Wholesaling for REIs only

9 Replies

If I want to sell off my SFH rentals which may be more appropriate for actual home owners instead of investors (based on <5% cap rate) is trying to work with wholesalers still a good idea to avoid the high commission % or just list with retail?

@Sam Bromano

It would all depend on their offers versus the final amount, after closing costs. 

I might suggest you consider owner financing them to buyers, unless cash is the motivator here. You will do considerably better than the market could ever afford to pay you. 

@Sam Bromano

 For me, I like to keep my terms in the 10-12 year range and interests rates at 9 or 9.5%, with 7-10% down. I prefer more interest dollars versus cash down. 

As far as documents needed, I would consult with an attorney in your area to make sure you comply with state regulations. 

@Sam Bromano

The only concern with having a mortgage, is it could trigger the due on sale clause, if the bank notices it. It can happen, but it's really rare that they do. 

Given that your homes values are that high, you might want to tweak the interest rates. My OF homes are priced in the 150-200K range, keeps my payments reasonably close to current rental rates. 

@Sam Bromano

In my deals I only advertise the properties for sale via Owner Financing. 

If I had tenants and wanted to sell, then I would approach them and see if this is an option they would consider. If not, as the lease would expire I would just list them for sale.

@Sam Bromano By definition, the way to get the highest price for any property is to expose it to the maximum number of potential buyers. For virtually any SFR, that means listing on MLS with an agent and a strong marketing plan.

Also by definition, wholesalers cannot "buy" (they don't) at market value.  They need to buy at a discount that leaves them enough room to add their markup and then resell their contract at a price that's still low enough that the investor is getting a below-market deal. 

Use a good, full-time Realtor and you'll not only end up with more money in your pocket, but you'll also benefit from them handling the showings, open houses, negotiations, contracts, disclosures, escrow, chasing buyer's paperwork, managing deadlines, etc.

Being a Realtor is like a chip shot.  From 50 yards away, it looks pretty easy.  But when you get up close, not so much.