All Forum Posts by: Steven Leigh

Every wholesaler in your area would LOVE to put you on their buyers list, so you'll have no trouble connecting with them if you are looking. 

I don't know that you really need to try to qualify them, just get on as many buyers lists as possible. Then you have lots of deals coming to you throughout the week. Some will be terrible, some might be exactly what you're looking for. If you find that some wholesalers are consistently sending you bad deals, don't even bother telling them to stop, just filter their email address to the trash. The good ones will prove themselves.

Having said that, be ready to jump on a good deal and make a quick decision! Nothing annoys me more than supposed "cash buyers" who contact me about a deal two weeks after I sent it out. I'm like, "Yeah, that house was gone in 12 hours. Get back to me a little quicker next time." :)

Try this first. You want to look at SOLD comps in the area, not listings, not history, etc.

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

Since it needs a lot of work, estimate the repair costs on the high end with the spreadsheet. Also realize the dollar values may need to be increased or decreased for your area, so this is just a broad idea.

It's probably a good idea to have a contractor come do a walkthrough with you and at least give you a ballpark estimate too. Then you'll have a better idea of whether you can make any money on the deal. Investors will probably want at least 30% as profit for a rehab and flip. So take the after repair value (ARV) from the comps, and figure on selling it for 70% of that number minus the repairs, minus your fee. That is your max price.

@Robert Laird Exactly, it keeps it simple. This also speaks to a point I was making in another thread. I had a conversation with another wholesaler who does a lot of direct mail. We were talking about how it all comes down to timing, rather than which mail piece is best, which color of paper, etc. If your mail piece happens to come when they are deciding they might want to sell or realizing that they NEED to sell, they will call you. In fact, I joked that if they are a REALLY motivated seller, you could just about send them a letter that says, "You're an idiot! Now sell me your house!" and they would still call. :)

What's your criteria for the absentee list? Are you filtering equity of at least 40% and market sale date of at least 5 years?

Also, don't overlook owner-occupied with equity. They can be a little harder to deal with as they are tougher to show, but you can find some really great deals.

@Brent Hill Aren't these good questions to ask Michael or your coach? I ask that a little bit facetiously, because I couldn't really get good answers out of them for the short time I was in the program, but in all seriousness if you are having problems wholetailing they should be answering your questions and helping you solve these problems.

Sometimes this is a state-by-state thing. Some states require all deals to use an attorney, while you can use a title company in the majority of state. I use a title company because it's much less expensive, quicker, and I can build a good relationship with them over time and they appreciate my business. Maybe I could do that with an attorney too, but I really like my title agent.

Another benefit is that my title agent won't charge me for title search if a deal falls through. I'm not sure an attorney would ever do anything without charging for it. :)

He may have gotten it from the FilePlace. Go to Tools - FilePlace here on Bigger Pockets. Lots of contracts and forms for free.

And yes, I just use a 1-page purchase contract as well. Unless your state has a lot of weird restrictions (FL doesn't I don't think) then a simple purchase contract is all that is needed.

I would talk to title companies you are thinking of working with and have them look at your contracts. They are usually pretty knowledgable as they work with investors all day long, and sometimes they might even have contracts they would prefer you use.

@Matt A. I agree with some of the above posters. You're probably too late for this one.

But just put the question to her like this: I know you've started doing the repairs already, but what if I were willing to buy it for cash, right now. If I buy the house as-is, and we can close in XX days, what is the best price you could do if I pay the closing costs and there are no realtor fees?

Then just be quiet and let her talk. Don't interrupt and don't justify. Just listen. When she gives a price, be silent for a moment, and sound a little surprised that it was so high. 

Then come back with "Is that the best you could do?" Again, be quiet and let her talk. She will almost ALWAYS come down from her first number.

Now, look at her number and the number you need to hit. If the gap is fairly small, keep pursuing it. If it's larger, just say you would have to get it for quite a bit lower than that, so going with a realtor is probably her better option, and just wish her luck.

P.S. I have had so many sellers call me back weeks later after I backed away and told them going with a realtor was the better option. Not saying that will happen here, but sometimes it's better to back away than to try and chase them. Sometimes you're the best option and sometimes you're not.

So people who sell their house for less than market value or don't use realtors are just dumb?

That's funny. Of all the sellers for my wholesale deals, I don't think I would call a single one of them dumb. In fact, some of them were probably a lot smarter than me. 

What they were is motivated. The 78-year old who inherited 40 rental houses from her late husband and just wanted to be done with them and do some traveling. The young couple who moved to Denver, thought they should keep their previous house and turn it into a rental, had it all go south on them, and chose to just sell it for what they owed and be done with it.

95% of houses sell on the MLS with a realtor for close to market value. Wholesalers are looking for the other 5%. These sellers are willing to trade convenience, speed, and solutions to a greater problem for some of the value of their house. This doesn't make any of them stupid.

@Kevin Walker Your first question should be: Would you like me to make you a bunch of money? :)

Seriously, though, realize that you should be screening THEM, not the other way around. I don't know why you would ever need them to ACCEPT your business. They need to convince you that they can serve your needs.

Call a few in your area. Ask them if they are comfortable doing wholesale assignments and/or double closings. Then ask if they have done any recently. A lot of them will SAY they can do it, but then you find out they haven't ever done it, or very rarely.

Ask them how they handle the HUD for assignments, whether they can keep the assignment fee off the seller's copy of the HUD, and whether they stage the buyer and seller to sign separately. (To clarify, my sellers always know I'm making money on the deal. I'm very upfront about it. I just prefer it if they don't see the actual amount.)

Another good idea is to go to a REIA meeting or other networking meeting in your area, and ask what title company investors use. Finding some that are investor-friendly gives you a good place to start. You can also post on Bigger Pockets asking for recommendations in your area.

Good luck!