Wholesaling in Greater Sacramento

[Debby Chen]

Hello Everyone!  I am new to real estate investing and would appreciate any advice/recommendation you can provide regarding the best areas for wholesaling in Greater Sacramento.  I would not wholesale any properties I would not feel comfortable to fix & flip or buy & hold myself.  With that said, I am looking for A/B neighborhoods with decent amount of fix & flip activities.  I am also looking for investor friendly agents to work with if you know anyone.  Thank you!! :) 

[Rick Snow]

Hey Debby, 

Welcome to BP! 

I am a Sacramento based investor and often work with Sacramento based wholesalers. Wholesaling can be difficult and frustrating, but if you stick to it I'm sure you can build a good book of business. 

Getting properties under contract (at the right price) can be very tricky and time consuming.  I know wholesalers who have focused their entire business model around getting properties under contract at a price that is attractive to investors.  If you get properties under contract at the right price you will easily become a gold-mine to other investors and rest comfortably knowing you will get the assignment.   

1) FINDING BUYERS 

Getting properties under contract begins with what I call your "Web of Influence".  You need to attend networking groups and find buyers, before you start acquiring properties. Get to know 5-10 investors really well and either write down their investment criteria or create a webform for them to submit their criteria to you and keep that information on file.  Once you have a property under contract you now have potential buyers lined up, instead of getting a property and hoping to find a buyer.  

2) GENERATING LEADS 

Yellow letter campaigns, bandit signs, billboards and yard signs can help you generate leads but I think your best bet is to advertise yourself as the "expert" in your neighborhood on buying houses.  Put your "we buy houses" yard sign out and grab a few business cards when your out walking your dog.  Start with your neighborhood and get to know each street. Check out properties as you walk your dog and chit/chat with the mail delivery person as they are performing their route. Mail carriers know the vacant properties and can be a good source of leads. You might also consider investing in a data migration tool like propertyradar 

3) ASSIGNING THE CONTRACT 

The biggest frustration I have with wholesalers is valuation ignorance. What I mean by this is wholesaling a property for $275,000 with $25,000 in rehab on a $325,000 ARV simply doesn't work for most investors. Most investors are looking for 70% ARV (which includes rehab) - I know this has been the topic of much debate but if a property is at 70% ARV but requires 100% of it's ARV value in rehab then that doesn't make sense - does it. Negotiate your contracts to be as close to 70% ARV (all-in) and you will have investors lining up to buy your contracts. Also, make sure you do your research on the property. An "Authorization to Release Information" form should be secured - especially if the homeowner mentions there are seconds taken out on the property.

There is a tidal wave of information on wholesaling on the BP site. Also, tons more online.  I'd say, get to know 5-10 investors really well but partner with 1 specifically and volunteer your services with an already existing wholesaler who needs help bird-dogging leads.  If they give you the lead, and you get the contract, you might be able to split the assignment. 

"Areas" of Sacramento/greater Sacramento are usually not a concern to Investors.  Price is. Some investors like the A/B $400K+ homes, some like the $150K price range.  If you're getting the properties under contract at 70% most investors are going to snatch those up very quickly.  Network to find a buyer then look for homes that match their criteria and you will be ok.   

Good luck Debby and happy investing! 

Rick