All Forum Posts by: Charles Craggett

Looking for Cleveland wholesalers. I've searched the site and even connected with a few people, but was expecting a little more action in terms of being put on the mailing lists and being contacted. But so far nothing. Any active wholesalers out there?

There are so many people and companies out there who claim to be wholesalers and many more newbies who claim to want to start out in wholesaling as a means to get started in the biz.

Let me tell you about a recent experience with a so-called wholesale deal: You be the judge too!
A property was offered to me as a wholesale purchase.
It was offered at $270k with only $10k in rehab (so claimed the wholesaler) and the exit value they provided was $350k. With these numbers, the deal is at 80% of value which is pretty much the most I could pay. I explained that the exit price appeared to be on the high side (just from my expert knowledge of the area) and that $10k in rehab is pretty rare. I was then told that they may be willing to sell to me at $260k (so obviously they had at least $20k in mark-up at their OG price, which by the way is fine if the deal had a good spread, this one was bare)
With that reduction in mind, I went to the property.
It was very close to the freeway and the freeway noise could be heard quite loudly from the yard and slightly from the inside with all doors closed. This decreses values some what. Next, I found that the condition of the property was no where close to $10k in minor rehab. The kitchen had no place for a refrigerator with the current layout and it was poorly designed. The cabinets appeared to be newer, but done cheap and laid out poorly. The countertops needed replacement to granite, and new kitchen appliances. All flooring needed to be replaced, there was some foundation issues from the earthquake of 94' (Northridge quake), the bathroom was in need of a full gut and rehab new, all bedrooms needed new light fixtures, closet doors, and some electricla upgrades, plus the driveway needed to be re-surfaced and teh chain-link fence removed and replaced with a more appropriate wood fencing for curb appeal. Both interior and exterior needed paint, and all windows should be replaced new (requiring some minor stucco repairs as well.)
After my evaluation, it was determined that the exit value was $300k ($319k as the max high list point) and the rehab was $30k and could be $35k.
At a $260k purchase and $30k rehab with $310k exit, this deal is at 93.5% As such, it is an oximoron to use the word deal to describe this investment. I only pray that some sucker does not get screwed on this property.

The moral of the story: To be a true wholesaler, you must give out true and accurate figures, otherwise you make a bad name for yourself.

To be a true wholesaler you need these 3 main ingredients:
1. The ability to contract RE at great discounts.
2. The ability to build a real buyer's list (larger, the better)
3. Ability to evaluate your market and ability to peg rehab numbers. Both of these require a vast knowledge of the local market conditions and the know-how to quote repair items.
Without ALL 3 of these items, you CAN NOT be a true wholesaler.
To add a 4th item, you should be honest, provide accurate numbers, and provide as much due diligence to your potential buyers as possible. This will allow you to keep yoru buyers coming back for more deals.

Hello! Welcome to the area! I'm a Realtor, Leasing Specialist and Property Manager in the Akron and Cleveland area. Please let me know if there's anything I can be of assistance with. 

Happy investing and good luck!

C. 

Hi Charles,

I saw your post here, and wanted to introduce myself. My name is Aaron, and I am an investor and a home inspector in the Cleveland and Akron areas. 

I am also an active member at the Great Lakes REIA, you should check it out some time.

Let me know if there is anything that I can help you with.

Cheers,

Aaron

 Charles you need to learn other strategies besides the assigning strategies of wholessling

For property that needs work buy it on subject to, use private money for rehab and resell it

For free clear house minor rehab, do a joint venture with the seller, create a private first mortgage with no payments for four months, use private money for the rehab, fix it, resell it with an agent, make ten grand after you pay off first and second mortgage

Get on title with a land contract in Ohio, and do a lease option exit

If you're on title you're in good shape