New wholesaler here in need of some guidance....
NRH, TX · Member since 2014 · 10 posts · 2 votes
Good morning everyone!
I am looking to start wholesaling property but need some guidance... I started driving for Uber so that I can learn the roads of DFW since I am not from the area, along with studying to get my real estate license to gain more knowledge. Next step is to actually find properties that are up for grabs, get them under contract and then offer them to investors. Now these are just a few of the questions I have but if you have anymore suggestions please comment... Thanks!
1) Where do I find these properties to wholesale?
2) What are the contracts used to tie it up with the seller and then sell it to the investor?
All suggestions and recommendations are greatly appreciated!
@Mark Vejnar Sorry, but some of your advice is a little off for Texas.
Texas is a non-disclosure state. The MLS is the only accurate method of getting sale prices. Zillow, Tulia, Realtor.com, etc. do not pull sales data from the MLS listings and will only give you the last listing price. Not a good source of data. However, Redfin will allow you to build comps based upon actual sales. The Dallas/Ft Worth market is too hot to go back beyond 6 months. You're better off working from sold data in the past 3-months only.
I don't know what Mark meant by "...tougher in TX w/no zoning laws?)." Texas absolutely has zoning regulations. They are by city, but they definitely exist. The standard rules apply when building a list of comparable properties to determine ARV...
The only way to get MLS access is to be a licensed realtor or get a realtor to give you access to one of their non-agent MLS accounts. Otherwise, no MLS. Again, Redfin will get you most of the information you need, and it's reliable. There is another site in the DFW area that provides almost native MLS search capability. PM me if you would like the link.
You absolutely need to understand the market. The best thing you can do is to pick 2 or 3 elementary schools and focus on their feeder areas. You will quickly find that in the suburbs school quality drives demand & desirability. If you want to focus on houses with median ARV's of $150k, then find areas with that as a median home value and then figure out what the best schools are in those areas. It is location, location, location. But, as an investor, you're looking for the worst house in the best location.
Good luck.
Hi Joshua check out BP podcast cast on there you will learn a lot also in the search box (top right) type in what you are looking for and you'll find information there as well. Good luck !
Hey Joshua,
I wholesale in Dallas also, (and I'm a huge fan of Uber btw), a lot of investors have sites that offer you a free packet of RE forms/contracts/etc. If you can't find them, message me and I'll be happy to email you a few over. As far as finding deals when you first start out, I've used bandit signs(sometimes frowned upon, but just be careful with placement), searching the FSBOs, and word of mouth. Good Luck!
Joshua,
There is a plethora of places to find wholesale deals and techniques used to find them.
1. Bandit Signs
2. Craigslist Ads
3. Absentee owner lists
4. Pre Forclosures
That is just to name a few. I have a question for you though. How do you know that wholesaling is something you want to do? I mean you've obviously heard of wholesaling from somewhere that its given you interest in the niche. I'm not trying to sound rude, but if you don't know different ways or places to find distressed properties then why do think wholesaling is something you are even truly interested in aside from the possible income from it? Cause the truth is, not everyone can do this. Self Educate yourself on everything to do with wholesaling, MAKE SURE it's what you want to do and that it fits who you are. There are so many people who start wholesaling cause they think anyone can do it, and many times new wholesalers screw sellers over. I am not saying that you would, all I saying is that you need to make sure this is what you want and that you are willing to do whatever it takes to make wholesaling work for you, and not at a sellers expense.
Well, since you're already in the car, why not try driving for dollars (just kill two birds with the same petroleum-motivated stone).
Drive around.
Look for signs of neglect.
Take a pic and write down address/location of homes/buildings/land that look interesting.
Pull public records on it.
Contact the owner.
Keep checking BP for what to do next.
I just listened to a BP podcast where the wholesaler (from Richmond, VA) recommends df$ as a great way for newbs like us to start.
Have you done any trend analysis yet? As in, identified the areas where more than 50% of purchase transactions are occurring - could be a good way to narrow down where to drive.
There is some good advice here so far with everyone who has posted already! However, I feel the biggest one has not been said. DIRECT MAIL! Check out these two links:
Direct mail from bigger pockets!
Direct Mail via biggerpockets2!
Joshua I hope you will find that you get what you put into anything in life. For my company, we have tried all of the other methods listed before but the real leads that actually turned into deals was direct mail. You can go to list source.com, click2mail.com, and yellow letters.com. I have heard from one person that they purchased an absentee owner list (where someone owns more than one property) for $60 for 500 names and addresses. Personally I spent $246 for 1,200 names/addresses and I am continuing to mail to that list for 6 months. The key is to not give up after the first letter that you send out. I did not get any deals until the 2nd and 3rd letter. Just one deal has doubled my money back and then some now from here it is all profit (minus my expenses). Hang in there! You can do it!
@Sable Weldon Makers of Uber are smart! Thanks for the tips and I'll pm you to get that info as every bit counts.
@Brandon Kargol Hey, I understand where you are coming from... Not just everyone can do the job. It takes certain type of people to do it. And, yes I've heard it's a nice way to make income but that's not the only reason. I'm posting to get the different suggestions and tips to go out and produce results. My goal is to develop lasting relationships and gain referrals, definitely not to screw any sellers or buyers over! Where do you suggest obtaining information on pre-forclosures? Greatly appreciated!
My thoughts exactly with the driving for dollars idea. Hey, so you mentioned pulling public records and doing trend analysis. What are suggestions on doing these?
Direct mail is something I was listening to on one of the recent bigger pockets podcasts. So it's definitely one of the ways I will be going. What would be some good ideas to put out on those letters/postcards? Looking forward to success, giving up is not an option!
Appreciate all your comments! Any other suggestions and tips are greatly appreciated!
@Mark Vejnar has a great point. Driving for dollars is a very easy way to get properties. You may get some angry phone calls, but if you keep grinding it works. Look for houses that have the appearance of being distressed (unkept lawns, fading paint, cracks in the brink, roof issues, etc.). Probate is another great way to find houses. You can go to many different websites and buy these leads. From there you can send letters to the PRs (Personal Representatives) or call the attorneys themselves. If you search Rick Harmon on BP, he has posted some great advice on how to handle probate leads. If you have any questions, feel free to PM. My partners and I work out of the Fort Worth area.
Best of luck!
Ross Schneider
Hi Folks...
I have a burning question I hope you guys and gals can help me with.
Is it ETHICAL and/or LEGAL for a Real Estate Agent to be the Listing Agent on a Property he/she owns as a managing member of an LLC?
@Ross Schneider Thanks for the tips! Definitely driving for dollars as well!! Will do more research on those probates too! Nice that your out of Fort Worth, will be contacting you with questions for sure!
Trend analysis: where are people buying, and why?
Search BP how other investors are checking comps. You can also use Zillow and Trulia heat maps. Some list brokers also have some good resources. Look for closed sales in the last 24, 12, 6, & 3 months respectively. Track those numbers by zip code and pay attention to land use boundaries (though I'm guessing this is tougher in TX w/no zoning laws?).
Visit the city. Online and in person. Learn egov like your life depends on it. Ask people at city hall about egov and how to use it. Once you've done some deals you'll likely have access to capital to purchase subscriptions for more efficient databases, but grinding through the city will help your learning curve. This progress reveals owners and chains of title.
Does dallas mls have a non agent portal for other R/E professionals? If so - do a deal and then start attending that training. Tons of nuts and bolts stuff there.
Read the city's municipal code - not required but you might be amazed at what you learn and how that knowledge arms/protects you.
I say this because if I was learning a new market, this is where I would start. You know the rule in real estate: location, location, location. Knowing the wwwwwh of your chosen locale is, I believe, critical. And also a tremendous value add when partnering. During this process you will meet real estate pros who will give you better, more specific information. Stay in contact and offer free help.
Seasoned pros - please correct me if I'm off base here. I know value but am a greenhorn to investing :-D
@Mark Vejnar Sorry, but some of your advice is a little off for Texas.
Texas is a non-disclosure state. The MLS is the only accurate method of getting sale prices. Zillow, Tulia, Realtor.com, etc. do not pull sales data from the MLS listings and will only give you the last listing price. Not a good source of data. However, Redfin will allow you to build comps based upon actual sales. The Dallas/Ft Worth market is too hot to go back beyond 6 months. You're better off working from sold data in the past 3-months only.
I don't know what Mark meant by "...tougher in TX w/no zoning laws?)." Texas absolutely has zoning regulations. They are by city, but they definitely exist. The standard rules apply when building a list of comparable properties to determine ARV...
The only way to get MLS access is to be a licensed realtor or get a realtor to give you access to one of their non-agent MLS accounts. Otherwise, no MLS. Again, Redfin will get you most of the information you need, and it's reliable. There is another site in the DFW area that provides almost native MLS search capability. PM me if you would like the link.
You absolutely need to understand the market. The best thing you can do is to pick 2 or 3 elementary schools and focus on their feeder areas. You will quickly find that in the suburbs school quality drives demand & desirability. If you want to focus on houses with median ARV's of $150k, then find areas with that as a median home value and then figure out what the best schools are in those areas. It is location, location, location. But, as an investor, you're looking for the worst house in the best location.
Good luck.
@Hattie Dizmond
Thanks - yeah, I don't know TX at all. I appreciate the correction.
@Hattie Dizmond @Mark Vejnar I appreciate the detailed information! Definitely something to print and study.
@Mark Vejnar , which BPP episode was a Richmond, VA wholesaler on? I must have missed that one. Please advise.
@Daniel Harnsberger. I think 42 w/ @Mike Nelson
Hello everyone, my name is Shanon Oge. I want to added a question on top of @Joshua Carr recent questions. Read Below:
- How does a wholesaler sell a property to an investor that is currently own by the bank or the sellers lender? Any advice would be helpful, I think it would be beneficial to myself and Mr. Carr who is trying to learn how to wholesale. Thank You!
V/r
Shanon Oge
@Joshua Carr great advice from @Greg Carr , side note, are you guys related?!
I would suggest joining your local REIA (Real Estate Investors Association). You'll certainly encounter plenty of wholesalers there. You can learn a TON working for one, even for a short period of time. No need to re-invent the wheel, find out what's working and make it your own.
Best of luck!
FYI, if you are going to be a real estate agent 95% of the time your broker will not let you wholesale. It happened to me with my first two deals I sold back in 03. Look for properties in fringe neighborhoods. It also depends on what your buyers want. Are they looking for rentals, flips, multi units?
You would use a regular purchase and sale agreement and either assign that contract to your buyer or use another purchase and sale agreement with a higher price with your buyer. If you are fortunate enough your title co will not charge you closing cost. Mine, didn't because I brought them so many deal each month.
When you say owned by the bank, do you mean REO/Foreclosure? If so, there's not an easy answer to that one, once a property has been foreclosed it's hard to get a hold of until the bank releases it for sale. Then priority goes to owner-occupants and then after a period (I believe it's 30 days) it's open to investors. There is generally a lot of competition at that point, but still good deals to be had.
If you mean when the seller still has a mortgage on the property?
If a seller has equity in the property (owing less than it's worth) and they are willing to sell it at or below their equity, then you've got a deal! However, you want to make sure there's enough margin that both you and the investor make money.
Hope that helps!
@Shanon Oge Another good question!
Used his advice and signed up with meetup.com. Any group that you would recommend specifically @Greg Carr ? No relation between Greg and I but we all can surely build lasting friendships/partnerships.
Appreciate you all! This is definitely great information that I should have been seeking here way long ago.
The REIC meetups are great. Greg Wilson is very solid, but he will charge you. You can always find an older person who has done like 30 flips/rentals over many years and ask to just talk to him and if he can mentor you through your first deal.
There are so many meetups around DFW (especially in north Dallas). Roddy Roundup is excellent. I like the REIC. Just look up DFW real estate investor club in meetup.
BP maintains a list of local REIA's. These are separate from the MeetUps. The North Texas club meets tonight, NTREIA, at the Richardson Civic Center (Arapaho & 75) @ 6:30.
Here's a link to the BP club finder...
So we use some creative techniques on our mailers @Joshua Carr. I think the best thing for you is to start doing some direct mail and do the opposite of what everyone else is doing in your market. In my market everyone seems to be doing the yellowletter where it is a letter in a "typed" font and looks like it is handwritten. We tried this and we did not have much success. So, we do the opposite. We use a business letterhead and we have had some good success with that. We also try to get creative with putting a picture of your dog, cat, or child and try something like: "Suzie (the cat) would like to know if we could prrrrrr-chase your house. I don't know but this is what I just came up with. You need to use your imagination and be creative with this. Sellers get really tired of getting these letters all of the time so you need to break the ice with them. Try to just be real and try to be unique!
PM me if you want to know anymore! Good luck!