Much of what I hear about wholesaling is to build a buyers list and go find properties to fill those buyer's purchasing criteria. In other words, be sort of an order fulfillment company. However, 98% of property sales are right off of the MLS, and that includes investment properties. I know of alot of investors that buy all their deals right from the MLS. They get deals automatically emailed to them immediately when they come on the market, they analyze them, and submit offers... LOTS of offers! And, low and behold, they end up finding the sellers that are ready to sell cheap. As a wholesaler, it seems to me that instead of doing all the work to create your own mini-MLS marketplace by building a buyers list, websites, squeeze pages, etc, it would just be easier to tap into the MLS and list your deals there as a net listing. That way, not only will your hardcore investors see your deal (which they will put an offer in on because that's what they do... make offers all day), you will also get exposure to "John," the guy down the street who is still living at home, has a pile of cash, and wants to get out of his parents home but wants to stay local. He, of course, will be willing to pay more than an investor because he is willing to work for free... putting sweat equity into the property to make it how he wants it. Why not list your deals on the MLS and let all these potential buyers bid your property up? As a side note, I realize that this is by definition no longer wholesaling. Also, I realize it may be hard to get an agent to list homes under these conditions and timelines. I'm a realtor, so on my end, that will certainly help. I have already spoke with my local MLS, and they are okay with an agent doing deals this way, so long as they are net listings. Also, I'm not going to do these transactions in my name, I have a wholesaling LLC set up. In any case, I'll like some feedback on this subject. I'm not against building a buyers list, and in fact once I get some deals moving I plan to just call the investors before listing deals on the MLS. By why aren't other wholesalers doing business on the MLS? Why are they complicating things? Sorry I wrote a mini book here : )

We list all our wholesales on the MLS and this is how about 50% of them sell. The other 50% sell to investors we have a personal relationship with.

As a professional wholesaler with a very well established buyers list, I sell the majority of my deals with a handful of phone calls. There would be no point in listing most of them. Now I have at different times listed wholesale deals on the MLS and what I've found is I hate it. I end up getting investors that whine like retail style buyers. They want this and that fixed or tested and 30 day closings and option periods and inspections and contingencies and blah, blah, blah. With my own mini-mls, as you put it, Jerry Kisasonak, I dictate the terms. I want you to close in a week or less. There are NO contingencies. No financing addendums. No option periods. I get the earnest money directly and it is non-refundable. I pick the title agent. If you want an inspection, do it before you bring me a contract. I will fix nothing in the house. I will not pick up the piles of trash in the front yard, or the piles of clothes in the kitchen, or kill the cockroaches infesting the house. I will not replace the roof, the sewer line, or the heating and air, and I will look at you like you are stupid if you even ask me to. That is obviously why I'm selling it so cheap. Here's the price. Take it or leave it. If you don't buy it, someone else will or I will fix it up myself. I don't really care which it is. When I try to dictate these types of things with a realtor, they usually freak out and look at me like I am stupid. Wholesaling professionally is about building strong relationships with strong cash buyers, and the MLS is not needed for that, and neither are realtors. Realtors usually get in the way and complicate things. And really, why waste the time or the money anyway? Just pick up the phone and call the investor directly. It saves precious time and makes you more money. Why pay a realtor thousands of dollars to wait to see your listing, research it enough to pass it on, set up an appointment, show it, write up a bloated contract, blah blah blah. Do the work yourself. Build the relationship with the investor directly and make thousands of dollars more on every transaction. That seems like a no-brainer to me. Now when you are actively building your buyers list, I can see the advantage of doing any and every type of marketing to buyers that you can, including the MLS. But thinking that any one marketing strategy is the end all, golden path to riches and enlightenment, is really a short walk to a small bank account. My best buyers rarely buy anything off of the MLS. If I was utilizling the MLS as my main marketing tool to buyers, my business would suck. Obviously each market is different, but my best advice is to consistently and persistently build and work multiple systems of finding deals and of finding buyers. Sure, use the MLS, along with everything else you can think of to find buyers (websites, squeeze pages, ads, networking, research, etc).

Jerry Kisasonak I close on what I buy before I offer it for sale, and have for serveral years. I have my own funds and I have private money funds. I've also used hard money lenders many times. It works just like any other loan. Borrow the money, use the property as collateral. Sell the property, pay off the lender. I've used hard money as little as 5 days. There are some interesting threads here on BP that discuss/debate what wholesaling really means. Many investors, especially newbies, think it means getting a property under contract and assigning your contract or double closing, thereby using none of your own funds. Others think that you are a wholesaler if you aren't the end user of the property. (But is a rehabber the end user?) Ryan Webber holds that wholesaling means selling for a wholesale price, regardless of how the property is purchased and re-sold. I call some of the deals I do wholesaling in order to differentiate them from rehab resales. But I'm not a wholesaler. I don't for a second think I owe rehabbers or landlord buyers any particular discount or price points or potential profit. I do my best to sell everything for what the market will bear. Doesn't matter if it's a pretty house or a major fixer. Doesn't matter what I paid for it. It's up to the buyer to negotiate and buy for a price that makes sense for their purposes.

Ryan Webber No such thing as unarguable reason. You can argue with anything, or least I can. After all that I said above about selling as-is, I have an email this morning from the buyer. He has come up with some lame hearsay information about the sewer line and is requesting a seller concession of $1K. The answer is no. (If it really was sewer line issue, the number wouldn't be $1K). But I can stand to be a little annoyed for an extra $15K. Just try listing one and see what happens. Can't wait to hear how it goes.

Ryan Webber I'm guessing your market/farm in TX is similar to mine in CA's Central Valley. So, I'm curious if you've looked into using the MLS more recently. There tons of cash buyers out there right now for properties with low entry prices (especially under $50K) and low inventory. When listing the props, I'm having none of the issues with agents and buyers that you mention. The agents are bringing experienced investor buyers who expect to buy as-is, with none of those crazy retail demands. Granted, they don't write the offer with a no financing contingency and a non-refundable deposit. I counter with that, and it's deal breaker if they say no. These buyers pay more than my buyer's list. Way more. My buyer's list has many local buy and hold guys who stop playing when the prices don't allow great cash flow from the get-go. But there are hundreds of other buyers that have different requirements when buying. They have buyer's agents and the way to reach them is the MLS. I can't help but think your market is the same. I closed on a property last week. In the hood, with abandoned auto, and known squatter with entitlement issues. And full of junk. An agent brought me an offer from a buyer to take that property totally as-is, with squatter, junk and auto. I usually clear properties of junk and do evictions because I think I get a better price with an empty property. It's also necessary to clear title as abatement liens aren't released until the property passes a re-inspection. I'd say these are different times when an agent brings a buyer to a deal like this.

I wholesale in several different markets, each market is different far as wholesaling on the MLS. The way that I'm able to list properties on the MLS that I have under contract is by working with a broker who understands the process. He allows me to get a property under contract and he will flat list it on MLS. For my local market where I will be licensed soon, I work with a realtor who list the properties for me, what I do is contract the property with the seller letting them know that I will purchase their property for X amount then I go list it on MLS for a 20k mark up with 2-5k going to the selling agent and buyers cover all closing cost. It's more working parts to things but in short, it can be done you just have to deal with an investor friendly broker. Far as having a buyers list, my buyers list consist of agents that represented cash buyers in a transaction. I have my assistant call all the agents that sold properties around my subject property for cash and I offer them a fee for bringing me a buyer. Works well and plus you can pay agents far less than you would pay a wholesaler for bringing you a buyer.

Jerry Kisasonak Be careful about your assumption that a contract that gives you "equitable interest" allows you to list on the MLS. Technically, you can only sell your contract since you don't own the property. The MLS isn't set up to sell contracts. There may be some allowance in the commercial section, where businesses are bought and sold. That equitable interest thing is a legal argument in contract law. It doesn't necessarily give you any rights. There is the issue of transparency as well. Most buyers unless they understand assignments or double closes, are going to be confused when the title report comes back with someone else as the owner. It opens up the deal to doubts and concerns by the buyer. And as J Scott says, your local MLS rules may prohibit it. I know people who list props they don't own in my farms, but I'm not sure they are in compliance with the MLS rules. Flat fee listing services are often subscribers to many different MLS. Hard to say if they are following the rules for each region. You'll definitely hear people say that it's done and can be done. I've yet to see it outlined where it's actually allowed. Just something to think about.

Will Sifert In my market investors are buying most of their deals right off of the MLS. To the average guy, there are times where there may not seem to be too many deals on MLS in a given area. What seperates the investor from the average Joe is that the investors [/u]create deals where no deals seemingly exist. In other words, they ignore the list price and submit offers anyway. This is supported by MLS data. If I look over the recent solds in my area, almost all of the investor purchased homes were listed substantially higher than the actual price they sold for. To boot, some of these properties didn't sit on the for long. The DOM (days on market) for alot of them is under 30 days. I don't know why a seller would have a list price in mind and then cut the price by 50% right away, but it happens. I suppose they see the $$$ signs and just jump at it. Investors understand that if you do something often enough you'll get a ratio of results, and they just play on the law of averages. Make 20 offers, get 1 deal. Want 5 deals, make 100 offers. Of course, if this is your strategy you just need a system in place for getting out alot of offers out consistently.

I'd say that it depends on your market. Here, we're experiencing a hot seller's market in many areas. Find a real 'deal' and the buyers will certainly find you. No use running around with a list of hot buyers and you can't find a deal. You risk looking like an amateur. Nothing wrong with being one, but you want to be an amateur with a hot deal for rehabbers.

Build a Buyers List!!! Really? What about the MLS?

Will Sifert

Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes

14y

Originally posted by Jerry Kisasonak:

J Scott
Thanks. I wasn't planning on getting a property under contract that's currently listed on the MLS and then relist it before the original listing closes. I don't think you can do that anywhere, because you essentially would have the same property listed twice on the MLS at the same time. I'm planning on getting deals by other means, like direct mail, bandit signs, craigslist, etc.

By tying up deals that way (FSBO's), I will be able to immediately list them on the MLS because I have an equitable interest in the property, which grants me the right to market and sell the property if I so choose. I guess to be more specific, if I sell the property I'd do so by double closing, and if I sell the contract I'll just do so by way of assignment.

If I had the cash on hand, I would just do things the way you are. And I know what you mean about REO being very poorly marketed. The listing agents certainly don't put much thought or time into trying to bring the property's best features to the foreground. Under the "comments" section on the listing they should just put "No comment."

That's kind of funny that you can just repackage it and resell it for more almost immediately. Kuddos to you : )

When you do one curious to see how that turns out, please come back and share the info with us. Thanks.

Build a Buyers List!!! Really? What about the MLS?

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