Beginner- types of wholesale properties I should be looking for?

Question

As a beginner, what types of whole sale properties should I be looking for? There are many foreclosures in my area, how will I know i’ve found the “right” one?

Stephen J Davis · Answer

Remember that step one is to build your buyers list. Then find the deals that they want. Most make the mistake of finding the deal first and then looking for a buyer. Wrong. Join a local real estate investor club and gather 30 to 40 names of buyers. Ask them what they are looking for and then go put the deal together specifically for them.

Don Konipol · Answer

@Bella Gilbert lots of different opinions as to whether seek a property that meets requirements of your current  potential buyers or seek a great deal no matter what and a buyer will be attracted to the deal.  Kind of listing agent vs buyer agent.  I think it may be better for those inexperienced to get buyer criteria first as they probably wouldn’t recognize what a good deal looked like otherwise, and they can get feedback as to why a deal they find doesn’t meet the buyers criteria.  To more experienced and knowledgeable players finding the deal is the primary driver, because great deals, even very good deals will attract buyers.

An interesting case in point.  40 years ago I was a new commercial real estate broker,  I accumulated a list of over 200 “buyers” who had contacted me wanting to find a “deal” on a. Triple Net Leased property in Houston.  By pure happenstance I cam across the classic super highly motivated seller who wanted out yesterday and was willing to leave all his equity on the table.  As I remember it the property was worth about $550,000, through it off net income of $65,000 per year.  The seller wanted someone to assume his $185,000 note, and pay closing costs, legal fees, and some taxes totaling $27,000, so a buyer is buying a property worth $550k, netting $65,000 per year triple net, for $210,000, with 90% leverage built in, no qualifying.  I called every buyer on my list; three were interested, two made full price offers and the third offered $40,000 over asking price, and bought the property.

The other 197 had every excuse possible for not wanting to move forward on the second best deal I’ve seen in 40 years in real estate.  I just three away their contact information; the majority of “buyers” are dreamers who either don’t have the capacity to buy the type of property they’re seeking, don’t have the ability to recognize a great deal, or whose expectation level has been so skewed by guru nonsense that they’ll never find a deal that meets the criteria.

Aron DeVoe · Answer

@Bella Gilbert as a beginner foreclosures may be a little tricky to deal with as there are a few more steps than a traditional wholesale (assigning of a purchase agreement) .

What worked for me was driving for dollars and specialized tax lien list. Brent Daniels has some good videos on YouTube on what types of list to pull. Then cold call the hell out of those list. Being proactive is KING.

I personally don’t agree with the building your buyers list first being that I am always adding to my buyers list so it’s not necessarily a measure of first or last

Aron DeVoe · Answer

Sidebar : I’m pretty sure @Stephen J Davis knows a lot more than me lol

Bella Gilbert · Answer

@Stephen J Davis Huge help! Thank you so much.

Beginner- types of wholesale properties I should be looking for?

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