All Forum Posts by: Barry Pekin

@Nick Pierce,

Wholesaling doesn't typically require large EMDs.  I think $100 is optimal.  You might get some push back on this from time to time, but generally when you're dealing with motivated sellers, this isn't their priority.

@Jon K.

I'm a big fan of PropStream.  It actually does have a lot of filters and you have access to pretty much every property in your target area.  You can filter on equity, out-of-state owners, vacant properties (though that one's tough in any data feed), price range, types of properties, etc.

I like to look for high equity out-of-state owners and other stuff that seems good at the time.  Since you can choose your own filters and area, you can get a unique list.  The reason you're going to be marketing to people who are already being marketed to is because everyone's being marketed to when they fit the right criteria.  

@RJ Dixon,

What you do should depend mostly on what your strategy and goals are.  If you're trying to build up cash, then you should wholesale or wholetale it.  If you're looking for some long term income, then buy it and rent it out.

Of course, I'm not looking at the numbers.  That's where you will know if it's really a good deal or not.  And, I'd add in that when people say it doesn't need any work, that's rarely the case.  If it were, the owner would probably want to list it.

@Alison Walden,

If you already have it under contract, there's no reason to assign it to yourself.  If you're trying to get a wholesale fee and have it financed with the purchase, I wouldn't bother.

If you need financing, you can go with a bank, which will take a while. It's a much slower process. If you promised to close in X days, your contract may very well expire during that time and then you could be out your EMD. You can also see private lenders or HML to speed up that process, but the interest will be higher.

If you do finance with HML, once you have it cash flowing and it can be appraised at a higher price, you might also be able to re-finance to get your cash out. This is effectively the BRRRR method.

@David Reo,

I'm not in CA, but I think there's value in learning in your own backyard.  Become an expert in your own area and network - a LOT!  So I suggest starting locally before you take on the extra complexities of doing this remotely. 

And if you do go virtually, make sure you have some good people in that area to work with.

@Michael A DeAngelo,

I like to use PropStream (you could use anything) to find good potential properties in an area, then feed them into Batch Geocode to map out an efficient way to drive those properties looking for signs of physical distress.  It's like stacking motivations.  As I drive them, I make notes of their condition and also look for anything else I might see on the way.

@Account Closed,

Don't you base that on your cost, not the value?  If I find a million dollar house, I can only rent it out for $2,000 per month, but I can buy it for $100,000, I'd call that a pretty good deal.

@Gregory A Miller,

Since you're talking wholesaling, do you have or at least know of buyers looking for deals like that, and does it fit their criteria?  I think that's what determines a good deal from a bad deal.

@Travon Billups,

If you're wholesaling, a good deal is one that investors want.  It's really that simple.  If you get to know your buyers, what they want, and where they want it, you'll know if you have a good deal.

Say Investor Joe says he's looking for SFHs in his County where the ARV is less than $500,000 and the repairs are less than $50,000, and they're willing to pay up to 60% of ARV under those terms. If you find a house that meets those conditions, it's a good deal. If you can only get it for 65% of ARV, then you're not meeting his terms and it's probably not a good deal (depending on his flexibility). If you can only get it for 75%, then you can be certain it's not a good deal for that investor.

Say Investor Bob has the same general criteria, but he has other exist strategies and he's willing to go up to 80%.  Now that 75% bad deal for Joe is a good deal for Bob.

Get to know your buyers and what their criteria are.

@Travon Billups,

Everyone here has provided good advice, and you should definitely consider all of it.

That said, your question was what happens if you can't find a buyer. 

Well, that depends on a few things.  First of all, what does your contract say?  Typically, you put down some earnest money so that if you can't close the deal, the owner gets the money.  Also, your contract most likely has some sort of escape clause.  Many people will refer to these as weasel clauses because of the negative connotation.  But the concept is that if you adhere to what's in the contract and exercise that clause, then you can get your deposit back and terminate the contract.

Now, not finding a buyer.  What is that all about?  Well, if you have a good deal in hand, you will find buyers.  Despite what you may think, it's true.  Investors will come out of the woodwork if you have an actual good deal.  They can be hard to come by, so investors will be chomping at the bit for your deal.  If it's a bad deal, however, you should be able to figure that out pretty quickly.  If all of the buyers you connect with say they don't want it, find out why.  Is it that the numbers are bad?  Is it in an area they won't touch?  Find out why and see if you can address that.  Either way, you should be able to tell way before 30 days are up.

And then there's honesty and transparency.  When negotiating with the seller, they should know what you're doing.  If you're not the end buyer, let them know that.  Tell them you work with a lot of investors and you're going to be assigning the deal to one of them.  Then if you come back to the seller and tell them you were wrong in your numbers and you need to cancel the deal or renegotiate, you're not surprising them.