Hello BP Fam I live in Miami FL and have decided primarily to focus myself on the wholesaling aspect of real estate. Ive done some flips before in the past and after currently going through a not so good transaction with a local wholesaler on a purchase, I figured wholesaling would be a great way to invest with less risk, as well as keep some properties for myself if they turn out to be great deals.
I subscribed myself to Propstream, defined my strike zone and have mailed approximately 600 postcards so far. Since doing that I received my first lead directly through my website including a call from an owner asking to be taken off the mailing list plus some more traffic to my site as a result. Not saying these are great strides but small wins in my perspective.
My question is do you have any tips for when I talk to these sellers or what I should do next? What are we typically offering in Miami to stay competitive in the market? I don't see where the 70% rule would work out in this market so I would not want to offer more than flippers would pay but I also would not want to be way under either and miss out on some good opportunities.
Also I am targeting pre foreclosure single family homes and duplexes with values up to 250K in case this is relevant
Welcome to Miami REI. I am an investor here in Miami and I focus primarily on buy and hold rentals which I've financed through a series of fix and flips.
I've bought direct from seller, through realtors and from wholesalers like yourself.
I've also used all the typical avenues to search for seller leads: Direct Mail (yellow letters), Bandit Signs, Social Media and more.
So here goes:
1. There are no 250K SFH houses and duplexes in Miami (condos and apartments sure). That ship has gone and sailed as of 2019. Within Miami city limits what you will probably see are SFHs in not the best areas with starting ARV's in the mid 300's and quickly escalating from there. I sold a flip last year October in North Miami off of 17th avenue by 95 in a TOUGH area and it went under contract for 320K within hours.
2. Don't overthink the 70% rule. Yes as a buyer I want to be in a property for 70% after rehab so I'm looking for a wholesaler to bring me something close to that but that should not be your biggest focus. The biggest issues you will have down here are locating sellers who are truly under distress. Without that distress you could offer them 95% of ARV and they still wouldn't take it given how competitive the market is.
3. As stated in #2 you must find people in distress and distress = PROBLEMS. Problem properties will be your best bets. Liens, taxes, rough neighborhoods, illegal additions and anything that has scared away traditional buyers or has not allowed them to get bank financing will be your best bets. Locate a problem property and a seller in distress and then you'll have an opportunity to negotiate your 70% of ARV deal.
4. Last but not least don't BS us investor/buyers. We already know what the property is worth as soon as you send us the address. If you get a 3/2 property under contract and give me comps of 400K but I look and i see that the city has the house listed as a 2/1 (meaning illegal or unpermitted additions were done) then why would I pay based on square footage for illegal work. 90% of my frustrations with wholesalers down here is them trying to sell 2300 sqft property to me for a "great price" only for me to look at the county records to see that only 900 sqft are legal and the rest isn't. As is common in Miami if you're going to sell me problem properties don't use problem free properties as your comps.
Best of luck
Your best bet is to ensure you are driving traffic to your site. In my experience as a cash investor who works with wholesalers and finds his own properties our site is our number one lead generator. Having a successful site is like OWNING vs renting your marketing like postcards, sms, etc. and overtime you generate more equity in your site over time. Anyways, hope it helps. DM me if you have any questions.