All Forum Posts by: Chris Piper

You're welcome @Hannah Canario. There aren't any risks per se to being a wholesaler. If your husband is worried about you getting sued being a wholesaler, I would suggest you form an LLC. Definitely not necessary, but if it makes him feel better then why not. I would also suggest if you do form an LLC such as Canario Investments LLC, that you incorporate in either Deleware or Neveada where they don't collect ANY corporate taxes. You don't need to live in a state to incorporate there. You just need a registered agent acting on your behalf. If you go through Inc Now(I have used them and would recommend them), It's around $250, and includes a registered agent in the state of incorporation for one year. Then it's around $100 per year for the agent.

Back to the risks of wholesaling. As I said, there aren't any really. Here are some minor risks, but I wouldn't really call them risks. 1. You put a property under contract and can't sell it by the closing date. It sucks, but it happens. As long as you put contingencies to allow you to back out of a deal, then it's no problem. You want to make sure you figure out all the numbers on a property before making an offer to make sure it's a good deal. I wouldn't recommend making a habit out of backing out of deals, or no one will take you seriously as a wholesaler. The numbers are VERY important to know before putting a deal under contract and to know your MPP(max purchase price). Cash buyers will not take you seriously if you estimate repairs at $10K on a deal and they turn out to be $30K. 2. A cash buyer goes around you and cuts you out of a deal. Again, it sucks but it does happen. In that case, you simply never work with that buyer again. 

Other than that, keep in mind to start wholesaling, you need deals. You need motivate sellers blowing up your phone begging you to take their house. If they're not motivated, then you do not want to work with them. You'll only get great deals by working with motivated sellers who will sell to you at deeply discounted prices because of whatever situation they are in. Bandit signs work well for cash buyers and motivated sellers. Also, to find HOT markets where cash buyers are buying, check out my post https://www.biggerpockets.com/forums/93/topics/249804-this-is-how-to-find-the-hot-markets-in-your-area-for-free. Some people think it's better to build a buyer's list first, then get deals under contract. It's kind of a catch 22. In the end, you need deals first to get moving. Regardless, you should always be looking for motivated sellers, and cash buyers. Once you start building a buyer's list, when you get a deal under contact, you just email your buyers, and wait for the phone to ring. If you have any other questions, let me know.

You're welcome @Adrian Rice. If you are strictly wholesaling in your market and it's a small market, just go with the results with the highest numbers even though they may be in the low hundreds. Otherwise, you could wholesale in the next closest bigger city near you where you might find higher numbers.

An agent will chew up your profits. There isn't a need for a realtor as a wholesaler other than possibly getting access to the MLS for yourself.

As long as you know your MPP(Max Purchase Price), then it shouldn't be a big deal. There might be a little wiggle room to negotiate, but if you stay under your MPP, no need to be greedy. There is plenty of profit out there for everyone.

No need to spend time getting contract notorized. 

Virtual wholesaling is possible and do-able. With technology now, all you need is a smartphone. The only difference is that you will need to ballpark the repairs. If a seller says the house is perfect, expect at least $10K in repairs. Otherwise, figure $20-$30 per square foot for rehab costs. I'm sure you will be able to fine tune this with practice in a given area. But that is the safest way to estimate without seeing a property. Coogle "Virtual Wholesaling 3.0." It's a pretty simple system that shows you how to wholesale from anywhere with just your cell phone or a laptop.

Always find motivated sellers first. In order to be respected, you need to follow through, deliver, leave plenty of margin for the cash buyer, and make sure you have accurate numbers. Nothing will give you a bad reputation like trying to sell properties where your numbers are wrong. 

For example, if you tell a cash buyer that you have a house for sale for $50K. The ARV is $90K, and it needs $10K in repairs. That means they are expecting to profit roughly $25K after repairs and holding costs. If they check out the property, and see that it actually needs $25K in repairs, you just lost them and their respect.

Don't be greedy with your assignment fees, always make sure your repair costs are in the ballpark, and always make sure you leave $10K-$25K in profit for the cash buyer depending on what each cash buyer typically expects to make per deal(ask them how much they need to make and make note of it in your cash buyer spreadsheet).

When you find out what cash buyers want first, then go find those properties, it's call "Reverse Wholesaling." It's good to know that stuff to only contract on the types of properties your cash buyers want. When you get a property under contract and start marketing it and putting up bandit signs near the property, you will start getting calls from buyers. Always get a name, phone number, and an email address from them. Add them to your list unless their a one-time retail buyer. Then next time, you will already have some cash buyers lined up, and just keep doing the same thing and adding more and more to your list.

Mary B, why waste your time doing that? One, just becasue properties have a short time of DOM, they might be in all different zip codes which doesn't help you. And two, why wait for an agent to do that? Agents are busy, and you're a wholesaler who they aren't getting a commission from. I doubt they want to waste their time to help you out. Plus, you can do my method for free, and it will tell you for certain the best areas to focus on, and just takes a minute or two to find out.

Wholetailing is just whoesaling, but instead of selling to a cash buyer, you are selling to a retail buyer. In this case, you need to actually close on the property in the time frame you put in your offer. So, you would need to get hard money, or a private lender to close and/or cver the cost of repairs you may need to make.

The down side is you have to find the funds to close on the property and hold it a little longer than a typical wholesale deal, plus pay interest and points on the money. But the upside is the profit. Instead of contracting on a house for $40K that has an ARV of $80K and selling to a cash buyer for $45K making you $5K, now you might pay $3K to borrow the money to close and for repairs, but you can sell it retail for $80K and make almost $40K in profit. So, you don't need any special contract to wholetail. Just use your standard purchase agreement just like you would for a normal wholesale deal.

Davey, have you used Podio? It's free. And if you have a virtual assistant, this is good free choice to have a smooth contact transition between yourself and your VA.