Could use some advice on finding Investors!

Question

I am ready to start wholesaling and the best part about it is since I know so many people in my area I already have 2 real good deals . These homes are not even on the market and I can get them for a real good price ! That is if I just knew anyone I would be able to wholesale them to . Is there a way to look up investors ? A close friend of mine told me I could post an add up and build a buyers list that way . He told me he has over 20 and when he needs to assign a contract over he just emails them all the details and waits to hear back . What if you have 6 people wanting it ? Just tell the other 5 to take a hike ? Isn't that bad for a wholesalers reputation? The only question I will need answered after I get some buyers is that if one of my buyers wants to see a property while the seller still lives there is that a problem ? Or how does that work ? Also after I assign the contract then what ? Just wait for them to close or do I need to let the seller know I have assigned his home to another investor? What if I just sit back and the buyer backs out ? How am I to know ?

Chris Weiss · Answer

When I get the contracts drawn up from an investor friendly attorney, will I need to have that done every time or just once ? I am not sure how people get their contracts , but my friend gave me mine so I can print as needed . I would like to go the attorney rout just to be on the safe side , but I am sure that would get real expensive real fast !

Amberle Farthing · Answer

Those are great questions Chris!

Lets dive in.

You can build your buyers list a variety of ways. The easiest way to find a buyer is to have the property already under contract. If the numbers are good enough you will have buyers fighting over your deals! As your friend said you can create classified ads on sites like craigslist. I have found very good buyers that way. You can also attend your local REI Group/Association. That is where I found the majority of my buyers. They are active investor constantly looking for good deals. Once you get some skin in the game you start forming favorites whether it be because they close the quickest or give you more on assignments. You will begin to take it to those loyal buyers first. If they aren't interested you can send email blasts as your friend does! The way to get around telling the 5 out of 6 investors to "take a hike" is to notify everyone that you sent a blast and for them to bring their best offers. They all know the game and know that Real Estate is about first come first serve, the best deal, and the relationship. They will understand, just don't make any promises to anyone and be completely forthcoming!

You definitely should be verbalizing to the seller that you will need access to the property so you are able to do your due diligence and make sure all your ducks are in a row. After I sign a contract with a seller I usually run up the street to Walmart to make a copy of the keys. I and the owners agree on a notification time (usually 2 or 3 hours heads up) that I can call them you are coming for whatever reason. This usually only happens when the home is owner or tenant occupied as opposed to vacant obviously.

After you find your buyer and assign the contract if you've built up enough rapport with the buyer (takes time) he/she will cut you the check right there and you don't have to go to closing!

You should have a contract drawn up by a local INVESTOR FRIENDLY attorney. Get referrals for this at REIA. You should also be making your buyer drop enough $$$ in EMD or Assignment Fee where it will hurt him to lose it if he walks away (typically 5k). You should also have back up buyers that are aware they are back ups. Let them know you are under contract with this buyer but if it falls through then you have someone to fall back on without going through all that work again.

Hope this helped! Let me know if you have any other questions :)

Devin Morgan · Answer

If you're saying you can get them for a real good price I hope that's because you plugged the numbers into a formula that works for the end buyer, you, and the seller. What may be a good price to you may not be a good price to an investor, so I hope that was calculated and not guesstimated ;)

You find buyers by talking to people. Go to meetups. Tell everyone you know that you wholesale houses, get in good with a realtor, and just overall networking. No one will know you if no one knows you so just talk to people. As far as a property its up for grabs until a contract is signed and they have a EMD (earnest money deposit). Having multiple people want a property isnt bad, it's good. 1 that means your numbers are about right, and 2 that means you can potentially get more for it. If someone inquires about a property and it's already assigned don't tell them to take a hike just tell them that one was sold and keep them on the list for the next one.

I believe you should be pretty transparent with the seller from the start. They don't need to know what you're making but they should be aware that someone else may ultimately end up purchasing the property.

You get a EMD from the end buyer so you know they're serious about this property. With them having "skin in the game" it's not so easy to just hand someone money just because.