All Forum Posts by: Dev Horn

In California, you can buy a house from a dead person?  That makes it a lot easier I suppose.  We actually have to have a deed with living people on it, before those people can enter into an agreement to sell it to us.  I bet most states are like that.  Otherwise, you could have some HUGE issues on getting clear title on down the road.

From the Idaho statute:

DEFINITION ~

"Dealer in options" means any person, firm, partnership, association or corporation who shall directly or indirectly take, obtain or use options to purchase, exchange, lease option or lease purchase real property or any interest therein for another or others whether or not the options shall be in his or its name and whether or not title to the property shall pass through the name of the person, firm, partnership, association or corporation in connection with the purchase, sale, exchange, lease option or lease purchase of the real property, or interest therein.

IMPLICATION ~

(36) "Real estate broker" means and includes:

(a) Any person other than a real estate salesperson, who, directly or indirectly, while acting for another, for compensation or a promise or an expectation thereof, engages in any of the following: sells, lists, buys, or negotiates, or offers to sell, list, buy or negotiate the purchase, sale, option or exchange of real estate or any interest therein or business opportunity or interest therein for others;

(b) Any actively licensed broker while, directly or indirectly, acting on the broker's own behalf;

(c) Any person who represents to the public that the person is engaged in any of the above activities;

(d) Any person who directly or indirectly engages in, directs, or takes any part in the procuring of prospects, or in the negotiating or closing of any transaction which does or is calculated to result in any of the acts above set forth;

(e) A dealer in options as defined in this section.

//

IT APPEARS TO ME THAT WHAT THIS IS SAYING IS YOU MUST BE A BROKER TO BE A "DEALER IN OPTIONS".

Wholesaling can be accomplished with options, but most of the time it is done via assignment of a contract, which is legal everywhere.

What do you want from them, and what do you have to offer them?

I think you want their help with CMA's (comps) and other market research, plus maybe you want them to let you know when a deal pops up on the MLS, right?

What you can offer them is ~ "Sellers often contact me before considering a retail sale via an agent.  Often they find my cash offer doesn't meet their needs.  I'm happy to refer those sellers to YOU."

Offer a win-win situation like that.  Contact a few and tell them you're looking for an agent partner and explain what you want and what you can offer.

Last, some brokerages just seem to be more investor friendly - such as Keller Williams.  But small brokerages can often be your best bet because they might be hungrier for leads..

When a homeowner passes, generally their estate is handled in Probate court - that's where the will is executed and changes are ultimately made to deeds, titles, etc.

You can get probate information from your county.  But an estate can be in probate for months, even a year or more, and the heirs cannot sell an inherited house until probate is complete and the deed is changed to reflect the new ownership.

Once the heirs own the house, it will often show up in ABSENTEE OWNER lists, if none of the heirs live in the house.  We find a lot of inherited houses when we mail to absentees, and you can get that list from a public source such as Listsource.com.

The answers to questions like this are often state-specific.  You would be wise to ask a real estate attorney in CT.

Our purchase contract explicitly states that we have the right to market the property for sale.  But we don't post wholesale deals on FSBO sites - that's not where you are going to find people that can bring cash to the table, with no need for you to make repairs.  We have a network of cash buyers ready to pounce on anything we can find.  That's what you want.  Build that list and email deals to them.  That's the kind of marketing that you need to be thinking about.  Zillow, Craigslist, etc. will have no role in funding wholesale deals.

FINDING MOTIVATED SELLERS is THE challenge for wholesalers.

This is a marketing challenge.  I always say, you may be able to  buy a house with no money, but you can't buy advertising with no money.  Successful wholesalers are really marketing people and contract negotiators.   Most marketing is pay to play.  Wholesalers will NOT build their business with free posts on Craigslist.

So, assuming they can pay for advertising, the issue becomes, what does it cost to generate a deal?  If I do a marketing campaign - AdWords or direct mail etc - my cost per lead could easily be $100.  The average wholesaler can close (get under contract) 1 deal out of 20 leads.  So their cost per DEAL is 20 x $100 or $2,000.

If they flip the house to a cash buyer for a $3,000 assignment fee, they'll say "I made $3,000 on that flip!".  Nope.  They made $3,000 revenue - $2,000 marketing cost = $1,000 profit.  All that work for $1,000.  Quickly they find that it's a crappy job and if they stop marketing the whole thing STOPS.

Now, there are some markets where wholesalers can make much larger assignment fees.  I know guys that can get $20K+ assignment fees in their market.  Well, I'd spend $2000 ALL DAY LONG to generate deals with $20K assignment fees.

The reality is, most wholesalers are much closer to $2K than $20K on their assignment fees.  The first key is to understand your cost per lead and cost per deal so you know if you have a profitable business.  The second key is to do more than just wholesaling - do the flips, get licensed and list properties, etc.  Wholesaling alone if often not a viable business in many markets.

Investors need agents because they need someone to do comps for them - quickly - so they have that info before making an offer on a house.

Often when we make our cash offer, it's less than the homeowner hopes to get.  In that case, we might tell them that listing the property (on the MLS via an agent) may be their best option, and then we make a handoff to our agent friend who often gets the listing.

And just so you know... A licensed agent cannot give a non-licensed person a share of their commission.   They can help an investor pay for a marketing campaign, purchase leads from the investor, etc.  So there are some other ways you can work together for a win-win in your market.

Listsource.com is provided by CoreLogic, which is a primary provider of data to the real estate and mortgage industries.  They collect and aggregate data from multiple trusted sources such as county records and mortgage companies.  In my opinion, they are the best data source for mailing lists such as absentee owner with high equity.  I have a video HERE on YouTube where I walk you thru pulling an absentee owner list from Listsource.

To find cash buyers... Here's one way ~~~ Google!

DON'T click on the investor ADs - that costs them money and no one wants wholesaler leads coming through their paid advertising targeted at motivated home sellers.

DO scroll below the ads and look at the natural search results.  Larger more well established investors will be near the top.  CALL THEM, don't email them (unless they ask you to do that when you call).  ASK THEM - Are you a CASH BUYER?  If yes, use that awesome sentence above to tell what you do and then ask if you can put them on your list and notify them when you get a deal.  If no, thank them and move on.  If yes, THAT'S when you ask them the key questions:

1) What are you looking for - single family homes?
2) Where are you looking to buy?
3) What is your ARV (after-repairred value) range?

KEEP IT QUICK AND DON'T SOUND LIKE YOU'RE READING SOMETHING.  Just talk.  Cash buyers WANT deals.  Respect their time until you have one to offer.

You can use Gmail and add cash buyers into the Contacts and then put them in different groups (by city, county, price range etc).  Then when you get a deal you can send it to the group that is looking to buy in that area, and not annoy everyone else.  (Most wholesalers send me deals from all over and at some point it's just spam when it's no where near where I invest.)

That is some good marketing copy - a susinct description of what you do and for whom.  I humbly offer just a couple of edits to your well-crafted sentence:

My company finds motivated seller opportunities for other investors by doing our own marketing and generating off market deals for serious cash buyers ...