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.

Sharon Vornholt I don't think you agree with me a 100% because I'm the one here saying I get way more when I list the property. True, my buyer's list has people who are so much easier to work with. I have one prop right now that two buyers from my buyer's list would have taken it $20K. But I'll sell it for closer to $40K on the MLS. I don't think giving away $15K or more is worth the ease. I do hate the whining though. And the paperwork. I like short and simple contracts; the realtor board contracts are neither. I'm sure this is market specific. There is a sweet spot pricing in my area for 3 bedroom rentals (any condition). There just isn't enough inventory for all the cash buyers wanting to get in for a certain price. My regular buy and hold cash buyer guys are all about cash flow don't pay what the market will bear. I don't blame them as I respect their buying criteria. But that doesn't mean they are the right buyer for all my properties.

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.

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

Eric Evans

Real Estate Investor · Santa Monica, CA · Member since 2012 · 11 posts · 0 votes

14y

This is a great thread! Thanks to everyone for their input. I am new to wholesaling, but as a general question, what do you need more of right now? Seller leads or cash buyer leads? Which is more sought after for wholesaling?

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Nathan Paisley

Flipper/Rehabber · Atlantic County, NJ · Member since 2012 · 514 posts · 209 votes

14y

Impo get a good buyers list, meaning drill the serious buyers for what numbers work for that individual. Then market like crazy for that inparticular buyer. Why? Because the second you DO get one under contract you know it's sold. At the same time, if you brought a deal 30-60% below market value to an investor it's pretty much sold...

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Jimmy C.

Flipper/Rehabber · Seminole, FL · Member since 2010 · 859 posts · 316 votes

14y

Does anyone know if FL allows me to list my property with an assignable contract? I need the answer before I call Keller Williams on Monday.

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Frank Iglesias

Investor · Atlanta, GA · Member since 2011 · 79 posts · 38 votes

14y

Doing straight up wholesaling and leveraging the MLS. Do both and you can have the best of both worlds. Some buyers simply don't want MLS deals whether they are good or not. So by doing both, everyone is happy.

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Ibrahim Hughes

Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes

14y

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.

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Account Closed

Involved In Real Estate · Paramus, NJ · Member since 2009 · 95 posts · 40 votes

14y

FYI net listings are illegal in NJ. Check with your own state realtor board before going this route.

The danger of listing your wholesalee deals on the MLS is that agents who are unfamiliar with your process may get in the way or become overly protective of their clients. If some buyer agents get pissed off they can report you and your listing broker to the state regulatory agency. You may be accused of practicing real estate without a license. You also can't often underprice a property and hope to attract multiple bids because some listing contracts stipulates that if a full price offer is made you will owe the listing agent a commission even if you did not accept that offer; So if a buyer comes in with an offer that matches your lowball listing price, you're toast. Plus the broker protection period and other terms favorable to brokers will be in the listing contract as well. Gotta read all the fine prints!

I agree you need both - have your own buyers list to get investor buyers and use the MLS for retail buyers who are willing to pay more for better condition. You will decide which way to go for each property.

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Will Sifert

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

14y

Originally posted by Sharon Vornholt:

@K. Marie-

I agree with you 100%. You make a much better spread just calling up a cash buyer from your buyer's list, and it's a whole lot easier. Everything gets complicated when you add the MLS, agents and extra steps. I only did that once, and unless I can't just sell a deal I probably won't do it again.

Building up a buyer's list just isn't that hard to do. And once you have some active investors with cash, it just can't be any simpler. Put the house under contract, resell it to your cash buyer and move on in 10 days or two weeks.

I think it was Ryan that said "investor buyers from the MLS end up whining like retail buyers". That is so true. Working with a Realtor that looks for deals on the MLS is how a lot of investors get started, and there is nothing wrong with that. But all new investors are inexperienced and are slow to make decisions. We were all at that stage at one time, but happily now I can choose to work with experienced investors that walk through the property and call me to say they wuill buy it.

Another thing about only working on the MLS; that's where everyone is. I much prefer to do my own marketing and not have to chase deals that a dozen other investors are chasing. There's not much competition in my world.

In regards to investors only buying from the MSL...

It's hard for me to believe that investors will buy from the MLS unless they do one of the following:

1. Really low ball every listing that has been on the market for over a year, hoping that a few people will break down and finally sell it cheap because they are frustrated and can't wait any longer. If you do several low ball offers you bound to find a couple people like this.

2. Have an agent that will contact you before the mls posting goes live on a good priced property you can negotiate substantially lower.

It just doesn't make sense to me that someone can go online and find a house that is listed in the MLS (so several other people have seen it but no one else has purchased it yet) AND it's a great deal? I'm not saying it's impossible, but it seems like those deals would be very scarce. First it has to be a deal to start with then everyone else (thousands of other agents who also have buyers they work with that they could have told about it, plus anyone else that goes to realtor.com) has to skip it till you come along. Then you buy it, put some money into it and then put it right back up on the MLS to sell it and after you pay commissions twice (buying and selling) you still going to turn a nice 20%+ profit ?

Again, I am sure it does happen, but how common is that?

The only reason I would think a real estate investor would buy off the MLS is because he didn't know where else to look (or who to work with).

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Jerry Kisasonak

OP

Residential Real Estate Agent · Mc Keesport, PA · Member since 2012 · 449 posts · 154 votes

14y

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.

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Ryan Webber

Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes

14y

Originally posted by Jerry Kisasonak:

In my market investors are buying most of their deals right off of the MLS.

I would suggest the likely possibility that there are investors buying a tremendous amount of properties in your area NOT through the MLS. Most investors/realtors familiar only with the retail side of the business have no clue about the volume that is done on the "underground" market directly between investors and homeowners. Until you break into and fully integrate into the wholesale market, there really is no way to understand the volume that is done under realtors noses.

I, myself, use to think that this fact was only true in markets like mine that didn't see the bubble, but now I've discovered underground wholesalers in major bubble markets. These are markets that most investors think you HAVE to buy via the MLS with REO's or short sales to find a deal because there aren't any equity deals left. But these wholesalers buy very little if ANY via the MLS.

Aaron Mazzrillo in Los Angeles is a great example and K. Marie Poe, too. Right in one of the biggest popped bubble markets. A market that most investors would argue with you that the only deals to be found are via the MLS with REO's and short sales.

Just because you don't know its there, doesn't mean its not happening.

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Will Sifert

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

14y

Originally posted by Jerry Kisasonak:

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.

Couple questions (as I am trying to learn as much as I can)... How can you tell from looking at the houses that sold on the MLS if it was an investor or individual that purchased it? Also, correct me if I am wrong, but if a house isn't listed in the MLS (FSBO, purchased via wholesaler etc.) then the sale wouldn't show up in any MLS data? The only way you would see those sales is if you have some type of deed fax service? Lastly, and this might be a rhetorical question but how can you know what the majority of investors in your area are doing, unless you know the majority of the investors and are privy to their deals?

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Ryan Webber

Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes

14y

Originally posted by Will Sifert:

Couple questions (as I am trying to learn as much as I can)... How can you tell from looking at the houses that sold on the MLS if it was an investor or individual that purchased it? Also, correct me if I am wrong, but if a house isn't listed in the MLS (FSBO, purchased via wholesaler etc.) then the sale wouldn't show up in any MLS data? The only way you would see those sales is if you have some type of deed fax service? Lastly, and this might be a rhetorical question but how can you know what the majority of investors in your area are doing, unless you know the majority of the investors and are privy to their deals?

I would guess Jerry Kisasonak is inferring that they are investors because the financing type showing on the sold listing is cash.

No, non-MLS sales don't show up in the MLS, but there are ways to track them via public records, and in disclosure states (which are the majority of states) you can even find or figure out the sales price.

As for how would you know what the majority of investors are doing without knowing the majority of investors? That's a good question, Will Sifert. You wouldn't know. And if you did know the majority of investors and what they were doing, that would mean you have a massive buyers list of investors. At that point why would you need to list properties on the MLS and pay realtor commissions to sell to investors that you already know? Just call the investors directly.

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Jerry Kisasonak

OP

Residential Real Estate Agent · Mc Keesport, PA · Member since 2012 · 449 posts · 154 votes

14y

Will Sifert

Q: "Couple questions (as I am trying to learn as much as I can)... How can you tell from looking at the houses that sold on the MLS if it was an investor or individual that purchased it?"
A: Will, I was looking up cash sales in my area to build up my buyer's list. When I had the cash sales list, I would look to see who was listed as the buyers for those properties. (Alot of owner-occupied homes are bought cash) If it was an LLC or some name that would indicate a company/investor sale, I would cross-reference the address with the tax records and get the buyers full company name and property tax mailing address. Additionally, I would Google the company name and address and see if I could get a phone number, facebook page, linkedin page, etc.

If I saw an individuals name come up over and over again, I assumed that this person was also an investor who wasn't buying in an LLC. I added these serial buyers to my list as well.

In any case, in my area I noticed about 4 company names that kept coming up over and over and over again. These guys are buying in serious volume off of the MLS. Yes, it is true that I don't know if they are picking up properties from other sources, but nevertheless I can tell that they are very active in snagging up listed properties.

I then started to pay attention to the list price versus sales price. I know from this data that they are firing offers out at properties well above their target price, playing the law of averages, which to them means that out of 25 offers they'll get X amount of deals.

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Jerry Kisasonak

OP

Residential Real Estate Agent · Mc Keesport, PA · Member since 2012 · 449 posts · 154 votes

14y

Ryan Webber "Just because you don't know its there, doesn't mean its not happening." (Referring to underground non-MLS deals)

You make a great point Ryan. I always respect your replies and ideas. It is true: You just don't know what you just don't know.

Fortunately, our local MLS is integrating ALL sales into the system soon. Then, as realtors, we'll be able to pull data on all sales not just MLS sales, which is really a skewed view of the actual movement of the market. I don't suspect that these underground deals will remain so for long.

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Ryan Webber

Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes

14y

Originally posted by Jerry Kisasonak:

In any case, in my area I noticed about 4 company names that kept coming up over and over and over again. These guys are buying in serious volume off of the MLS. Yes, it is true that I don't know if they are picking up properties from other sources, but nevertheless I can tell that they are very active in snagging up listed properties.

I wouldn't necessarily assume that these specific investment companies are buying in serious volume off of the MLS. My point is that there are most likely some investors in any major market who are seriously tapping into non-MLS purchasing techniques. Direct marketing to homeowners is an extremely effective way to find high equity deals, and I would not assume that there aren't plenty of serious investors in most markets that understand that fact. Trustee sales traditionally attract very serious investors too. Those sales would not show up via the MLS either.

My experience is that most investors, even experienced ones, do NOT utilize multiple buying strategies consistently. The Trustee Sale buyers buy the vast majority of their properties through the auctions. The guys that I know who buy through the MLS primarily, don't do direct marketing. The short sale guys I know only buy through short sales. I think most investors find something that works and then they get super focused on that one strategy and rarely branch out to experiment with other strategies.

Actually thinking about it, most of the investors that I know that consistently use multiple strategies are wholesalers. I'm assuming that might be because they have a strong focus on finding MORE deals as quickly and effectively as possible.

Again, my main point, Jerry, being that your statement that investors in your market are buying most of their deals from the MLS is probably not a full or accurate perspective of your market. Most realtors in my own town have no idea how much is bought by wholesalers and investors like myself. They would probably argue your same point with me in my city just because they don't interact with the wholesale market. They don't understand the underground market that goes on everyday right under their noses.

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

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

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