Wholesaling to landlords

[Elijah K.]

Taking a cue from BP I called some (many actually) FOR RENT signs and asked the owner if they would be willing to sell. Three people said that they would. One in particular has six duplexes and eight quads. All of them have tenants except for one of the duplexes.

My position in looking at these properties would be to wholesale them to another landlord. However, being that I never done a wholesale before, I don't know what I should be asking that would be relevant to an investor. Also, how would I go about finding comps for these properties, aside from finding a realtor to pull from the MLS?

Any advice would be greatly appreciated.

[Nathan Emmert]

Elijah, selling to a landlord means you're selling to another investor, you're going to have to be more savvy, finding off market properties is a good way to start.

As a buy and hold landlord investor, I'm looking at 2 things when I evaluate a property. Rent to Price ratio... and price to appraisal value ratio.

So here's an example. You have two properties, both for $100k that would appraise for $120k. The first rents for $1,600 a month... the second for $1,300. Intuitively, I like the first.

Or, you can have two $100,000 properties, both rent for $1,600 a month.. one appraises for $120,000... the second for $140,000. Intuitively, I like the second.

The confusing part is when one would appraise better (purchased equity) and the other would rent better. But lets ignore that for now for simplicity.

Get a feel for what FMV is on a per unit or per rental dollar rate in your target area, sort of a CAP Rate. If you can beat that handsomely and offer these to landlords, they'll be interested. If there's a local apartment association, you'll have a very good networking opportunity for buyers.