A close friend and I have been trying to find out first wholesale deal in Los Angeles. We hear countless stories that we cannot wholesale in Los Angeles because it’s too competitive.
We still haven’t gave up, and we’re not in the verge of giving up either. What are some tips that may be useful for my friend and I to succeed in at least one wholesale deal here, in Los Ángeles?
We have tried mailers, cold calling, hiring VA's, pulling crazy lists. Nothing has seemed to work as of right now. We've been using VA's for a month already and nothing positive has came back from that.
Our issue is filing motivated sellers anywhere. Finding off-market deals are really difficult to acquire.
It’s obvious that I won’t get a deal within a day, but I would like some tips from people who have overcame this barrier and have succeeded.
I don't know what it's like to wholesale in LA as I have zero experience, but someone I know just closed his first deal for 45k out there, so it's definitely possible. He had been cold calling since July. So don't give up.
@Kenny Colato Have you tried software like Propstream and REI/Kit.
I just did a search on Propstream for LA and found 538 Pre-foreclosures, 118 at auction, 555 bank owned and 3377 vacant. Surely there must be a few deals in there.
You have to target the homes or owners that will not get a value add by getting on the market or wide exposure. Family disputes, hoarders homes, people who don't want their neighbors to know they are moving, people who don't want their neighbors and friends to know they have to sell because they are behind. To find off-market deals in even the hottest market, you have to do less spray and pray (same message to everyone) and more data dives to see who your target sellers are. LA is so hot that almost all properties are better served on the market, but some people don't want Open Houses or lockboxes or signs or traffic with COVID. You just need to reach them before someone else does.
I have spoke to some wholesalers here in Los Angeles and most definitely, there is potential to find a deal, it’s just very competitive so that makes it difficult, yet not impossible.
Morning Jim, Yes I have pulled up the lists for those homes and I have pulled the list for those homes, skip traced, and cold called but, unfortunately, no luck with that..
Thank you for your time though.
@Kenny Colato Just to be clear, you skip traced the owners of 3300 vacant homes and called the ones that you could get a phone number for and you haven't been able to find 1 motivated seller?
Yes, that’s correct
@Kenny Colato That's a lot of no's. what was the typical response you were getting?
@Kenny Colato , exactly how many did you call and how many did you speak to. Of the ones you spoke to can you break down the responses into buckets. Having this data will help determine where you need to focus. Same deal with direct mail, how many did you send, how many calls did you get, how much returned data. If you make sure you generate data from your activities is will help you determine where to focus your energy next.
Most of their responses were no, I’m not interested in a rudely manner.
Hello Stephen. I called over 1,000 numbers and most of them said they weren’t interested. There were several that said they may be interested in a couple of months and I have them saved on a CRM. I have followed up, I spoke with them a month and a half ago, and they say they don’t know who that is, that they don’t own a property or anything.
My script is usually that I say I work with a group of investors in the area and we’re buying homes for cash.
I only sent 100 mailers because I didn’t want to go that much into the mailers than speaking directly to the sellers.
My experience is most people don't answer. So I leave a voicemail, text them and send an email. Then I followup the next day and each day after for about 2 weeks until I get a response. It's all about the follow up.
@Kenny Colato . While I believe that it is doable and I have Wholesaled myself in very hot markets on the east coast, the The problem is that deals , very unpredictable and tend to come out of nowhere, but when you hit one you usually hit a home run, That being said your return on time might be terrible because if that one or two deals per year don’t show up your waisted a year, rather perhaps find a sub market outside of LA we deals flow more predictable,
You will know that if you mail thousand mailers it will bring you one deal and so on.￼
@Kenny Colato . Remember you can always consider becoming an agent.
It could be just as lucrative as well.￼￼
@Kenny Colato On top of it being competitive, it's also a huge seller's market. Not much reason for a homeowner to sell their property at a discount when they can get multiple above-asking price offers the first weekend after listing. Of course there are those out there who don't want to list for whatever reason, but my question is always how much time and money will it take to find those needles in a haystack.
Have you ever considered virtual wholesaling? If you are spending money on marketing, you might get more bang for your buck out of state. I've done 5 out of state deals since December with partners i found through various investor groups. The profits are a lot smaller than you would probably make out here, but it's a lot easier to make the numbers work elsewhere.
Thank you for your suggestion. I will most definitely take it into consideration because I’m having a pretty difficult time trying to find one deal, I’ve been doing this little over 2 months and nothing has came up.
I understand that trying to wholesale here in this competitive market is very difficult. I have spoke to my partner about virtually wholesaling, but the VA's we have hired, are not doing what we've told them to do, neither following up, nor following the script we've given them.
Thank you very much for the suggestion and I do agree with you on people wanting top dollar for their home, here in LA. There will be one person here, that will definitely want to sell their home off market for whichever reason.