All Forum Posts by: Will Barnard

Searched and didn't find much information.  I realize this is by no means the best way to estimate construction costs but I was curious what the avg construction cost is these days in Los Angeles.  I'm not talking for a high-end home just something decent for the average home buyer. :)  I keep hearing ~$350/sqft.

Repling to Will Barnard (Moderator)

Thank you Will, I found some VCs! I guess I was Googling the wrong phrases

@Will Barnard

Exactly. I often advise clients to get professional advisors as line 1.5

Account Closed

The “trick” is identifying people willing to sell their property well below what they could sell for through a real estate broker. While these people exist, they are few and far between. On BP we have, through the years, exposed many claims of income earned as false, misleading, or unprovable.

The key these days, with all the information available on the internet for anyone to access, is targeted marketing. Most of the successful players spend $10,000 + per month on marketing, SEO, SEM, website development, influencers, etc.

Another issue, depending on your state, is licensing. This is another topic, but the way wholesaling is taught may require a real estate brokers license, depending on the state your in.

One final thought. Wholesalers hit a “home run” when they tie up a property in contract for about half its value. When you ask yourself who’s most likely to sell a property for half its value, the answer is someone totally unaware of what their property is worth. Often this is people with dementia, at some stage of Alzheimer’s, mentally impaired people who inherited property, etc. Are these people you want to “steal” their only asset from? Would you want a “wholesaler” to pay your 90 year old parents 50% of their property value? This relates to ethical, moral as well as legal decisions.

All this advice is solid.  I happen to fall on the other side of when to find the end buyer, but that's just me.  One thing everyone left out that was part of the original question is looking to have no money out of pocket.  9 out of 10 times, finding a legit deal as a wholesaler takes some upfront cash no matter what the guru's are selling

@Orlando De Los Santos  

Oh man, where to start...so much could be said.  I'll start with one item and give you more later if you want. 

We'll start with the glaringly obvious...

Lead sources for Wholesaling

Those three that you mentioned aren't going to be enough.  Everyone and their mom has access to those and is sending out crappy postcards that all look the same and say all the same thing.  These lists are stale, the homeowners on these lists have already been touched by so many other investors, unless you just luck up with perfect timing (which can happen), you are going to be frustrated before you get going.  

How can you niche down?  How can you hone in on a certain type of seller?  Do you have the ability to craft a message that resonates and converts?  Have you taken the time to truly build the avatar of your ideal customer?  95% of the people I see posting haven't.  They think they can sign up for a service for $39-$99 a month that will just pop out deals worth thousands lol.  

If this is you, stop.  Do better.  Think about what I'm saying and make an adjustment.  If you have done these things, good, you have done more than most.  I didn't see you mention a website to generate leads.  This is most investors' number one source for leads.  

Do you have a real budget for lead generation?  And by real I'm not talking $300  per month.  Most people want to get into wholesaling because they are told by the gurus they don't need money.  If you really want to do this business without money, its doable but VERY VERY VERY difficult.  So what is your monthly advertising budget?

To be honest, you are wasting your time building a cash buyers list until you actually start generating some leads.  I can talk more about calling cash buyers later if you want (most of them lie and the ones who don't are sick of people calling them with criteria questions but no actual deal)

Hey Everyone, 

I have been learning and researching how to go about setting up my wholesale business and launching it in January 2022. I would like to get your feedback about the information I've compiled to do it the right way and efficiently. 

How to wholesale legally with no troubles?

1. Have Finder’s Fee contract with Investor
2. Form a new entity with wholesaler and Investor, at closing, you sell shares of the company to the Investor for the agreed-upon fee.

What is Wholesaling?

• Selling the RE Contract to an investor/ Cash buyer.

How to get paid and not break laws?

• Create LLC with you and Partner and once closed sell share of the LLC to Partner for finder's fee.
• Create a Finder’s fee agreement with the Cash buyer.

• How to be a great wholesaler
  1. The ability to contract RE at great discounts.
  2. The ability to build a real buyer's list (real cash buyers with real proof of funds)
  3. Ability to evaluate your market and ability to peg rehab numbers.
• 4. Honesty

What is the Key to wholesaling?

1. Marketing and getting off-market motivated sellers.
2. Quality Cash buyers list

Lead sources for Wholesaling

1. Listsource
2. Popstream
3. REI List Broker
4. How to estimate Rehab cost.

$10 per ft= light renovations

$20 per ft= medium renovation

$30 per ft= Heavy Renovations

What is an A-B contract?

A-B contract is the contract between the seller and the wholesaler. You are the B-C transaction, from the wholesaler to you. 

A= seller

B= wholesaler

C= buyer

Cash Buyer/ Investor Qualifying Questions

1. What's your Sweet spot?
   
   
2. How quick can you close?
   
   
3. What are the top ideal property types you want? (I.E. duplex, single-family, apartments, etc)
   
   
4. Do you have access to Private money?
   
   
5. Do you have access to hard money?
   
   
6. What’s your price point?
   
   
7. Do you want to buy and hold?
   
   
8. Will this be a flip?

1. How many deals have you done in the past 2 years?
2. May I have the addresses?
3. Do you have Proof of Funds you can send me?
4. If I find you a deal that fits your Criteria, how soon can you close?

Vetting Cash Buyer/ Investor?

• Have title company lookup all Cash closed transactions with entity names in the area that repeat multiples of 1.
• Make sure to get financial Feedback. (Example, if I find a deal that needs 60K in rehabs, after repair it could sell for 350K, how much would you be willing to pay for that deal?

Helpful tools

Comps and Lists - Propstream

Skiptracing - Batchskip

Drive for Dollars - Deal Machine

E-sign Docs - Hellosign

CRM - Podio

Dialer  - Mojo Sells

It is my goal to fully Launch into Wholesaling by January 2022 and I want to make sure I am doing it correctly to build a reputable name in the space, eventually getting into Fix and Flips and Rentals. 

I am currently in the process of building my buyers list, any insight as to how to find properties out of state, and what would the process look like? would you guys mind sharing the template contract you guys are currently using? anything else that I might be missing? 

Any feedback would be greatly appreciated, thanks! :)

Typically, yes. LLCs are a tool for liability protection that we often use.