Consider this my second post ever on BP!
I am an associate broker with Exit Realty in Manhattan. My primary client acquisition strategy is cold calling fsbos. While I understand fsbos are also great leads for potential wholesale deals, it has been my experience that no seller in the five boroughs of New York would go into contract without seeing a proof of funds or financing.
I don't want to say it's because New Yorkers are too savvy (in a way I do!), more like leery of anyone saying they will sign a contract with NO DEPOSIT or a measly $1000 and then have another party actually buy the property. It will not happen in New York.
Now I would love to hear stories of any New York City wholesalers, investors, agents, brokers that have wholesaled a condo, co-op, building, vacant lot....anything!
Super false, New York sellers are as clueless as any other group of sellers. If sellers arent saying yes to you then it is your approach. I personally worked a wholesale deal live on stage with a real seller on the phone for a property in Queens during a guru event in North NJ.
Lets start with the basics, all wholesaling is, is buying at once price A and selling at a price that is higher than A. You can do this anywhere on earth where private property rights exist. I will even point out that this is exactly what you do as a realtor but you call your profit a commission. Surely you dont sell property for no profit.
Now there are two primary ways to wholesale a house, you can go and buy it yourself (not my favorite) or you can controll the property with a contract, have no money in the deal, and flip the contract (another form of the same activity). I much prefer the second, because if changes my approach and my elevator speach.
If I am looking to wholesale by flipping a contract now my approach is to partner with the seller rather than prey upon him or her. In this partnership my job is to get the seller what he wants for his house, I get to keep anything above that. It is similar to what you do as an agent but my profit is unlimited.
With partnership in mind, the seller is my inventory, I do all of the work, and they just sit back and wait for me to bring them money. You will get a lot less resistance with this approach.
Lastly, I use an option agreement to allow me to market the property without the obligation to close if the deal doesnt work in the market.
Now go forward and conquer
Well, read some other recent posts, advertising the property, selling the property when holding only a contract, let's tweek that to sell the contract.
I've not purchased or sold in NYC, I have looked into NY laws, I won't say it's impossible to wholesale, my thought would be to the attorney closings and them not informing all parties, which could mess up a deal, but, as Josh mentioned, the approach might be the problem.
If you list it, they aren't getting any cash then, so what's the difference? Are you fully disclosing what you're doing or acting like the buyer? Are you taking title or just assigning contracts?
Things might be highly improbable but nothing is impossible, unless it goes against the laws of natural sciences, like pigs growing wings and flying. :)
I've met a couple wholesalers at local real estate events, so there are certainly people doing it. Speaking with a few real estate agents, is especially prevalent in more speculative neighborhoods, such as around Broadway Junction and South Bronx. If you take a drive through neighborhoods like that, you will see DOZENS of "we buy houses for cash" signs...they are everywhere!!!
Also there's the possibility of being offered a (questionably legal) "finders fee" for locating the owner of a blighted/abandoned property and securing a deal for an institutional/established investor.
So the above commenters are right! It is possible, but in my opinion probably very difficult.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!