely a fund.)

There were 5 or 6 big groups, and dozens of small to middle sized groups trying to swim with the sharks.  

I reached out first to the big ones, they were by far the toughest to deal with, but I learned a secret that usually gave me the in.  You should ask for the regional person for the area where you are wholesaling.  

The funds hire people, often realtors or property managers or whomever to be the person who controls the county where they are investing.  This is who you actually need to get in touch with.  They are the ones who really make the final decision.

Another tip is to pull up the properties they have bought in public records then look them up on Zillow or various marketing sites for rentals.  They will be offered by the contracted property managers.  

If you can reach the manager, they will be in contact with the local contact or may be the contact themselves.

So in the end, while we sold some to the big guys, we actually found our sweet spot with the smaller to midsized funds.  Those who couldn’t keep up with the Blackstone’s and the American Homes for Rent, etc, so while the big guys had rigid guidelines to go by, the small to mediums had to broaden their criteria.

To the smaller guys, we actually created a sales letter presenting ourselves as a boutique wholesaling group that would take their criteria and them off market properties that met their requirements.

While we got multiple funds that we ended doing business with, we found one group in particular that jumped on our offer.

Of the 360+/- deals we did annually, We ended up doing over 300 to the one fund who began putting in monthly orders each time a train h of funds came in.

While we didn’t make huge spreads, we made up for that in volume.

If you would like to see our sales letter, feel free to message me.