Finding Quality Wholesale Deals for Flips

[Scott E.]

Hello!

I've made so much progress since my last thread, and my business is finally established and ready to buy. A big thanks to BP forum members and the podcasts for helping to build my confidence.

I've grown my network of wholesalers over the course of the past couple of months, which has been rewarding. While I've found a couple that I foresee having long term business relationships with, I've still had a challenging time getting deals to my inbox. I have a few questions that I'm hoping the experienced rehabbers can help with:

1) How do YOU find quality deals, especially when starting out when your network is smaller?
(My strategy thus far has been to grow a list of wholesalers and have them bring the deals to me for a fee. Should I be taking any additional approaches?)

2) Is the "Offer = 70% ARV - Repairs" a realistic expectation anymore?
(I've run cost analysis on hundreds of deals by now, and no more than a handful have met this criteria. I wish I was able to take action on those few that did make sense, but my business was not ready for operation at that time.)

Thanks again!

[Dave Savage]

@Scott E. Congrats on making it this far and ready to take the next step. I think a lot of new rehabbers run into this situation - they may know the construction side and have the money ready but can't find a deal that pencils out. You have to remember two things about wholesalers:

1. Finding deals that pencil out -$5-10k for their commission is tough

2. Once they find these deals they will offer them to their existing network first - many of the people on their lists will buy the property sight unseen going off of their word, compared to somebody that is new that is going to want to walk the property, "think about it" for a week, etc. They want to move on to the next project so they take the easy money from someone they know.

3. "generally" if you are getting a property from a wholesaler when you are new it has probably been passed over by a few other more experienced investors. Sometimes this is because they are swamped with other projects - but in most cases it is because the numbers are tight.

What to do?

What I found I had to do was start my own marketing campaign and become a wholesaler to myself. Finding my own deals in the areas I am targeting while not cheap allows me to have some control over my deal flow. Think about starting your own marketing campaign - many examples of how to do this in BP. Over time as you start to find deals you might not want you can partner with local wholesalers and build some true trust with them and you might start to get deals from them.

Don't give up now, push through and find that first deal.