Wholesaling how to not get stuck?

Question

Hello guys, I started the BP podcast in August and its been a daily thing.  I am interested in buy and hold rentals but my wife and I were walking in a very nice area of our city of Hollywood Florida.  And found this shell of a house.  I'm thinking I'd like to offer and wholesale this for someone who can rebuild and flip this property.  And I feel too inexperienced to take on a flip like this but this could benefit someone on BP here.  I don't know much about wholesaling and would like to know:

1) How do you get the deal?

2) How do you avoid getting stuck with the property.

I am contacting the listing agent to find out more about this address.   I looked up both neighboring properties both were valued at $650,000 this is an area that has million dollar homes and is very close to the ocean.

What are the right questions to ask the listing agent?

Account Closed · Answer

Ask how much estimated demolition costs are.This is raw land with the added cost of demolition. The only possible way this is a deal is if you ask the owner if they will do owner financing and they say yes.

Amanda G. · Answer

Hi James,You are learning to get an eye for deals. From what you say, this is a deal for someone, but probably not the deal for you because you don't yet have the experience to know how much repair will cost. A good place to start is to walk through as many properties as you can, and learn from experienced people how much various repairs cost. If you start with a shell or a burnout, you will learn a lot of expensive lessons early, and they might be costly enough to take you out of the game entirely. Starting with a paint and flooring house is a gentler entry.

James Anderson · Answer

Maybe this house is too complicated but could someone talk about how they put together a deal and then flipped the deal to another investor?  And how you protect yourself from having to close on the deal?

James Anderson · Answer

Thanks everyone as I am very new I agree not the way to get started but I will be watching this one I learned it was bought for $455.000 in 2014 and the owner took it apart looking to rebuild it into a dream house but ended up moving to another state he should have left the home as it was reminds me of berlin in ww2 but he did it himself.   Tragic really.   Appreciate all your comments.

Lynnette E. · Answer

I do not know anything at all about Florida building, but just so you know, in some states like California if you leave up one wall or some part of the original structure it is counted as a rebuild and the permit costs and property taxes are a lot less.  My mom's cabin burnt down and it was a major deal to find one part of one wall that could be reused to avoid the increase in property taxes and building permit costs of a 'new' build vs a rebuild/remodel.

Wayne Brooks · Answer

A property like this likely has a host of liens from contractors, suppliers, city code violations, etc.  As with almost any listed property, no one is going to sign a contract to sell to you unless you can show the ability to buy in Your name, with your offer.  Also, mls properties have been exposed to the Whole market of buyers.....not a good bet to think you can go find a buyer who will pay more than everyone else on the market.  As mentioned, mls properties are not your target for wholesaling, as any other property on some “list” isn’t for the same reasons above.

Wil Reichard · Answer

@James Anderson This is most definitely a tear down for sure. Like @Amanda G. said, this could be a deal, but probably not for someone looking to get their feet wet with their first deal. I would not try salvaging what is left. This is a lot with some walls that need to be torn down. Good find this as this is an interesting one. It will only help you further if you keep evaluating deals like this. Best of luck!

James Anderson · Answer

Thanks Amanda, I wouldn’t be trying this to do the repairs but if I could out the deal together to flip the deal.  Put a deal together that would be attractive to someone to do all the construction.  What I need to learn is how to flip a deal without getting stuck in it.   This property is rarity for this neighborhood.

James Anderson · Answer

Thank you for the responses.  It seems like  a deal for the area its in but yes it has an agent so maybe not.  I honestly don’t know construction costs for something like this.  Wondering if any of the former house walls/structure are  worth salvaging or better to demolish all and start at zero?

Lynnette E. · Answer

If it is listed it is being marketed.  Don't try to whole sell a listed house.

Wholesaling how to not get stuck?

Most Popular Reply