All Forum Posts by: John Fossetti

Depending on your credit criteria and your ability to get financed, If you could use conventional financing I would try, but there will be issues.

Most of the time, if a property needs extensive renovation it will not be eligible for financing. Also, it could become a lengthy process and ultimately say no.

I would consider finding private money or using a Private lender. A lot of people hear the words "HARD MONEY" and get scared off but will jump at the bit for a money partner.

If you are buying a property with an ARV of $200k that needs $40,000 in repairs that you get for $100,000.

If you used a partner when sold, you will give up 50% of your profit, (say there are no commissions and what not) you will give up $30,000 and you have a partnership.

If you took out a "HARD MONEY" Loan of $100,000 (and used $40,000 of your own money for Rehab) at say worse case 15% for 6 months, your 6 months of interest would be about $7,500. add worse case 5 points to that ($5,000) you would have only spent about $12,500 adding a profit of $17,500 which only calculates of giving up about 30% of the deal.

I hope all this math and numbers didn't get too confusing. I get money a lot cheaper but I was using higher numbers as I like to be conservative!

Building great relationships with the REO agents is the best way to get into the properties if you are not licensed.

Before I was licensed, I had my REO Agents calling me to ask me how much I would pay. Now this was about 3-4 years ago and a lot has changed. No being a licensed agent it makes it easier for me to gain access. I still have my agents call me and tell me about the properties before they even hit the market, but if you don't have a property under contract and it is on the open market I would not wholesale it as it isn't really a wholesale deal.

You need to market and get deals that are not on MLS in order to become a successful wholesaler.

Hello Roc P. , I have used realtors to wholesale deals, my buyers are cash buyers so I will do a double closing if the property is listed, I have also utilized Trusts and sold the beneficial interest of the trust when I purchased REO properties.

I let them know that I know that they are in foreclosure, I also try to make them feel comfortable that there are many other people in the same situations and I am here to help.

I show empathy and try to help them by giving options. Remember, we are in the business of solving problems and helping distressed home buyers.

If you know the auction date, I would put that in my letter as well as they will usually be more motivated knowing that there is an actual date that their home that they put a lot of hard work and money in will be taken away by the big bad banks!!!

I hope this helps!

Samson Kay, first off, you will never find the 65-70% deal, you have to go out and make the deal. If you wait by your phone for someone to call you and sell that low you will be waiting forever. Get out there and negotiate to get the deal. REIA's and other Investment Clubs (Black Diamond) are great places to network.

Many of the people on this thread have investments clubs and I have met almost everyone on this thread at investment clubs.

Stay away from the adjustable spreadsheets and eraser math when analyzing your numbers. Most Renovators will purchase at 70% ARV less the repairs, so know when getting to your MAO make sure you add your fee.

Hello Kyle Clark, welcome to BP, when you get started wholesaling be prepared to market often and consistently. You certainly sound like you have all of the tools to get started now you just need to do it.

Good Luck!

Building Your Power Team!

Hello Bradley White, networking and building you power team is a must, and you must have a contractor to become part of your power team. It is tough to get a contractor to just go out and give you estimates if you don't know them. So networking and build a relationship with a couple of good contractors is crucial.

You could also pay for a home inspection as well and utilize the inspection report as a further negotiating tool. Say you put a property UAG with an inspection contingency, once you know what the property will need to be fixed, you can get a scope of work to a contractor, they could bid and you will have a pretty good number on the repairs. If your numbers don't add up you could renegotiate the current deal.

You could also network with other investors and see if you could tag along with them.

I have had some success wholesaling REO's, but it was a lot easier 3 to 4 years ago than today because of the competition. Now a lot of banks seem to be putting deed restrictions on the properties as well preventing the title from changing hands.

If you can get in with an REO Broker that will let you know about some properties coming available before they hit the market would be best, you can do all of your diligence before anyone and have offers.

In Massachusetts I utilized the power of trusts to circumvent the deed restrictions and sold the beneficial interest of the trust. Definitely consult a tax and legal experts as each state varies.

Hello Christian De Jesus, What Ryan Young stated is the way I do it. To be a good wholesaler you need to market property and become a great negotiator. If you wait for someone to call you and offer to sell their property at 70% ARV minus repairs, you will be waiting by your phone for a long time. I deal with distressed properties, a distress property isn't the property itself, but the situation the sellers are in. They need to sell, they want to sell, obviously they want top dollar, but it is your job to create the great deal.

Most of my buyers I have will buy at 70% minus repairs and if I can get more, I will try. Most of my buyers aren't good or don't want to negotiate with clients and/or market. So they pay me my fee for bringing the deals to them! Equity should never play a role in your decision making.

Welcome to Bigger Pockets Aaron Yates and Ed Montero. There are a lot of great people on this site that will help you in your Real Estate Investing career!

I started off as a wholesaler, once I got comfortable as a wholesaler, I moved on to flipping. The biggest part of wholesaling is marketing, always continue to market even when you have a deal or if you are starting to flip houses. Never stop marketing, even when you are flipping houses, if you can't take on another project you can always wholesale it!