New member in the Atlanta, GA area interested in Wholesaling
Hello! My name is Braxton Hendricks, II. I'm seeking to get into wholesaling in the Atlanta, GA area. I've been a BiggerPockets Pro member since last November. I'm a previous homeowner and landlord, but for the last decade or so, I've been renting. Previous failures have made me hesitant, but I really would like to strengthen my knowledge and try again. To that end, I've been watching several BiggerPockets webinars and reading If You Can't Wholesale After This, I've Got Nothing For You by Todd M. Fleming. If there's anyone out there who can provide some practical advice on the wholesaling process, please do so. Thanks for your time!
- Tax Strategist, Financial Planner and Real Estate Investor
- Atlanta, GA
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@Braxton Hendricks, welcome to Bigger Pockets.
I recommend that you join one of the local real estate investors associations to network and learn about wholesaling.
Check out the Georgia Real Estate investors Association. They have a free monthly educational meeting for wholesalers.
Good luck and let me know if I can be of assistance.
#4 Wholesaling Contributor
- Wholesaler
- Austin TX
@Braxton Hendricks II The best advice I can give you is to not get caught in analysis paralysis. There are a million books and youtube videos etc, and they will all give you slightly different information. Go to local real estate meetups and REIAs and meet with investors and other wholesalers etc.
Lydia, thank you for your advice!
Bill, thank you for your advice! I will follow up on those recommendations from both you and Lydia!
@Braxton Hendricks II
As a wholesaler it’s important that you know your market and correctly analyze a deal. You’ll also need cash buyers, a closing attorney, buy/sell agreements.
Wholesalers have gotten a bad reputation over the years and rightly so. The deals that hit my inbox are always over priced and the rehab estimate is inaccurate.
The best advice I can give is don’t get greedy in your fees. It’s better to close a deal and receive a small fee, than trying to make $10k or whatever on each deal.
PM me if you would like to chat more.
Happy investing.
Canesha
@Canesha Edwards Thanks for your advice! What was your experience in closing your first deal? How did you prepare?
@Lydia R., @Bill Hampton Thank you both for your advice! I will follow up on the recommendations from both of you!
@Canesha Edwards do you have to possess a Real Estate license to wholesale in Georgia?
@Braxton Hendricks II
The first deal I got under contract was a major learning experience. Firstly, I partner on most of my wholesale deals. I typically find a property and my partner finds the buyers. However, we have the cash to actually purchase the property if we need to, but we typically double close and never have to actually buy the home.
Before I even spoke to the seller about purchasing the property, I researched the market ( Columbus, Ga), visited the area to get a feel for what was going on.
During my visit, I noticed there were new walking trails in certain areas ( similar to the Beltline in Atlanta), the University recently announced an expansion of their campus, the military base in close by, etc. This made me confident in that the home I was looking at could be a deal.
After I walked the property myself, I noticed a small patch of mold in the ceiling, one of the water heaters was rusty, but all in all it was just a cosmetic rehab.
So, I finally get the property under contract. And we send out an email blast. Crickets.... no one responded. So, we lowered our asking price and started getting interest. That’s why I say, it’s better to close a deal than to try and make a large fee.
The Due Diligence Period
One of the stipulations in the contract is that water and power must be turned on before the due diligence period starts ( the house was vacant). You want to do this so the property can be properly inspected. When I arrive at the property to make sure the utilities are on, there a problem. Come to find out all the wires have been stolen from the property and the property needs to completely be re-wired. That was problem number one. Once we work through this issue and get the seller to agree to a concession in price for the cost to re-wire the property, another issue pops up.
Two days before closing, our buyer’s property management company backs out because of the presence of active mold. Now our end buyer is considering backing out. We have a mold report ordered and sure enough the house has a major mold issue.
Now you’re thinking why wasn’t this caught before? Well one, the mold was not visible except for one small patch ( we took pictures of the mold before and our buyer was aware) plus the property was inspected by a professional inspector. I use that term loosely because his inspection report didn’t mention anything about the house having a major mold problem. Also, the owner swears ServePro recently inspected the property and determined that the mold remediation would be between $400-$500. Looking back I believe the owner knew of the extensive mold issue and was hoping we wouldn’t catch it.
In the end, we didn’t close this deal. Since we were technically outside of the due diligence period, we ended up losing our earnest money. We also covered the inspection expenses our end buyer incurred.
The biggest lesson I learned from this deal is that things can and will go wrong. That’s why it’s important to have a solid contract.
Building a team of trusted and skilled professionals is a must. Even though our buyer selected their inspector, he obviously wasn’t a very good one.
The last lesson I learned is that if an owner is claiming to have had a property inspected, or any type of work done, request to see the proof.
This deal taught me a lot about myself as a person and investor. But I’m glad for the experience. I’ll be that much better at negotiating, discussing tough problems with sellers and buyers.
Sorry for the long post. I hope this helps though.
Canesha
@Braxton Hendricks II
Wholesaling is a tricky field. You don’t need a license, but wholesaling in heavily frowned upon. So, to mitigate this, we double close. We also actually have the funds to close on the deals we put under contract.
@Canesha Edwards no problem on the length of the response - it is very informative! It looks like performing a double close is worth legitimizing the entire process. Do you and your partner have a monthly goal as to the number of properties you target?
@Braxton Hendricks II
I actually just start wholesaling to increase my capital. Right now my goal is to close between 3-8 deals a month.
@Canesha Edwardsgreat information, thank you for sharing!
When you say, "double close," do you mean that YOU close on the house, and own it for a short time before selling it again to an investor?
This is the approach I think I'd like to take.
And I realize this thread is a year old, so:
- Are you still wholesaling in the Atlanta area?
Did you make your goal of 3-8 deals a month?
And would you still recommend wholesaling in this area? (Is it worth it?)
Thank you so much for your responses!