Wholesalers in South Bay California?

3 Replies

Hi everyone

I was just wondering if there are any wholesalers based out of southern california. If there are, I would love to hear about your experiences, deals made, opinion on the market, any pros and cons you have identified, successful strategies, and anything else you would like to share. I would also love to hear any sub 2 deal stories as I am currently trying to completely understand this topic. I have very limited funds and it seems like a lot of people are recommending the sub 2 strategy.

HI Spencer, I'm also in South Bay but not a wholesaler. We're currently investing in single family rentals, and looking to invest out of state in fix-and-hold and/or fix-and-flip. Welcome to Bigger Pockets! Best of luck on your endeavors!

Hi Spencer, so good to hear you're a wholesaler, could you please put me on your buyer's list? I'm a fix and flipper.

To answer your question above, I'm not a wholesaler, but I do occasionally wholesale deals when I get more inventory than I can handle since my business is really small at this time. And to further add to the disclaimer, I tend to work in nicer neighborhoods, so my perspective is skewed as far as subject 2 strategy.

So anyway, back to your question, I generally find it hard to do subject 2 wholesale deals in Orange county. I've tried, but I generally find it hard for the properties I work with because

1. There is a high high demand for properties in the areas I work in (coastal orange county), so there is generally very little incentive for an owner to option their property.

2. The property prices around here tend to be so so high, that even if they optioned the property off, there wouldn't be enough cash flow for them to be able to purchase or rent another property as most people who are in a situation where they need to option their property, aren't making enough for the bank to make a second loan in the $500K+ range. Also often it is hard for the buyer to afford the option if the property price is too high.

I can imagine in parts of the country where house are below $200K, it would be much easier to get a second mortgage allowing the owner to option the first one off. I really think coastal cities require a somewhat different strategy.

For example, I recently came across one seller who was open to optioning their house, owed $1.2m and value at $900K, and just wanted to get out of the monthly payments, but did not want to short sell as they didn't want to take the hit on the credit. Unfortunately, as much as I would have done the deal, with a monthly payment of $6K+, there really isn't many people who could afford the option or wanted to, not to mention the loan was about to come due, so the buyer would have a limited time to excercise the option.

For my market, I've generally found it easier to build a list of ready buyers, then call or email them when I have something under contract. Of course you'll need money for the EMD, so that would be something you need to solve.

However, as far as Socal goes, i don't think all is lost, I think there might be potential to do options in places like Long Beach and LA city where there does seem to be a greater abundance of lower priced properties.

Just some thoughts from my limited experience.

Thank you Leah!

CK Hwang Thanks for the great information. I now understand that homeowners would agree to a sub 2 because they can't afford their monthly payments or just want out of the house. I never considered what it would be like to use sub 2 with higher priced properties. Thanks for the clarification, I'm slowly starting to understand this more bit by bit. As for my buyer's list, I haven't began to wholesale and am still a begginner so I don't currently have a buyer's list. But I definately plan to begin wholesaling once I'm familiar with the whole process, so I will send you a message when I begin marekting for my first deal. Also, what kind of properties would you be interested in? If I had details on what you would be interested in I could keep an eye out for those kinds of deals. I have to say these past two weeks reading forum posts here in BP has really taught me a LOT.

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