I'm an investor/Realtor in upstate South Carolina. I was on craigslist yesterday and noticed several ads from wholesalers with properties that needed investors to purchase these properties. Before I contact these wholesales, does anyone have any tips or advice. I have flipped several homes, and know my market extremely well. Have any of you investors had much luck building a relationship with a certain wholesaler? I have never heard much about wholesaling (or really knew what it was) until I became a member of bp. My original mindset was if these properties are such good deals then why aren't the wholesalers buying them? Thanks for the help.
I can't speak for upstate SC but as far as the Columbia area I have to say no.
Most of the ones I see are in "D" types of areas and war zones.
There is a lot of daisy chaining of deals going on and it's getting worse.
I'm sure some wholesalers are very good at what they do. Any profession can be done with high standards and quality. I just haven't seemed to come across that in SC yet.
Like the Tiger Paw, Go Tigers!!!!!!
A lot of wholesalers do not have two nickels to rub together.
Many of them also do not know how to value a property correctly to make it a deal. Some actual wholesalers with years in the business or longer might buy some for their own but might have more than they can take down themselves. For that reason they sell them for a fee.
I market for my own real estate business as a commercial broker. I find most wholesalers simply a waste of time. So I go out to find my own deals because the wholesalers in many cases do not know how to value property.
@Adam Drummond The only way to know if a wholesaler is worth working with is to meet them and see if they know how to evaluate deals. Do they know how to come up with an accurate ARV? Do they know how to estimate rehab costs?
To me the value of a wholesaler is someone who can save an investor time by doing these things and do them right. Up here in Connecticut, I have not been able to find a wholesaler who can consistently deliver that. That's not to say there aren't any up here, but it's a unique skill set to have if you do not have experience.
Thanks for the response guys. What you both stated is kinda what I was assuming. I am on the mls everyday, and there aren't nearly as many deals (in my area) as there were a yr ago. From what I am seeing most of the foreclosures are starting out overpriced, and some are very slow to lower the price even after 45 days on market. I was thinking that maybe I needed to check into other options other than reo properties. I sold my last flip a few months ago, and am looking to put my money back to work, but taking a little longer to find the right deal. Staying patient though, and i'm sure something will pop up.
you are in the wrong area of the state to like the tiger paw. :)
Ditto what everyone above has said. I would love to work with wholesalers but also haven't found any around here yet. All of the flippers I've met around here find their deals themselves.
I say no harm in asking these folks to send you info on their deals. In my experience, that's helped me weed out probably 90% of wannabes. You'll be able to gauge pretty quickly whether they have a clue what they're doing just by asking them to email you some info; do they have photos to share, a rehab estimate, a basic breakdown of the rehab components (not just, "It needs 20k in work"), and an accurate ARV, maybe even some comps? Do they understand the basic math involved in a flip, or do they tell you something like, "Property is worth 150k; Purchase price 100k, rehab 20k, make 30k profit!"
Bottom line: I figure it never hurts to ask them to send me info, but I don't waste time driving out to the properties until they prove some knowledge.
I deal with wholesalers in Philadelphia and I have 1 in particular that I do most of my business with bc he's the most trustworthy. There's so many boarded up and vacant homes in philly that wholesalers actually do a lot of the leg work up here finding owners and checking liens, finding unpaid taxes, making offers, and actually getting the deals done. Not sure what your markets are like but that's philly in a nutshell, some areas.
It does make for some well let's say interesting conversations lol with my friends..
I represent the orange and purple in Chicken town quite well ha ha
For me the short answer is people work with who they trust, and have relationships with.
that is an easy answer, and no offense, but I have to take a first step to even explore the wholesaler avenue. If I relied on trust... I would rely on myself as a realtor to find a deal on our local mls. from what I have noticed several of the wholesaler websites that I have found in my area online want your name, number, and email before you get any information. seems shady to me.
In my experience here in Charleston, there are very few wholesalers who know what they are doing. I make a dedicated effort to forge relationships with the few wholesalers in my area who are the real deal. We bought/flipped 4 houses last year that were purchased through wholesalers. We paid assignment fees of $1300, $4000, $5000, and $10000. The $10000 assignment fee deal was also our most profitable flip. I also wholesaled 4 properties myself this year. We like to flip in A-B neighborhoods, so I wholesale the ones that our marketing brings in C-D neighborhoods. We flipped 10 houses in 2014, so 40% came from wholesalers. My goal for 2015 is to flip 18 houses and wholesale 12. I enjoy wholesaling to landlords and DIY homeowners. If you know how attract motivated sellers, how to evaluate a deal and how to talk to seller and buyers, wholesaling is a no-brainer. There is also good money to be made.
@Ronnie Boyd @Adam Drummond
I just turned down a deal in Conway, SC from a wholesaler. The numbers were GREAT, but I was concerned that it was too far from home for us to successfully manage a rehab.....I still wonder if it was a missed opportunity. We run Radio and TV ads and get lots of leads from the upstate. PM me and I will put you on my buyer's list for the deals that are just too far from my home-base in Mt. Pleasant.
Hope you have a good day, and find what you are looking for
thanks man. maybe networking and connecting with other people connected with real estate is what i need to do to take it to the next level. by the way, i noticed you had a military background... thank you for your service.
@Adam Drummond thanks for your support of the military, and I totally agree with you about networking, and investing in relationships. Investing in relationships has the potential to get you more deals than you can handle.
I have hit the reset button on my investing activities, and I am focusing on building relationships, and helping people full time, and I strongly feel that has been moving me forward to my own goals every day.
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