Wholesaling MLS listed properties

15 Replies

Hello,

I am new to REI and have a few questions dealing with wholesaling. I would like to hear anyone's experiences in wholesaling properties that are listed on the MLS. How has it gone with this? Do you deal with the seller or the sellers Realtor and how welcoming are the Realtors to these types of deals. I will be operating out of Chicago so if anyone from Chicago would like to share some experiences and or tips I would greatly appreciate it.

Thanks! 

Hi @Alexander Chavez  

I have one going on now that the seller put in a clause with the realtor saying if she sells it on her own, their contract is void.  So I am dealing with a owner.  I haven't done one without that factor.  Hope this helps.

I'm not a wholesaler myself, so feel free to ignore this, but from a conceptual angle, wholesaling MLS properties seems like an extremely tough proposition to me. There are a couple of BP podcasts where people talk about doing it successfully, but I think you have to really know what you are doing to pull it off. You'll somehow have to succeed in talking the seller/agent into a VERY large discount in order to create room for your own cut in the deal. Since the property is out there for everyone to see, you'll basically compete with your own customers.

Again, apparently, it can be done, but I would probably focus on wholesaling unlisted properties if I were in that line of work.

@Mike York  

 Thanks for the response. How did you go about finding that specific seller and contacting her? Also, do you know how she knew to put that clause in the contract?

Had a funny phone call on this yesterday. I have a low end, dumpy house listed as the owner is a "little old lady" who got duped by a sub2/take over your mortgage scammer. It's a short sale. Anyway, I get a call yesterday from a woman, then her partner about an hour later. "We are cash buyers, want to send over a contract, POF, and use you so you can have both sides of the commission". I thought I recognized the voice. Said "Eddie"? He said, yes. Eddie runs a investor group in an adjacent county, and had me come do a Q & A on short sales a few weeks ago. In this session, I let would be short sale wholesalers know I, or any other awake agent, wouldn't let them tie up a short sale in order to try and flip it--as it'd be off the market for 90-120 days trying to get approval, then likely not to close because they couldn't flip it. When Eddie recognized who I was, he said "oh, I guess you're not going to let me put it under contract, huh?" Nope. Eddie is a sharp guy, and makes good money wholesaling, he just won't be trying on my short sale.

I actually stumbled across her after she had already made the contract.  She was trying to sell it by herself and it wasn't selling so she got a realtor involved.  She thought she would increase her chances of selling it if she could do both.  She's a smart cookie.....

@Alexander Chavez I will check the MLS as soon as you send over a possible deal, unless your offer is way below the MLS price then I will ask to be removed from your list. I suggest you read this thread from a few weeks ago

http://www.biggerpockets.com/forums/93/topics/1383...

Brie Schmidt, Real Estate Agent in Illinois (#471.018287) and Wisconsin (#57846-90)

@Brie Schmidt Thank you for the thread link! So would you recommend not evening attempting to Wholesale ANYTHING listed on the MLS even if you can offer (to the end buyer)a lower price than what is listed on the MLS? Would this in general look bad or create a bad rep of the wholesaler to his possible investors/buyers?

@Alexander Chavez - Depends - if you can get it under contract for 70% of list and sell to the end buyer at 80% of list then it would still be a good deal to the investor. Most investors I know are licensed and have MLS access so usually we have already seen it

Brie Schmidt, Real Estate Agent in Illinois (#471.018287) and Wisconsin (#57846-90)

@Brie Schmidt Thanks for the information I greatly appreciate it. I will stay away from MLS properties unless I know I can get it much lower than the listed price.

Originally posted by @Andrew S. :

I'm not a wholesaler myself, so feel free to ignore this, but from a conceptual angle, wholesaling MLS properties seems like an extremely tough proposition to me. There are a couple of BP podcasts where people talk about doing it successfully, but I think you have to really know what you are doing to pull it off. You'll somehow have to succeed in talking the seller/agent into a VERY large discount in order to create room for your own cut in the deal. Since the property is out there for everyone to see, you'll basically compete with your own customers.

Again, apparently, it can be done, but I would probably focus on wholesaling unlisted properties if I were in that line of work.

 Andrew, I would love to check out the podcasts that discuss this topic. If you remember any of the numbers please let me know, I haven't heard anything of these ones yet.

I've seen it done a few times, even bought one from a wholesaler once. Sometimes it's kind of annoying as the properties on the MLS are usually fairly close to market, so there's absolutely no margin in them. Other times, it makes sense. Watch out for Fannie Mae though, their deed restrictions make such wholesaling very difficult.

I think Anson Young talked about wholesaling properties from the MLS in his first podcast. It doesn't make much sense to me though, for reasons stated above. I guess if you made crazy low offers and ever got one accepted theoretically you might have a deal, like buyers didn't care for a property so didn't make offers but if they could get it at THAT PRICE. Anyways, I would suggest to listen to every wholesaling-centric podcast you can get your hands on.

Absolutely... Wholesaling MLS properties isn't limited to only Investors. Agents/Brokers like myself wholesale MLS properties all the time to other agents as well as the public.

They are not always the obvious either... i.e. bank owned, or short sales.. they are also the absentee owners, the handyman specials, etc.

Thanks for some positivity. I enjoyed that article, I've been using different strategies to find motivated sellers and it struck me that the properties on MlS are motivated. I never payed much attention because of all the negativity towards the subject, but I'm now adding it to my marketing. I hate all the negativity on wholesalers, we don't all come from gurus, some are just using it as the first step in our REI career!

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