Very Unique Wholesale Deal

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Very Unique Wholesale Deal

Andre Williams
Atlanta, GA · Member since 2018 · 16 posts · 2 votes

Hey everyone,

As the title of this post states I have a very unique situation on my hands and it is a wholesale deal but with a twist.

So I've posted an ad in the marketplace about this property(go check it out if you're interested) and to begin the property is unique because it doesn't need any repairs at all, the owner of the house tried to sell it with a realtor and was unsuccessful and now he wants to try with me doing a wholesale deal

So I was able to get in contact with a buyer but he lives out of the country and doesn't have much experience with fix  and flip or buy and hold or anything like that. He is an Angel Investor and wants to do the deal but because he doesn't have a team in the local area to do what he wants to the property I'm not sure what he wants to do with the property once he buys it, I'm sure he just doesn't want to buy and it and let it sit.

My thoughts I am planning on suggesting to him were that he could rent it out and get cashflow every month from a tenant and hold it for maybe a few years and bank on home values rises and then try to sell it at a later time.

Or another thought is I have a friend who is a real estate agent and a good one and I could tell him about it and try to get it sold through the traditional methods immediately.

Not sure which one makes more sense which is why I'm posting on here looking for help lol.

anyone's advice is welcome!

Thanks

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Mike CumbieBusiness Member
REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
7y

I would say it is not unique, it is what is called an "expired listing". A property was put on the MLS for any number of reasons... the list is long (seasoning for short sales, sellers checking the market, Trying to get the neighbor to sell cheaper, high expectations) What ever reason a client wants, can be a reason to put it on the MLS. If it didn't sell there at that price it has pretty much saturated the market and everyone looking has seen it. If the price is much different you may have a play, if it is the same, then save your time.

Good Luck!

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  • Kelly Iannone
    Rental Property Investor · Orlando, FL · Member since 2018 · 301 posts · 354 votes
    7y
    @Andre Williams have you answered the “why” behind why it didn’t sell through the traditional residential retail route? As for your foreign investor, they may just need a place to park their money. Be careful advising them to hold onto it then sell it when the market appreciates more...you don’t want to promise something then have it backfire.
    2Reply
  • Doug P.
    Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    7y

    @Andre Williams As @Kelly Iannone asked. Why didn't it sell? In nearly all cases a house not selling on the MLS that needs no repairs is...drumroll...overpriced.

    Don't get me wrong. I love overpriced listings. Because sometimes the seller didn't realize it was overpriced and their agent didn't communicate that reality, so they become motivated since they didn't get any offers.

    Is that the case here?

    2Reply
  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    7y

    I would say it is not unique, it is what is called an "expired listing". A property was put on the MLS for any number of reasons... the list is long (seasoning for short sales, sellers checking the market, Trying to get the neighbor to sell cheaper, high expectations) What ever reason a client wants, can be a reason to put it on the MLS. If it didn't sell there at that price it has pretty much saturated the market and everyone looking has seen it. If the price is much different you may have a play, if it is the same, then save your time.

    Good Luck!

    4Reply
  • Andre Williams
    OP
    Atlanta, GA · Member since 2018 · 16 posts · 2 votes
    7y
    @Mike Cumbie thanks for advice and yes I’ve already confirmed the reason it didn’t sel is because the price was too high and now im looking to offer him close to retail value only because it doesn’t need any repairs
    0Reply
  • Andre Williams
    OP
    Atlanta, GA · Member since 2018 · 16 posts · 2 votes
    7y
    @Doug Pretorius yes that was the reason, it was overpriced and now I’m offering him close to retail value only because it doesn’t need any rehabs at
    0Reply
  • Doug P.
    Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    7y

    @Andre Williams Close to retail? What's your plan with the property? If you want to wholetail it you need to get it for about 85% of market value. If you're offering close to full price I hope you're getting it on terms, sub2, contract for deed, or lease option.

    3Reply
  • Andre Williams
    OP
    Atlanta, GA · Member since 2018 · 16 posts · 2 votes
    7y
    @Doug Pretorius well my plan was to wholesale the contract to my end buyer and he was thinking ng about trying to rent it out to someone But what is wholetailing and contract for deed? If you don’t mind explaining, I’m open to different options if they make more sense
    0Reply
  • Doug P.
    Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    7y

    @Andre Williams Wholetailing is selling it to the end buyer (the person who's going to live there) because they will pay more than an investor. But you still have to get a discount otherwise there's no money for you to make.

    Contract for deed is where the seller agrees to take payments over time instead of cash upfront.

    0Reply
  • Andre Williams
    OP
    Atlanta, GA · Member since 2018 · 16 posts · 2 votes
    7y

    @Doug P. ok thanks, I think what I was planning on doing is kind of like wholetailing, The end buyer is willing to pay close to retail but still a discount so I can make money but the difference is he doesn't live in the state, so I think he was planning on buying it but then trying to rent it out to someone through a lease agreement, would that work? does the end buyer for a wholetail deal have to live in the property?

    0Reply
  • Doug P.
    Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    7y

    @Andre Williams Sorry, I didn't realize you already had an out of state buyer, I thought you were looking for one. Sure that'll work!

    0Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    7y

    @Andre Williams

    No wholetail is just a word with no specific meaning. Some people wouldn't call this a wholetail. It doesn't really  matter what you call it.  

    Well that's just a standard rental. He buys it and rents it out. Yes he can certainly do that. Will it work out well for him financially? I don't know, it depends on the numbers on this specific deal.

    0Reply
  • Gilbert Dominguez
    Investor · Detroit, MI · Member since 2016 · 211 posts · 144 votes
    7y

    Your potential buyer is an investor already , an angel investor as you said. That strikes me as odd since most angel investors I know about shoot for 250% on their money . Anyway for whatever reason they are now looking into buying real estate in the USA.

    I don't know. For a foreign angel investor being able to buy into the US real estate market just may fit their own definition of success. He may just be thinking about Wealth preservation and US real estate in his circles may be view as a store of value. 

    I would tread lightly and make yourself responsible for as little as possible. Take the money and run. He is a sophisticated investor so should be quite capable of handling his investments. Just make sure you do not overplay this as if you are a salesman. Whatever investments he takes on is on him not you. Whatever you say make sure you know what you are talking about.  It is easy to think, " oh I will just buy it an rent it". There is no assurance the property will rent, right? Who is going to do the marketing and tenent selection for him? Will he need a property manager? most likely since he is out of the country. 

    I really do not know what to tell you. You would have to know as much as I do about what can be done with a property to make it pay off and worth investing in under the right conditions. Obviously I can't do that since I have nothing to do with this deal. 

    Your initial intention was to find a property , tie it up and pass it on . I would suggest you simpy stick to that and move on. 

    Don't make it more complicated than what it needs to be. Just make sure that wholesaling is legal in your state. There is nothing that says you absolutely need to make sure a deal has so much meat on the bone, that is up to the end buyer/investor to decide for themselves. 

    What has been mentioned here is simply what your typical cash buyer would be looking for and there is no law that addresses the issue of how much meat has to be in a deal for a cash buyer.

    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    7y

    How does retail price and wholesale even make the same post lol?

    0Reply
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