Is pre foreclosures and forclosures a good route for beginner wholesalers?
That's a great question! I wish I knew
@Curran Jewell @Ben Brown Generally not, IMO. For pre-foreclosures the sellers may have rights or there may be local laws against it, especially if you can't perform. In other words, you tie up a property for 2 months and can't sell it, and now the owner is a further two months behind on payments, plus penalties, attorney fees, etc.
Foreclosures are even tougher, because once the bank takes possession, they'll use their in-house real estate agent to list it on the MLS, for the highest possible price. This of course is the opposite of what you need to do as a wholesaler.
Your best value is to find off the market deals.
@Tom S. , Great info, makes total sense. Also, the idea that a wholesale deal can tie up a property for a couple of months is an eye-opener.
@Ben Brown It definitely can depending on how the contract is worded. However, that's another reason not to work with agents if they're representing the property. They'll be quick to "flush out wholesalers" by requiring a good amount of deposit, a pre-approval letter in your name, and a strict set of quick deadlines (usually all contingencies would be released within 21 days).
@Tom S. , Great info again, thank you!