Huntsville, AL · Member since 2017 · 42 posts · 6 votes
Hello all,
So as a newbie it is taking me some time to get the owner of a home to contact me for a sell. So I have been responding to ads listed (mostly of craigslist) as for sale by owner. When I contact the poster of the ad, every person that answers the call is either a real estate agent or an investor looking (not stating that they are the actual owner) to sell the property for the owner.
How would I be able to do a deal with someone like this if I feel it is a great property to resell to one of my cash buying investors?
Huntsville, AL · Member since 2017 · 42 posts · 6 votes
9y
I'm a newbie wholesaler and just want to make sure I can do deals with agents acting on behalf of the seller. If I do get into a contract with an agent do I have to pay them a fee?
When wanting to contract with the agent or investor (acting on behalf of the seller) is it okay to email over a properly filled in contract stating our agreement?
Would it be weird at closing that I show up with a buyer (that isn't me) and proceed with closing as if the seller knew that I am a wholesaler?
Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes
9y
Danielle Spears
Doesn't make sense to wholesale a deal with a seller already listed with an agent. Seller is going to want max market value. Any buyer interested would just do a normal transaction.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
Danielle Spears Assuming that there is an owner with a contract through an agent, hopefully the agent is being fair to the buyer in the way that they price the property. If there's a motivating factor in terms of timing I can see why an owner (even with an agent) would want to undercut the market. However, I'd imagine that's an extreme exception.
The other scenario is that you would be stacking up wholesale deals. So there would have to be enough margin to take care of two wholesalers while leaving enough meat on the bone for an investor. I'd also question why an investor wouldn't have snapped up the property from the first wholesaler of it's not a great deal. Once it hits Craigslist it's not exactly a "secret" at that point. It might be "off-MLS" but it's not "off-market".
So as with all things, there's an element of "what do they know that you don't?" that could explain the pricing. Of course, I could have summarized all of this reply with "be sure to do your due diligence".
Huntsville, AL · Member since 2017 · 42 posts · 6 votes
9y
thanks so much @Andrew Johnson ! As Stanley stated I will have to be flexible in my conversation. Valid point on why the investor wouldn't take the deal and try to sell it off. I can't wait until my email and phone are flooded with calls and emails from sellers wanting to work directly with me. Until then, I have these leads to go off of and a couple of fixer uppers I found around town that I haven't reached an owner yet.
I am very appreciative of the information you guys have shared with me. This has definitely expanded my knowledge.
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
@Danielle Spears Sounds like you're on the right track but just for perspective. What path did you take to find the fixer uppers around town where you haven't reached out to the owner yet? I'd double down on that strategy (and reaching out to those owners) for a little while to see what results it yields. The potentially addicting thing about talking to people on Craigslist is that you know they want to sell. They're eager to have a conversation, extremely so if they're a wholesaler or an agent that bothered to put up a Craiglist ad. You might find yourself in a time-suck that feels good because you're at least having conversations. Compared that against leaving voicemails that don't get returned to homeowners of fixer uppers. The latter is painful, will seem like "nothing is happening", but you might end up with a higher chance of closing a deal. The long-term benefit to doing the hard digging (not on Craigslist) is that you can periodically reach out to the owners to see if their sense or urgency changes. I don't know (there might be) if there's much value in building wholesaler-to-wholesaler database to try and re-resell deals. Maybe there is, I wouldn't know.
That said, if you're dealing with wholesalers or agents I'd try to arrive at what "your number" is very quickly. If it doesn't look like it's going to work, rip the band-aid off quick.
One scenario is that the house is in perfect shape, needs little to no work. The seller will want market value. In that situation, there will be little to no margin for you to then markup the price to assign it to an investor. An investor, even if looking for turnkey properties, isn't going to want to pay over market to cover your fee. So, it doesn't make sense.
The only way it makes sense, is if you are getting the property at a discount deep enough to cover your fee and still leaving the investor room for their margin. Ideally, you need to find off-market properties without an agent already contracted to sell it.
Can it be done with an agent already involved? Yes, if you can get the house at a deep discount and still leave margin for your buyer.
Huntsville, AL · Member since 2017 · 42 posts · 6 votes
9y
@Andrew Johnson I drove around a few neighborhoods to find the homes and then I web searched the address to find the last known owner. Yes the fact that I know the sell is ready from the Craigslist ads has kept me going after more of the leads. I haven't quite mastered how to get better leads on the fixer uppers I find, so I keep going with the Craigslist ads. I will keep in mind that the price of the sell on these Craigslist ads is the ARV (mostly) plus the agents or investors commission and they most likely won't budge for me. Thanks
Huntsville, AL · Member since 2017 · 42 posts · 6 votes
9y
@Christopher Phillips thanks! My conversations thus far with these agents has been just that. No room for me or my investor to profit. 100 leads before I get just 1 right? lol
yup. Sometimes it's just one out of one hundred. But, you can certainly find more luck with the effort. Problem is balancing effort with cost. You could drive around looking for vacant homes, circle prospect around recently listed or recently sold. Drill through notices of default, sift trough probate at the courts. Target non owner occupied homes...