All Forum Posts by: Steven Leigh

Listen to a lot of podcasts and watch a lot of Youtube videos to get your head around the basic concepts. Read up on some resources online. Ask questions in this forum when things don't make sense to you. You'll start to build your knowledge quickly.

Here are a few of my favorite podcasts and resources:

Investor Grit podcast (Tom Krol and Cody are amazing)

Sean Terry - He has a podcast that is no longer really updated, but listen to old episodes. He also has a good Youtube channel.

Also check out the times when Tom Krol was a guest on other podcasts, such as Bigger Pockets, Investor Carrot, etc. He gives away a lot of great info!

https://www.youtube.com/results?search_query=tom+k...

A word of warning, don't get too stuck on any one "method". For example, Sean Terry pitches a lot of services and sites, probably because they pay him a kickback. Don't assume that what he recommends is the best. Do your research. Just try to learn the general process instead of getting stuck on specific methods.

Good luck!

@Jessica Zolotorofe That's great info. Sounds like you know your way around Ohio as well. I didn't mean to imply that a title company is the only way, and you make excellent points. Thanks for the info!

@Alexander Alguire Where are you finding these deals? On the MLS? Anything you find on the MLS that seems like a "deal" and has been sitting there is NOT a deal. Otherwise, every investor in town would have snagged it already.

The same goes for Craigslist. In fact, most of the "deals" on Craigslist are actually fake properties listed by wholesalers to try and lure cash buyers to contact them. There are some deals to be found on Craigslist, but they are few and far between.

If you're finding deals somewhere else where they might not be as noticed by others, you may have something. But wholesaling generally involves marketing to find properties that no one else has found yet. That's what creates the demand.

It's good that @Rick H. is on the case, as he knows more about the probate issues than most.

But I seriously doubt this deal could work out. With 61k in debt on the house, you would need to get that all the way down to 32k? I seriously doubt it.

Just make sure you don't "cook" the numbers on yourself to "try and make it work so that you can help out the seller". I've done it before and believe me, there is nothing but pain for all involved when the deal doesn't work out.

You're welcome @Nick Zocher, just send me my cut when you turn some of those into huge deals! :)

@Jessica Zolotorofe I think in New Jersey it's common practice to use an attorney for escrow, but in Ohio it's almost exclusively a title company for real estate transactions. Personally, I would NEVER do a wholesale deal without using a title company. I wouldn't want to get caught with a bunch of liens or something that didn't get noticed, and all of a sudden I'm in legal trouble. 

All of the costs for title insurance, closing, etc. should be the buyer's responsibility in your initial contract (YOU) which then gets assigned and becomes the end buyer's responsibility. So you are never on the hook for these costs. You just need to make sure the buyer knows this when you're negotiating a price with them. They want to be expecting these costs.

@Renee Tepper If the deal is good enough that you would buy it at the price that you will be wholesaling it, then you shouldn't have a problem finding a buyer.

You should definitely be upfront with the seller about your intentions. Tell them that you are either going to fix it and flip it yourself, or you may pass it along to a partner, but either way, his price will stay the same, as will the closing date, etc. Give yourself a good 30 days or so on the contract in case of delays or trouble finding a buyer, etc.

Worst case scenario you can always just assign it to someone else at the same price you have it under contract for. Even though you won't make anything, at least you can help the seller get it sold and honor your agreement.

@Aaron Hoye Sean Terry has a great comp calculator and a good system for doing a quick analysis. I will say that the "Offer Price" always comes in WAY too low to be useful in my market, but if you look at the "Sell Price" for 70% of ARV and subtract your wholesale fee, that gives you a good idea of what your maximum offer could be. You'll understand what I mean after you watch the video.

https://www.youtube.com/watch?v=Cqgz5OpqvNU

The other thing is, you might have to adjust the repair numbers up or down for your market, as markets can be pretty different for repair costs.

As for finding an offer that will "get accepted" I agree with Brent. MOST of your offers won't be accepted. Just realize that upfront. 95% of people are going to sell their house at near-market value with a realtor and you will make an offer to some of these people and get laughed at or cussed at. You are looking for the 5%. It's a numbers game. You have to go through enough calls and make enough offers that you find a TRULY motivated seller who would rather have the convenience and ease and other benefits you can offer than they would the full market value of the house. Believe me, they are out there, but it takes time and grit to find them. The average is a 4% return rate on mailers, for example, and the average is about 40 calls to get 1 workable wholesale deal. So figure you need to mail to about 1,000 people to get 40 calls to get 1 deal. That means on average you will have your offer rejected 39 out of 40 times. But the good news is that 1 will likely make it all worth it if you have the guts to power through! Honestly, most people don't, which is why people say wholesaling doesn't work.

Good luck!

Here are the basics:

1. Agree to a price and sign a Contract to Purchase with the seller.

2. Find your buyer and agree to a higher price, and sign an Assignment of Contract with the buyer. This assigns your Contract to Purchase to them. It's a good idea to collect a non-refundable deposit from your buyer that you keep if they back out ($500-2,000) but it's not required to make it legal. You keep the difference between the original price and the buyer's price as your assignment fee. Usually the deposit just applies forward to this when you close.

3. Register both contracts with the title company and have them open up escrow and start the purchase. You want a title company who understands wholesaling and assignment fees or they might screw it up.

The purpose of the title company for "simple wholesale deals" is that you can't really buy and sell a house without a title company. :) There is a lot that goes into the process, including making sure the house is actually owned by the seller, handling all of the money, having an attorney do the title transfer, etc. Were you planning to do all that yourself? :)

@Patrick Philip

You're not really giving enough information to analyze anything here. 

What kind of letter or mailer did you send? 

What kind of envelope?

What was your criteria when you built your own list? 

Did you mail to the mailing address instead of the property address?

How many mailers did you send out?

How many calls did you get back?