Comments on wholesaling

[Scott Harper]

I am not a wholesaler. At least I have never, but would if I were prepared and had the opportunity. I just thought I would write about a discussion I had with a young guy that was listening to a youtube pitch on a wholesale class that would teach him to make 70k a month assigning deals.

Maybe my discussion with him will help other newbies or maybe some of you wholesalers can correct me. 

I said, first you build your list of possible investors to sell to, by putting out fake bandit signs offering some super investor deal. When they call, you say that one is gone but I will put you on the email list. 2nd You get all of your forms ready in your binder. Your disclosures that you are not a Realtor. You disclose that you will be marketing to your network of investors for a quick sale but  at reduced price. (Cya) 3rd. The hard part, you lay out money to generate leads by direct mail or more bandit road signs." I buy houses". You buy and place these signs but the county workers might come behind you and take them down. However you go about it, you need to get leads of motivated sellers.

Finally you meet with the prospective home seller and determine their situation and need. You determine their level of motivation to sell. If they are highly motivated, you make them an offer that will allow you to assign the contract and at a lucrative price to your end investor. You also must get it cheap enough to give you a spread for your hard work. So, if ARV is 200k and it needs 20k in work to flip and the bird dog wholesaler wants 5 k spread. That whoesaler will have to get that house under an assignable contract for about 145 k or lower. The end investor wil need at least 30 k to reward him for financial risk and hard work on rehab.

The hard part is finding the motivated sellers that just want a quick sale with no agents involved and then getting the deal to the cinal closing table.

Does this basically sum it up? What have I left out or where am I wrong in my information to this friend?