advise for me as a wholesaler?

Question

Good luck!Do you have any advise for me as a wholesaler? My current method is to scour the public records, going 3 months back to the current date and making a list of every case that is pre-foreclosure. From there I have a letter that I prepared and I pay a friend to hand write the address on the envelope. I've been slacking but I've gotten 3 potential leads so far. 1 guy was underwater, another already had an agent working a short sale and another just never got back to me. A friend told me that the method I'm using would involve a lot of short sales and underwater properties. Should I continue this method or switch to something else like bandit signs?

Tangie Cousins · Answer

Neetu, I can help you with that if you would like to reach out to me  :)

Neetu Punjabi · Answer

@Dev Horn

Thank you for the suggestions.  Already tried the courthouse and the clerk's office.  the ladies were super sweet, but didn't have the info.

I'm sure I'll find it somehow.  I'll let you know what transpires.

Jamie DeRossett · Answer

Short sales were the craz 2007-2012 when over 50% of american mortgages were underwater, meaning they owed more than they are worth.  My wife is a broker/agent and during that period all large percentage her marketing and work was from short sales.  We have alot of experience and have done hundreds.  The biggest hurdle and the one many investors are never able to cross is the bpo or appraisal that every underlying lender does to access the value of their asset.  However, there are investors out there that have mastered the art of low ball negotiations via the short sale.  I don't know how they do it, but would like to know.  One of the reasons we have had so much success is that I know every appraiser in my market and have a good relationship with everyone and that goes a long way in getting the value to come in really close to what you need.  My wife has now shifted her business model to conventional sales because they close much quicker and all the wholesaling has cut down of the pie.  She has 2 short's now has been working them close to 12 months.  That is the problem they take so long to close and then you can get close and then the bpo comes in high and there is no margin and you have wasted all that time.  Thanks for the post and have a great night!

Dev Horn · Answer

Hi Neetu!  It varies by county.  First, look to see if yours has a listing of code violations online.  Probably not, but I've seen them.  If not, consider visiting the courthouse and befriending a clerk to find out what information is available.  Tell them your objective is to help to clean up problem properties in the community - that you have a mission and money and you're out to make Round Rock a nicer place.  Maybe bring bagels.  ;-)

Neetu Punjabi · Answer

Hi Dev!

I've heard that marketing to code violations, probates, and tax delinquents will lead to finding good leads for wholesale deals.

Do you have any advice on how to find these lists - particularly code violations?

Thank you.

Minh Lai · Answer

@Dev Horn - Got it. My approach will connect mostly with ppl underwater since they'll be nearing foreclosure.  I'll change my approach then. Thanks for the feedback.

Dev Horn · Answer

Both short sales and underwater sellers are of NO VALUE to a wholesaler.

You need to find motivated sellers with SOME EQUITY where you can make THEM (not the bank) an offer, get that deal under contract, and then assign that deal to one of your cash buyers.

Short sales are negotiations with BANKS and they (and the agents involved) will eat you alive because you don't have money or their level of expertise in real estate.  And you think you're going to get a smokin' deal from a bank that you can assign to a cash buyer?  Highly unlikely.  New to REI? Stay away from short sales and foreclosures until you have a well-developed strategy for working them.

And talking to people with no equity is a massive waste of time for wholesalers.  As a wholesaler, you don't even have a chance of a deal unless the seller has 40%+ equity compared to the ARV.

Wholesalers will do best marketing to lists such as absentee owners, code violations, probates, etc. where you can pull such a list based upon % equity in the property.  You'll also do well with an AdWords account running keywords such as "sell my house fast", "buy my houses as-is", etc.  And signs can definitely work as well.