Creating Wholesaling Deals

48 Replies

So I'm in the learning phase of REI and want to start taking some action. I know I want to have buy and hold multi-unit properties but been a little confused what I should start with since I haven't had any experience. From my research Wholesaling would be a way to get in and learn hands on. Getting acclimated with analyzing deals and getting comfortable with communicating it. From my understanding once I find a motivated seller and put the property under contract, than I find a investor to purchase it and I make whatever I put the assignment fee for. If that's correct? I've been searching on different sites for properties but all are listed properties. What other way am I able to locate un-listed properties? Where can I locate and learn how to fill out the contract? How do I approach the seller advising I'm wanting to purchase the property but I'm actually not the one purchasing it? How do I guaranteed to find someone to assign the contract to? Do I need an attorney? Thank you all for your time that I value and looking forward to reading your responses.

First off, you would be better served having buyers lined up and their criteria before you start shopping for deals.

As to the rest of your questions, I suggest doing a search for each right here on BP. All of those questions have been asked and answered numerous times throughout this site.

Get your education first, starting here and add local real estate meet ups to meet others doing what you want to do.

@McCall Russell  

First step is to make sure you understand the laws in your area regarding wholesaling. While wholesaling is legal in most states, several states have passed laws defining wholesaling as brokering and are requiring a real estate license to wholesale property. If you are considering staying in this business long term I recommend getting your license. This will elevate your stature as a professional and open up a lot more opportunities for you to monetize deals you can’t buy or wholesale.

You should talk to a real estate attorney that works with investors in your area to ensure you are in compliance with any laws. They will also have the proper contracts as well.

Next you need to educate yourself on the business and your market. You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

As @Will Barnard mentioned start with finding cash buyers. You want professional legitimate cash buyers so you know you can close on the deal and do what you tell the seller you will do. I can’t emphasize this point enough. You do not want to contract a property unless you know you have a buyer who can close it or take it down yourself.

Different types of cash buyers are flippers, buy and hold, subject to and lease option. You need to find several of each of these types of buyers and learn what they are looking for. You will learn a lot about the business and the market by talking with cash buyers.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups, Realtors, title companies, closing attorneys, property management companies, auctions, Craigslist, google search, billboards and bandit signs. Some companies also run TV and Radio ads.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties with cash. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase. You can also buy lists from companies like list source and there are some REI software companies that have a cash buyer search feature.

Some of best ways to find motivated sellers is to purchase lists from companies like listsource and or compile lists from city and county like 60-90-120 days late on mortgage, pre-foreclosure, delinquent taxes, water cutoff, code violation, probate, divorce, etc. Then you can mail or cold call or both.

Other cheap or free methods are driving for dollars, craigslist, Realtors, FSBO sites, expired listings, foreclosure sites and bandit signs if allowed.

If you have the funds you can use billboards, newspaper ads, other offline publications., TV commercials, radio ads, motivated seller websites, SEO, pay per click/adwords, facebook, Linkedin, Youtube, and other forms of online advertising and boosted/promoted social media postings.

Bottom line is integrity and consistency. You need to do what you say you will do and take consistent focused action every day, answer the phone when it rings and follow up and follow through.

Originally posted by @McCall Russell :

So I'm in the learning phase of REI and want to start taking some action. I know I want to have buy and hold multi-unit properties but been a little confused what I should start with since I haven't had any experience. From my research Wholesaling would be a way to get in and learn hands on. Getting acclimated with analyzing deals and getting comfortable with communicating it. From my understanding once I find a motivated seller and put the property under contract, than I find a investor to purchase it and I make whatever I put the assignment fee for. If that's correct? I've been searching on different sites for properties but all are listed properties. What other way am I able to locate un-listed properties? Where can I locate and learn how to fill out the contract? How do I approach the seller advising I'm wanting to purchase the property but I'm actually not the one purchasing it? How do I guaranteed to find someone to assign the contract to? Do I need an attorney? Thank you all for your time that I value and looking forward to reading your responses.

 How do you approach a seller advising that you will purchase it when you are not? That is called FRAUD. Ever wonder why so many unlicensed brokers develop a horrible reputation? See the first sentence in my response. I do my best on BP to educated readers about operators like yourself. 

I've heard Real Estate expert wholesaler Nick L.,say, that the wholesaler,is the middleman or woman, between the Seller and the Buyer, and they earn the difference  . I can't wait to learn to operate this simple method - and earn thousands of dollars in one deal.

Originally posted by @Will Barnard :

First off, you would be better served having buyers lined up and their criteria before you start shopping for deals.

As to the rest of your questions, I suggest doing a search for each right here on BP. All of those questions have been asked and answered numerous times throughout this site.

Get your education first, starting here and add local real estate meet ups to meet others doing what you want to do.

I have to respectfully disagree. New wholesalers calling buyers for their criteria is a waste of both parties time. Find a deal, then reverse engineer who buys that type of deal and contact them with that deal in hand. Wholesalers must market for motivated sellers, then find the buyer for that deal. Buyers are a dime a dozen, if you have a deal they will take your call and get you an offer fast. No deal, no check. Eyes on the prize. 

@John Thedford Think you misunderstood my question. From what I know about in Wholesaling, you get a property under contract but I myself are not actually putting in the funds to purchase it. I assign it to someone that will. My question was basically how do I get the seller to sign a contract when I am not the one putting in the funds. Do I disclose that I'm a Wholesaler and that I will find a buyer purchase the property? FRAUD is NOT in my DNA. :)

Originally posted by @Tim G. :
Originally posted by @Will Barnard:

First off, you would be better served having buyers lined up and their criteria before you start shopping for deals.

As to the rest of your questions, I suggest doing a search for each right here on BP. All of those questions have been asked and answered numerous times throughout this site.

Get your education first, starting here and add local real estate meet ups to meet others doing what you want to do.

I have to respectfully disagree. New wholesalers calling buyers for their criteria is a waste of both parties time. Find a deal, then reverse engineer who buys that type of deal and contact them with that deal in hand. Wholesalers must market for motivated sellers, then find the buyer for that deal. Buyers are a dime a dozen, if you have a deal they will take your call and get you an offer fast. No deal, no check. Eyes on the prize. 

 You are certainly entitled to disagree and have your own opinion, just know that this topic has been debated at nauseam over the years between myself and many others. Readers should take note that most of those debaters are not around and most do not have my experience. That said, my point in this debate over and over is that there is zero downside to having your buyers lined up first and knowing their criteria, yet there are downsides to not having them lined up first. Second, we are not just talking about new wholesalers, but even in that case, any wholesaler coming to me and asking for my criteria is going to get it, it takes me only seconds to provide that and I add info to them that if they send me junk nowhere near what I have given them as criteria, they will be blocked from emailing me in the future. It is simple to provide the info to them and simple to remove me from their lists when they prove to be worthless.

Everybody argues that if you have a real deal with a big spread, then buyers will flock to you. I don't find that to be true or common since it is very difficult to find a good deal, especially for a newbie wholesaler which is why most of what I get from them is junk. Had they taken the time to ask for criteria or better understand my format and needs, they would do so much better and worst case, at least learn something from an experienced pro.

As soon as someone can come up with a legit argument for getting the deal first over the buyer first, I am all ears, yet to hear one in well over a decade from anyone.

Originally posted by @Will Barnard :
Originally posted by @Tim G.:
Originally posted by @Will Barnard:

First off, you would be better served having buyers lined up and their criteria before you start shopping for deals.

As to the rest of your questions, I suggest doing a search for each right here on BP. All of those questions have been asked and answered numerous times throughout this site.

Get your education first, starting here and add local real estate meet ups to meet others doing what you want to do.

I have to respectfully disagree. New wholesalers calling buyers for their criteria is a waste of both parties time. Find a deal, then reverse engineer who buys that type of deal and contact them with that deal in hand. Wholesalers must market for motivated sellers, then find the buyer for that deal. Buyers are a dime a dozen, if you have a deal they will take your call and get you an offer fast. No deal, no check. Eyes on the prize. 

 You are certainly entitled to disagree and have your own opinion, just know that this topic has been debated at nauseam over the years between myself and many others. Readers should take note that most of those debaters are not around and most do not have my experience. That said, my point in this debate over and over is that there is zero downside to having your buyers lined up first and knowing their criteria, yet there are downsides to not having them lined up first. Second, we are not just talking about new wholesalers, but even in that case, any wholesaler coming to me and asking for my criteria is going to get it, it takes me only seconds to provide that and I add info to them that if they send me junk nowhere near what I have given them as criteria, they will be blocked from emailing me in the future. It is simple to provide the info to them and simple to remove me from their lists when they prove to be worthless.

Everybody argues that if you have a real deal with a big spread, then buyers will flock to you. I don't find that to be true or common since it is very difficult to find a good deal, especially for a newbie wholesaler which is why most of what I get from them is junk. Had they taken the time to ask for criteria or better understand my format and needs, they would do so much better and worst case, at least learn something from an experienced pro.

As soon as someone can come up with a legit argument for getting the deal first over the buyer first, I am all ears, yet to hear one in well over a decade from anyone.

First of all, the topic of this thread is creating wholesale deals. My focus is there. Creating deals. Not building a buyers list. 

My experience as a full time wholesaler for the last seven years in Southern California is the experience I rely on when I make that statement. You are right there is zero downside, but there is no upside. You have a rolodex of buyers saying yes bring me a deal I'll buy it. You don't even know if these folks are serious buyers, you have no data or proof that they in fact can perform. Most importantly you are no closer to having a deal. 

There are simple proven ways to build buyers lists based on sales data in the target market. It allows someone to use data to know who is buying, what they are buying and how frequently they are buying. I put zero effort into finding a buyer until I have a deal, then I reverse engineer who is buying that type of deal for the highest price and contact them. It seems to work, I'm one of the few still in business wholesaling in Socal.  

I understand you are well informed on the topic of real estate investing and please correct me if I'm wrong, but I don't believe wholesaling real estate is or has been a focus of your business. This is my expertise, I have the resume to back it up. The posts on the wholesaling forum of BP are answers often given by well informed investors who understand the mechanics of wholesaling but do not actively focus on wholesaling for their business and it shows. 


@McCall Russell I think you will find that this is not the place to come to learn about or even discuss wholesaling. 

But I think you can see the concern. Some bright RE investor guy named Mark goes out and puts a house under contract. He 'thinks' he's got a buyer or two that will be interested, and he truly believes that he has a good estimate on the ARV of the house and the cost of the renovation to get that house to that number. He even tells the seller what he is doing. Hell, he even gets the seller to sign a disclosure that they are aware of what is going on -- I mean, he does everything in earnest.

Except Mark doesn't have the ability to close.  And so what then?  What happens when he cannot assign that paper to a buyer?  The seller still gets hurt even with all the best of intentions.  And Mark finds himself in the unenviable position of having to back out of a contract that he was never really able to perform anyway.  Mark then realizes that he has opened himself up in terms of legal liability, and worse, he just feels like heck about putting this seller in a bad spot.  Don't be Mark.

The simple answer here is just go buy houses.  Figure out the funding aspect of it.  Network.  Partner up, use hard money, get a loan from your $401K at work, do whatever it takes.  Just don't depend on cash buyers to close.  This is like getting the stars and the planets to line up.  Sure, they will present themselves and you might be to assign a deal or two here and there, but just make sure you are buying that house, full-stop.  As far as regular contingencies, those should be rare - like something totally unforeseen came up during an inspection -- then yeah, that is what those clauses are for.

Wholesaling is really, really, really hard.  It takes a lot of skill, at marketing, at negotiation, at everything.  And you have to have a good handle on renovation costs and valuations -- its rare that anybody ever really gets good at all this, and even more rare that people get really good at this having never renovated a house before themselves.

Purely my opinion, and sure, there is probably some limiting beliefs here -- but I honestly feel this way.  I think it is actually easier to work in teams to simply go buy these houses (master the financing and the renovation end of this) than it is try to hustle contracts as a wholesaler.  No doubt I'll get some argument on that, but that I can live with.

Originally posted by @Tim G. :
Originally posted by @Will Barnard:
Originally posted by @Tim G.:
Originally posted by @Will Barnard:

First off, you would be better served having buyers lined up and their criteria before you start shopping for deals.

As to the rest of your questions, I suggest doing a search for each right here on BP. All of those questions have been asked and answered numerous times throughout this site.

Get your education first, starting here and add local real estate meet ups to meet others doing what you want to do.

I have to respectfully disagree. New wholesalers calling buyers for their criteria is a waste of both parties time. Find a deal, then reverse engineer who buys that type of deal and contact them with that deal in hand. Wholesalers must market for motivated sellers, then find the buyer for that deal. Buyers are a dime a dozen, if you have a deal they will take your call and get you an offer fast. No deal, no check. Eyes on the prize. 

 You are certainly entitled to disagree and have your own opinion, just know that this topic has been debated at nauseam over the years between myself and many others. Readers should take note that most of those debaters are not around and most do not have my experience. That said, my point in this debate over and over is that there is zero downside to having your buyers lined up first and knowing their criteria, yet there are downsides to not having them lined up first. Second, we are not just talking about new wholesalers, but even in that case, any wholesaler coming to me and asking for my criteria is going to get it, it takes me only seconds to provide that and I add info to them that if they send me junk nowhere near what I have given them as criteria, they will be blocked from emailing me in the future. It is simple to provide the info to them and simple to remove me from their lists when they prove to be worthless.

Everybody argues that if you have a real deal with a big spread, then buyers will flock to you. I don't find that to be true or common since it is very difficult to find a good deal, especially for a newbie wholesaler which is why most of what I get from them is junk. Had they taken the time to ask for criteria or better understand my format and needs, they would do so much better and worst case, at least learn something from an experienced pro.

As soon as someone can come up with a legit argument for getting the deal first over the buyer first, I am all ears, yet to hear one in well over a decade from anyone.

First of all, the topic of this thread is creating wholesale deals. My focus is there. Creating deals. Not building a buyers list. 

My experience as a full time wholesaler for the last seven years in Southern California is the experience I rely on when I make that statement. You are right there is zero downside, but there is no upside. You have a rolodex of buyers saying yes bring me a deal I'll buy it. You don't even know if these folks are serious buyers, you have no data or proof that they in fact can perform. Most importantly you are no closer to having a deal. 

There are simple proven ways to build buyers lists based on sales data in the target market. It allows someone to use data to know who is buying, what they are buying and how frequently they are buying. I put zero effort into finding a buyer until I have a deal, then I reverse engineer who is buying that type of deal for the highest price and contact them. It seems to work, I'm one of the few still in business wholesaling in Socal.  

I understand you are well informed on the topic of real estate investing and please correct me if I'm wrong, but I don't believe wholesaling real estate is or has been a focus of your business. This is my expertise, I have the resume to back it up. The posts on the wholesaling forum of BP are answers often given by well informed investors who understand the mechanics of wholesaling but do not actively focus on wholesaling for their business and it shows. 

I appreciate the debate Tim and for the record, I am fully aware of your history as you are one of the few still around here who continues to perform. That said, while wholesaling has never been my focus, I have done my fair share of wholesaling and in all cases, I did it the right and legal way, never assigned a contract and in the event I did not find a buyer, I closed on the deal myself. That is a huge distinction between those of us who do it legally and morally and those who don not.

To touch on a few things you mentioned above, part of the topic discussion of creating wholesale deals IS having a buyer to purchase it so I think we are on a relevant topic with our debate. Second, for the rolodex comment, I think you missed my point above that any wholesaler, new or seasoned, has the easy ability to check and double check a potential buyers ability to perform through any of the avenues you and I have mentioned above so I don't see any argument there.

Lastly, as far as your comment of no upside, that is where I disagree and I will repeat my answers as to why: Having a preset buyer allows the wholesaler to be in the strongest bargaining and negotiating position possible, it allows the wholesaler more avenues to perform the transaction legally and ethically - with a preset buyer, wholesaler may form a trust or entity and have their preset buyer as the buyer right off the bat, no need to assign, illegally market (if you are not licensed), etc, and it allows the seller to not have as much risk of the deal falling apart because the wholesaler could not find a buyer.

I will argue that the reason you are successful this long while others are not is because you know your market, you know how to properly calculate rehab and exit values and you likely have a solid and proven buyers list to go to, hence your own performance proves my point. There are upsides to having the buyers first and no downside. There are downsides to not having a buyer first.

 

Originally posted by @Mark Sewell:

@McCall Russell I think you will find that this is not the place to come to learn about or even discuss wholesaling. 

With the exception of this line, loved your post and voted it up.

Why do you believe this is not the place to discuss or learn about wholesaling? I think it is the very best place to learn and talk about it, where else can a newbie learn from pros on what to do and what not to do? In fact, this thread I started on the topic is the longest running, most voted thread in history of BP and has literally helped thousands learn some of the ropes to this strategy.
https://www.biggerpockets.com/forums/93/topics/58383-the-truth-about-wholesaling-


Originally posted by @Will Barnard :
Originally posted by @Tim G.:
Originally posted by @Will Barnard:
Originally posted by @Tim G.:
Originally posted by @Will Barnard:

First off, you would be better served having buyers lined up and their criteria before you start shopping for deals.

As to the rest of your questions, I suggest doing a search for each right here on BP. All of those questions have been asked and answered numerous times throughout this site.

Get your education first, starting here and add local real estate meet ups to meet others doing what you want to do.

I have to respectfully disagree. New wholesalers calling buyers for their criteria is a waste of both parties time. Find a deal, then reverse engineer who buys that type of deal and contact them with that deal in hand. Wholesalers must market for motivated sellers, then find the buyer for that deal. Buyers are a dime a dozen, if you have a deal they will take your call and get you an offer fast. No deal, no check. Eyes on the prize. 

 You are certainly entitled to disagree and have your own opinion, just know that this topic has been debated at nauseam over the years between myself and many others. Readers should take note that most of those debaters are not around and most do not have my experience. That said, my point in this debate over and over is that there is zero downside to having your buyers lined up first and knowing their criteria, yet there are downsides to not having them lined up first. Second, we are not just talking about new wholesalers, but even in that case, any wholesaler coming to me and asking for my criteria is going to get it, it takes me only seconds to provide that and I add info to them that if they send me junk nowhere near what I have given them as criteria, they will be blocked from emailing me in the future. It is simple to provide the info to them and simple to remove me from their lists when they prove to be worthless.

Everybody argues that if you have a real deal with a big spread, then buyers will flock to you. I don't find that to be true or common since it is very difficult to find a good deal, especially for a newbie wholesaler which is why most of what I get from them is junk. Had they taken the time to ask for criteria or better understand my format and needs, they would do so much better and worst case, at least learn something from an experienced pro.

As soon as someone can come up with a legit argument for getting the deal first over the buyer first, I am all ears, yet to hear one in well over a decade from anyone.

First of all, the topic of this thread is creating wholesale deals. My focus is there. Creating deals. Not building a buyers list. 

My experience as a full time wholesaler for the last seven years in Southern California is the experience I rely on when I make that statement. You are right there is zero downside, but there is no upside. You have a rolodex of buyers saying yes bring me a deal I'll buy it. You don't even know if these folks are serious buyers, you have no data or proof that they in fact can perform. Most importantly you are no closer to having a deal. 

There are simple proven ways to build buyers lists based on sales data in the target market. It allows someone to use data to know who is buying, what they are buying and how frequently they are buying. I put zero effort into finding a buyer until I have a deal, then I reverse engineer who is buying that type of deal for the highest price and contact them. It seems to work, I'm one of the few still in business wholesaling in Socal.  

I understand you are well informed on the topic of real estate investing and please correct me if I'm wrong, but I don't believe wholesaling real estate is or has been a focus of your business. This is my expertise, I have the resume to back it up. The posts on the wholesaling forum of BP are answers often given by well informed investors who understand the mechanics of wholesaling but do not actively focus on wholesaling for their business and it shows. 

I appreciate the debate Tim and for the record, I am fully aware of your history as you are one of the few still around here who continues to perform. That said, while wholesaling has never been my focus, I have done my fair share of wholesaling and in all cases, I did it the right and legal way, never assigned a contract and in the event I did not find a buyer, I closed on the deal myself. That is a huge distinction between those of us who do it legally and morally and those who don not.

To touch on a few things you mentioned above, part of the topic discussion of creating wholesale deals IS having a buyer to purchase it so I think we are on a relevant topic with our debate. Second, for the rolodex comment, I think you missed my point above that any wholesaler, new or seasoned, has the easy ability to check and double check a potential buyers ability to perform through any of the avenues you and I have mentioned above so I don't see any argument there.

Lastly, as far as your comment of no upside, that is where I disagree and I will repeat my answers as to why: Having a preset buyer allows the wholesaler to be in the strongest bargaining and negotiating position possible, it allows the wholesaler more avenues to perform the transaction legally and ethically - with a preset buyer, wholesaler may form a trust or entity and have their preset buyer as the buyer right off the bat, no need to assign, illegally market (if you are not licensed), etc, and it allows the seller to not have as much risk of the deal falling apart because the wholesaler could not find a buyer.

I will argue that the reason you are successful this long while others are not is because you know your market, you know how to properly calculate rehab and exit values and you likely have a solid and proven buyers list to go to, hence your own performance proves my point. There are upsides to having the buyers first and no downside. There are downsides to not having a buyer first.

 

I commend you for your approach to wholesaling, the right and legal way. But if you took ownership of a home then sold it to someone else. You didn't wholesale it. You bought a house and sold it for a profit. While you can have the moral high ground, it also means you're giving advice on something you've not done before. 

I have a buyers list of over 1000 people (developed from my website) and I never use it, I'd guess maybe 70 of them a real buyers in my market. Maybe 10 buy at a margin that is profitable for me. So to spend all that time hustling up a list when a fraction of them can perform at the margin needed to make the deal possible. Sure, you can do it. But its one of the most unproductive uses of ones time when starting out in wholesaling. The list has a higher value as a source for private money than anything, but this topic is about creating deals. 

A recent deal for example. Seller contacts me via my website. They have a mobile home fixer they want to sell. No clue who would want this deal. But I know how to figure out who does. So I look at the sales data for that area and find the agent who has sold the most mobile homes in that community and call them. They have a buyer, we come to an agreement, lock the deal up and go to escrow. 

That to me is productive use of time, building my list for the potential buyer of a mobile home on the off chance I get that lead is not effective. Once I have a hot lead, then the 20 minutes to research who is top dog in that arena is time well spent, line up the preset buyer and go. But not until there is a hot lead in hand. 

That is why I am successful in my market, because I ignore the advice given on websites about wholesaling. Because in most cases, its wrong.

 

Originally posted by @Tim G.:
Originally posted by @Will Barnard:
Originally posted by @Tim G.:
Originally posted by @Will Barnard:
Originally posted by @Tim G.:
Originally posted by @Will Barnard:

I commend you for your approach to wholesaling, the right and legal way. But if you took ownership of a home then sold it to someone else. You didn't wholesale it. You bought a house and sold it for a profit. While you can have the moral high ground, it also means you're giving advice on something you've not done before. Where does it say this is not wholesaling? Many wholesalers use double closings to wholesale instead of assignments, they own the home for a day or two then sell again. It is still wholesaling no matter how you slice it. Plus, the ouline of my deals from above I never took ownership, I simply had the buyer in hand, had the seller in hand, and a contract in hand which I simply named my buyer as the buyer in the trust or sold the entity shares to them. It was certainly a wholesale transaction.

I have a buyers list of over 1000 people (developed from my website) and I never use it,This is exactly my point and you keep proving it, yet arguing with me. I stated to find just a few proven buyer who can perform and go get a deal. I'd guess maybe 70 of them a real buyers in my market. Maybe 10 buy at a margin that is profitable for me. So to spend all that time hustling up a list when a fraction of them can perform at the margin needed to make the deal possible. Sure, you can do it. But its one of the most unproductive uses of ones time when starting out in wholesaling. The list has a higher value as a source for private money than anything, but this topic is about creating deals. 

A recent deal for example. Seller contacts me via my website. They have a mobile home fixer they want to sell. No clue who would want this deal. But I know how to figure out who does. So I look at the sales data for that area and find the agent who has sold the most mobile homes in that community and call them. They have a buyer, we come to an agreement, lock the deal up and go to escrow. I agree, that is certainly a viable strategy and means to perform a wholesale deal.

That to me is productive use of time, building my list for the potential buyer of a mobile home on the off chance I get that lead is not effective. You are using an example of a one off deal that is certainly not the nrom to prove your point which I don't believe is valid. I would venture to guess that most of your wholesale deals are bread and butter single family homes. SO if you know you have 2-10 (or in your case, 75) buyers looking for similar - and you know this because you checked their history, you already know that you have a buyer when you find a seller for that SFR. Once I have a hot lead, then the 20 minutes to research who is top dog in that arena is time well spent, line up the preset buyer Pre-set buyer, all this time you have said you don't recommend having preset buyers rather find the deal , then the buyer, this portion contradicts what you have been stating. and go. But not until there is a hot lead in hand. 

That is why I am successful in my market, because I ignore the advice given on websites about wholesaling. Because in most cases, its wrong. I will agree that most advice on wholesaling is misguided to say the least on the forums but not all.

Thanks again for the debate, having fun and hopefully others are learning.

 

 

@Will Barnard I think you know what I am mean.  This forum is known to be tolerant at best with respect to wholesaling, and I would even call it borderline hostile.

It's illegal.  Its fraud.  You know the litany.  It's not a knock on BP, but this place is broker-realtor land.  It just is, and if you are going to hang out here, you need to realize that this pretty much their living room.  I just ignore it - but then I'm not a huge proponent of wholesaling either, at least not for newer investors.

Are there real professional wholesalers that hang around here on BP?  Sure, there are some, I suppose.  Heck, there are lot of realtors that assign deals from time to time. But see, they are realtors, with a license, so... you know, they wouldn't lack integrity.

I will say this - you CAN come here and talk freely about lead generation, and marketing and systems and automation and outsourcing and negotiating and all the relevant aspects of wholesaling.  There is a LOT of knowledge helpful folks here that can talk and add value on all those topics.  But if I were an aspiring wholesaler, I would not feel all that welcome here.

@McCall Russel

I can bet big bucks @John Thedford didn’t misunderstand you. I think wholesaling has a place, tried landlords needing to get off dead assets in the rust belt like my area, but if you tell someone something like you’ll buy their house, but have no means to do so that is fraud as @John Thedford said. I mean what else is signing a contract saying something with no intention or means of doing that something called then?

The people I see do it right are totally transparent. “I’m am reselling you’re house for a profit” is right in the contract. Plain and bold. “You are netting less money for the convenience of not thinking or using effort.” If these lines are transparent to the seller and they know the deal great. Wholesale all day. Just don’t tell a new widow their house is worth $100k when it’s really worth $150k and she could really use the money to pay for the funeral service like I’ve personally seen.

Originally posted by @Mark Sewell :

@Will Barnard I think you know what I am mean.  This forum is known to be tolerant at best with respect to wholesaling, and I would even call it borderline hostile.

It's illegal.  Its fraud.  You know the litany.  It's not a knock on BP, but this place is broker-realtor land.  It just is, and if you are going to hang out here, you need to realize that this pretty much their living room.  I just ignore it - but then I'm not a huge proponent of wholesaling either, at least not for newer investors.

Are there real professional wholesalers that hang around here on BP?  Sure, there are some, I suppose.  Heck, there are lot of realtors that assign deals from time to time. But see, they are realtors, with a license, so... you know, they wouldn't lack integrity.

I will say this - you CAN come here and talk freely about lead generation, and marketing and systems and automation and outsourcing and negotiating and all the relevant aspects of wholesaling.  There is a LOT of knowledge helpful folks here that can talk and add value on all those topics.  But if I were an aspiring wholesaler, I would not feel all that welcome here.

You are correct, and suspect many of the responses here are aimed at purposely misinforming would be wholesalers as a means of discouragement. 

 

Originally posted by @Will Barnard :
Originally posted by @Tim G.:
Originally posted by @Will Barnard:
Originally posted by @Tim G.:
Originally posted by @Will Barnard:
Originally posted by @Tim G.:
Originally posted by @Will Barnard:

I commend you for your approach to wholesaling, the right and legal way. But if you took ownership of a home then sold it to someone else. You didn't wholesale it. You bought a house and sold it for a profit. While you can have the moral high ground, it also means you're giving advice on something you've not done before. Where does it say this is not wholesaling? Many wholesalers use double closings to wholesale instead of assignments, they own the home for a day or two then sell again. It is still wholesaling no matter how you slice it. Plus, the ouline of my deals from above I never took ownership, I simply had the buyer in hand, had the seller in hand, and a contract in hand which I simply named my buyer as the buyer in the trust or sold the entity shares to them. It was certainly a wholesale transaction.

I have a buyers list of over 1000 people (developed from my website) and I never use it,This is exactly my point and you keep proving it, yet arguing with me. I stated to find just a few proven buyer swho can perform and go get a deal. I'd guess maybe 70 of them a real buyers in my market. Maybe 10 buy at a margin that is profitable for me. So to spend all that time hustling up a list when a fraction of them can perform at the margin needed to make the deal possible. Sure, you can do it. But its one of the most unproductive uses of ones time when starting out in wholesaling. The list has a higher value as a source for private money than anything, but this topic is about creating deals. 

A recent deal for example. Seller contacts me via my website. They have a mobile home fixer they want to sell. No clue who would want this deal. But I know how to figure out who does. So I look at the sales data for that area and find the agent who has sold the most mobile homes in that community and call them. They have a buyer, we come to an agreement, lock the deal up and go to escrow. I agree, that is certainly a viable strategy and means to perform a wholesale deal.

That to me is productive use of time, building my list for the potential buyer of a mobile home on the off chance I get that lead is not effective. You are using an example of a one off deal that is certainly not the nrom to prove your point which I don't believe is valid. I would venture to guess that most of your wholesale deals are bread and butter single family homes. SO if you know you have 2-10 (or in your case, 75) buyers looking for similar - and you know this because you checked their history, you already know that you have a buyer when you find a seller for that SFR. Once I have a hot lead, then the 20 minutes to research who is top dog in that arena is time well spent, line up the preset buyer Pre-set buyer, all this time you have said you don't recommend having preset buyers rather find the deal , then the buyer, this portion contradicts what you have been stating. and go. But not until there is a hot lead in hand. 

That is why I am successful in my market, because I ignore the advice given on websites about wholesaling. Because in most cases, its wrong. I will agree that most advice on wholesaling is misguided to say the least on the forums but not all.

Thanks again for the debate, having fun and hopefully others are learning.

 

 

In California a double closing can be done instantaneously. You use the buyers money to fund the deal, if you create an LLC and sell that to the end buyer, you again can use the buyers funds to close the deal and on paper take ownership for a split second but do not use any of your own money. So I'm not clear on what exactly you did but I'm interested to know.

This is effectively the same as assigning a contract, someone else pays for a deal and you get a fee. Did you disclose your fee to the sellers? I'm trying to understand how what you did is different, more legal and ethical than an assignment. I feel like I don't understand so you'll have to explain. Did you use your own funds, close on a house, then sell it to an end buyer days later, or did you use their funds to complete the purchase? 

My point is that the effort to find these buyers is best spent once you have a deal, because it can be done in minutes. To find those 7-10 solid buyers from making calls I honestly don't even think its possible and if lets say it is. You've called 1000 people. That is a terrible use of time to reach so few people. You can just pull sales data for your target market and see who is the big dog right there, on an excel sheet by clicking sort. Boom, done. You saved yourself weeks on the phone with buyers you can't verify, and instead you have a list of actual sales that you know occurred. 

Its old school vs new school, its ineffective and ignoring technology and data to provide the info in seconds, that is verified. I've been told in this thread to pay attention to the years of discussions. Yeah, I am. Its painfully outdated and recycled info that hasn't been reconsidered in years. 

I have a marketing system that performs well, a new investor does not. I have targeted methods to source properties in my market, they do not. There is no telling what kind of deal they will come across on their first attempt and every second spent not marketing for deals is time wasted. 

Much of the build your buyers list advice is geared around old direct mail marketing, that you obtain info on criteria then mail for those types of deals. Well, direct mail has long been a dying form of marketing and now its inbound marketing that finds us deals. So we have even less of a clue of what might appear in our inbox to try and sell. This is even more the reason why this old method of build the buyers list is so wrong. Its old, outdated and not effective to current methods for obtaining deals.

I'm much more interested in how you were wholesaling ethically and legally though, fee disclosure, funding etc. 

 

You said you want to buy and hold multi family so why give your deal away to some investor in some wholesale assignment . Find a way to keep it instead .dont just give it away!  This is not a good way to build wealth .Wholesaling is very difficult everyone I personally know doing it is broke 

Somewhere along the way I have gotten the impression that wholesaling was born out of the practice of assigning contracts.  Real investors - flippers/rehabbers and buy/hold buyers - in a given market generally run in herds, and I suspect that even established investors don't see deals come across their desks in regular intervals.  So when an investor come across deals that they cannot do right at that point in time (might already have a couple flips going), he/she hands it off to another buyer that is looking for that kind of property, in that area, with that price point and whatever parameters... for a fee.  Win-win-win solution.  

This is LEGAL in Texas - assignment fees are listed right in the state promulgated HUD form - but again, we're assuming that the buyer is really a buyer, with the ability to close the deals they enter into.

But this is really a rather advanced strategy.  There are so many moving parts.  If the stars and planets don't line up, then these investors have resources to close anyway.  It is just crazy to think that new investors should be starting with this.  

But spend ten minutes on FB or YT and you'll see them out all out there extolling the virtues of wholesaling as this life-changing new religion that will save our financial souls. 

But let's rephrase this:

Creating Wholesale Deals = Lead Origination Methods

There are a lot of ways to do this. And REI is a team sport.

Originally posted by @Mark Sewell :

@Will Barnard I think you know what I am mean.  This forum is known to be tolerant at best with respect to wholesaling, and I would even call it borderline hostile.

It's illegal.  Its fraud.  You know the litany.  It's not a knock on BP, but this place is broker-realtor land.  It just is, and if you are going to hang out here, you need to realize that this pretty much their living room.  I just ignore it - but then I'm not a huge proponent of wholesaling either, at least not for newer investors.

Are there real professional wholesalers that hang around here on BP?  Sure, there are some, I suppose.  Heck, there are lot of realtors that assign deals from time to time. But see, they are realtors, with a license, so... you know, they wouldn't lack integrity.

I understand your point, but do keep in mind those who take that harsh approach are likely sick and tired of the guru infused “start wholesaling, it’s easy, no money or credit needed, just buy my program and anyone can do it” mentality. Then these poor people come looking for advice on mechanics here asking questions that reference illegal practices and immoral behavior. They are tired of it. So while it was meant to be informative and educate others, it has transformed into anti wholesaling in many threads. Even my “The truth about wholesaling” thread started many years ago is still active and informative and while some game on bashing it, I made many comments that the intent was to inform and educate on the right way and not to discourage.

As to your agent comment, I find your humor in that, lol. I will say that I don’t agree that BP is more agent filled, in fact, there are many more unlicensed members than licensed members and I have run into my fair share of immoral agents. Not to get way off topic here, but the sure I will list your home for $500k when they know it won’t sell for more than $450k just so they can get the listing then get a price drop. To me, that is immoral as well and that crap happens every day in my market and I’m sure across the country.

 

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