Reliable Websites for Wholesalers

Wholesaling

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Reliable Websites for Wholesalers

Henry Montgomery III

Gainesville, FL · Member since 2016 · 93 posts · 14 votes

Where can I find reliable source of homes on the market for wholesale deals?

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John Thedford

Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes

BEFORE you deal with any unlicensed broker consider these ideas:

1. Always require WRITTEN comps that can be substantiated

2. Always require WRITTEN bids from LICENSED contractors

3, Always require WRITTEN comps to substantiate ARV

4. NEVER pay a non-refundable fee

5. Always correspond via email so there is written record to bring suit in the event of misrepresentation.

6. Always demand to see a copy of their contract.

Remember, these are middlemen trying to play RE agent without a license. Make sure they provide GOOD comps. Make sure if they are representing an ARV value make them provide ARV comps. If they make claims about rehab costs, make them provide WRITTEN bids from contractors. They are brokering real estate so make them PROVIDE good quality information like you could get from a licensed broker. Many of these unlicensed brokers simply make up figures that sound good but cannot back them up.

Unlicensed brokers generally have no insurance. From personal experience most just pull their ARV out of thin air. Lets see: claim it costs x and it will sell for y. If someone uses an agent, an agent won't provide or should NOT provide the BS an unlicensed broker does. They should not or do not provide rehab figures (to protect themselves). They should tell a prospective buyer to get their own bids. They can provide comps in some situations on an updated unit vs an original unit. Agents have something to lose, can be fined, and have their license suspended or revoked. Unlicensed brokers, acting as fringe operators skirting the laws have nothing to lose. They are acting as an agent without the laws, ethics requirements, education, and insurance that are vital IMO.

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Ralph C.
Real Estate investor professional · Suwanee, GA · Member since 2016 · 233 posts · 81 votes
9y
@henry Montgomery iii, not sure that there's a good site for that.
Good deals move fast and good wholesalers and or assignors will email any good deals they may have to their solid regular proven buyers.
Best I can suggest is get on those email lists so you can see what off market deals are out there so you can get yours.
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Henry Montgomery III
OP
Gainesville, FL · Member since 2016 · 93 posts · 14 votes
9y
@Ralph C. thank you very much I'm glad you taught me that early before I got to deep into real estate.
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Ralph C.
Real Estate investor professional · Suwanee, GA · Member since 2016 · 233 posts · 81 votes
9y
best way to get on their lists is networking local reia meetings....
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Account Closed
Investment Consultant · Austin, TX · Member since 2016 · 28 posts · 27 votes
9y
@Henry Montgomery III
I'm going to echo what @Ralph C. said. You definitely want to try and go to networking events to meet people. If you go to a meetup or meeting and say, "I'm ready to invest and I'm looking for a good wholesaler," I can guarantee that you will have a swarm of people trying to get your info.
If you're looking to get into wholesaling, you should get access to the MLS and start doing some pretty detailed research on the properties in your target area (this will help in finding good deals at any point in the process). You can also try your luck at foreclosure auctions or at finding distressed properties.
Hope I helped a bit and good luck!
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
Hi @Henry Montgomery III,
One of the problems with Wholesaling is it is against the law in most places to "publicly advertise a house for sale" without being licensed. Wholesalers can usually get away with sending to mailing lists of "friends" etc (the contracts they have not the houses they have for sale). But they can't put ads up and TV spots and signs. If a few got together and started a website they would have DOS on them quick. That's why you don't see a "MLS" of wholesale houses.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
BEFORE you deal with any unlicensed broker consider these ideas:
1. Always require WRITTEN comps that can be substantiated
2. Always require WRITTEN bids from LICENSED contractors
3, Always require WRITTEN comps to substantiate ARV
4. NEVER pay a non-refundable fee
5. Always correspond via email so there is written record to bring suit in the event of misrepresentation.
6. Always demand to see a copy of their contract.
Remember, these are middlemen trying to play RE agent without a license. Make sure they provide GOOD comps. Make sure if they are representing an ARV value make them provide ARV comps. If they make claims about rehab costs, make them provide WRITTEN bids from contractors. They are brokering real estate so make them PROVIDE good quality information like you could get from a licensed broker. Many of these unlicensed brokers simply make up figures that sound good but cannot back them up.
Unlicensed brokers generally have no insurance. From personal experience most just pull their ARV out of thin air. Lets see: claim it costs x and it will sell for y. If someone uses an agent, an agent won't provide or should NOT provide the BS an unlicensed broker does. They should not or do not provide rehab figures (to protect themselves). They should tell a prospective buyer to get their own bids. They can provide comps in some situations on an updated unit vs an original unit. Agents have something to lose, can be fined, and have their license suspended or revoked. Unlicensed brokers, acting as fringe operators skirting the laws have nothing to lose. They are acting as an agent without the laws, ethics requirements, education, and insurance that are vital IMO.
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
9y
Originally posted by @Henry Montgomery III:
Where can I find reliable source of homes on the market for wholesale deals?
Wholesaling without buying in your name and closing (the guru way) is a class 3 Felony in FL. per @John Thedford.
(!):-()
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
@Bill Gulley
3 legal ways to sell RE in Florida
1. act as a licensed agent or broker
2. own it (be on title-even someone with as little as 1% recorded interest)
3. have equitable interest
DBPR has stated to have equitable interest you must have a "reasonable" deposit. They did not define "reasonable".
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Henry Montgomery III
OP
Gainesville, FL · Member since 2016 · 93 posts · 14 votes
9y
@John Thedford when you say comps what do you mean?
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
If someone has a property for sale, "comps" means comparable properties that have sold recently in that area. General guidelines are within six months and the closer the better. I saw one recently where the "comp" (also called comparable sale) was actually right next door to the one for sale. Same square footage, etc. You can't find a better comparable sale than that. You cannot use sales where there was a circumstance that affected the sales price such as a death, divorce, or even owner financing (this could affect the price).
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Henry Montgomery III
OP
Gainesville, FL · Member since 2016 · 93 posts · 14 votes
9y
Thank you @John Thedford that was very useful
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
9y
Originally posted by @John Thedford:

@Bill Gulley
3 legal ways to sell RE in Florida
1. act as a licensed agent or broker
2. own it (be on title-even someone with as little as 1% recorded interest)
3. have equitable interest
DBPR has stated to have equitable interest you must have a "reasonable" deposit. They did not define "reasonable".
No idea of what DBPR says, but I'd bet there is more to that "equitable interest" as is common for all states:
Reasonable down payment*
Buyer having an intent and ability to perform as agreed, to hold an equitable interest under a contract the contract must be binding, not voidable. All of the elements pertaining to contract law need to be met, folks can look that up.
There are other ways as well, Specific Power of Attorney from an owner, estate settlements, generally an executor may charge a nominal fee for services, but you can't do this as a business, but just saying....
A reasonable down payment might take a book to explain at the eighth grade level (LOL), as that depends on the property condition, marketability of the property.
Take a $100,000 home in good condition that is marketable, reasonable might be $2500, in the event of default a seller needs to have enough to pay for associated costs, the property was taken off the market so all the past advertising is pretty much in the dump, they must start over again. Look up a big word "indemnification".
Property condition, let's say it's a real pig dump, not listed or advertised, maybe it has a good location but everything else is down hill, value is the same, but the down payment may well be reasonable at $500, that's because it is not a "marketable" property. The owner is taking much less risk in trying to dump this place and requirements to indemnify that seller can be much less.
Another point, $10 is never a sufficient down payment in real estate to support an offer in the tens or hundreds of thousands, nor will that stand trying to enforce a contract.
If you don't have money, sign an earnest money note, make the amount reasonable, the note to be paid at settlement! This is adequate consideration you don't have to use cash, if that is acceptable to a seller.
Instead of thing you're learning real estate from investor guru junk, learn the basics of real estate before you take this stuff hook, line and sinker, lose time, money or worse, get nailed by authorities! :)
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Bill Gulley EM Notes used to be the rule in Oregon... coming from CA to Oregon 20 years ago I had never seen them.. in CA it was cash on the barrel head... and not 10 dollars more like 10,000.
but we know Bay Area is an anomaly of high priced RE .
what I like about the EM note wholesalers can use.. is if they flake out the seller can simply take them to small claims court and get a judgement based on that EM note...
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
9y
@Jay Hinrichs
Yep, it's a promise to pay and has little to do with settlement, default on the deal, pay the note off or you could be sued.
Going a step further, buy the place with 100% seller financing, close the deal, title goes to you as a buyer, then, an hour later, sell it for cash, payoff the note, there is no sneaky settlement statement trying to hid fees, perfectly legal and ethical with an informed seller. They just have a some things to learn Jay! :)
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Henry Montgomery III
OP
Gainesville, FL · Member since 2016 · 93 posts · 14 votes
9y
Bill Gulley Jay Hinrichs that's why I'm on bigger pockets now because there's so much to learn!
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Kevin Yeats
Lender · Fort Pierce, FL · Member since 2009 · 825 posts · 486 votes
9y
I learn something from you experienced guys everyday (almost).
1 Reply
Dave McEvoy
Wholesaler · Montgomery, NY · Member since 2016 · 84 posts · 10 votes
9y
Whatever you do don't let the nay sayers get you down. John Thedford for example thinks all wholesalers are scums of the earth. I think he trolls the wholesale forums just to tell us all we suck, break the law, and have no business trying to make a living. Good luck and don't give up. It takes a while but perseverance will make it happen.
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John HornerPro Member
Flipper/Rehabber · Columbus, OH · Member since 2013 · 1k+ posts · 655 votes
9y
If a website like that existed then there would be no need for wholesalers.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
Unlicensed brokers work against sellers. They try to drive the price down, shave off the equity, and then pass the "deal" on to someone else. An agents job is to get the most for the seller. The assignment clause in contracts was never meant for people to use as a way to circumvent the licensing laws. I like the way Bill Gully phrased the practice: public nuisance:) Screwing owners out of thousands of dollars and passing the deal on is what benefit to a seller? Nobody can explain that.
IF it was a LEGITIMATE service the states would license the practice! "Unlicensed broker" is a polite term to refer to these fringe operators.
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Milton Vickers
Wholesaler · Upper Marlboro, MD · Member since 2010 · 7 posts · 0 votes
9y
John, I would like to pour water on your argument...as a licensed agent your job is to represent and get the best deal for your client whether you buyers or sellers agent. In either case you job is to get the property at best price...buy low for buyers and sell high for the seller. How is this any different than being a wholesaler? you have no ownership in the property but you are making money to broker the deal. Buy the way, unless FL is different as a agent you have to pay the broker a big piece of you deal. As a licensed agent, you don't get to go out on your own until you have spent time under a broker; normally 3 to 4 years.
Milton
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
@Milton Vickers
Sorry I can't agree because these unlicensed brokers are slicing off equity and passing the deal on. Finding a buyer, slicing off 10K of equity and pushing the deal out 20% UNDER market is a disservice to the owner. They ARE brokering real estate by skirting the laws. Assignment clauses were not intended to be used to circumvent licensing but in some states they get away with it. Some states are cracking down and you cannot advertise the house ONLY the contract. Anyway you slice it, these unlicensed brokers are NOT brokering a contract but rather a house. As a listing agent, my job is indeed to get the most for a seller. One of the top ten reasons agents get sued is misrepresentation of value. When I am asked to look at a property, my obligation is to tell the seller what it should sell for. I DO always have the option to offer to list it for "x" or purchase it for 'y" and have done so. Either way, the seller is never deceived. Our default transaction in this state is as a transaction broker, not representing either buyer or seller, but rather the transaction. Those using BS escape clauses, etc using the assignment clause as a way to skirt the laws as a business ARE brokering real estate whether they want to admit it or not. I don't hate unlicensed brokers but I will NOT support their activities and do my best to educate people. I personally have met several people that were victimized by these scammers. As I said: IF it was truly a "service" the states would license the practice.
You say "BTW, how is unlicensed brokering any different".
Agents are licensed
Agents have accountability
Agents cannot misrepresent value
Agents have insurance
Agents have ethical requirements
etc, etc
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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
9y
@Milton Vickers,
I have no issue with the practice of Wholesaling in general. I think there are plenty of instances where it makes sense. Investors trading flip houses back and forth etc. When dealing with the general public though there have been plenty of abuses.
However the difference is one group is regulated and managed by a board to include ethics etc. If you are "having no ownership in the property" and you are "brokering" a deal you are acting illegally. I am not the one that made the rules or laws, I choose to follow them though because that is the type of business I decided to run. The government made these laws to "protect the public" from unfair selling practices. You see it on here all the time "How I suckered a little old lady out of $265K of her equity and now she eats cat food to survive". As a licensed agent you have a fiduciary responsibility to a party. As a wholesaler you have a responsibility to yourself.
The only reason not to spend the $300 to get licensed is that you want to be able to act in ways that are considered illegal or unethical. The more people that do it just bring on more pressure to everyone in the industry. They bring more regulations and make house buying and selling to be more difficult.
Just my 2 cents
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Milton Vickers
Wholesaler · Upper Marlboro, MD · Member since 2010 · 7 posts · 0 votes
9y
Mike, point taken...However, all wholesalers are not unethical. Wholesalers want repeat business. Our best advertisement is mainly word of mouth. I normally, get a letter from my clients stating how satisfied they are with the transaction. My goal is to always have a "Win/Win" transaction. I have to work with agents to get my job done, so I certainly don't have anything against them or any agent.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
9y
@Milton Vickers
You refer to "clients". So if you are NOT brokering real estate what is your role? If you are taking a slice of the equity and pushing the deal out under market how is this a "service" to a seller? You made NO argument to my post.
This is another post from you: I would like to network with you assist you in finding deals both wholesale and Flipping. Please contact me to discuss what type properties you are interested in.
Milton Vickers
"assist you in finding deals"? Can you say "brokering"? You state you are operating ethically yet you are brokering without a license. How is that ethical?
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Milton Vickers
Wholesaler · Upper Marlboro, MD · Member since 2010 · 7 posts · 0 votes
9y
Once again you obviously are a lawyer and can read between the lines. Where in my statement did I offer to buy or sell them any real estate. I said assist them in finding deals. I did not mentioned what type of assistance. By the way, I'm not in FL and it is not illegal yet in MD/DC/VA. P.S. I see that you are a Hard Money lender...I bet you use a lot of ethics in your over-charging of interest to fund deals. I'm sure that those deals are all to licensed wholesalers/Flippers because it would unethical you to lend high interest money to on licensed individuals. I can't wait for your comeback (smile).
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