Driving for dollars to gain start up capital

[Thomas Grice]

Hello fellow Bigger Pockets members,

I am curious to know if Driving for dollars is a great idea to generate start up capital. My idea is that I would start out Driving for dollars and find a few homes that are great properties for investment situations. After finding potential properties I would then send letters to the owners if they were looking to sell. If yes, I would pass the potential property to an interested investor for a "finders fee" either before or after the transaction between the seller and investor is finalized. Is this idea one that can be used for start up capital or would this be considered as posing as a Realtor in legal eyes?

[Kevin Phu]

This investment strategy is called "wholesaling" and it's not as easy as it sounds. It takes lots of work and is pretty much a full time job. The experienced guys can chime in with more insight.

-You have to know how to market

-You need the money to market

-Know how to research the property 

-Track down the property owner if they are absentee owners

-Convince owner to sell it to you for a big discount

-Know how to correctly estimate ARV

-Ensure your contracts are legit and correct (lawyer fees)

-Find buyers

That's just a simple snapshot of what goes into wholesaling. I also believe it is illegal to wholesale in some states so I won't speak on that as I am unsure which states.