Where are my Wholesaler's at?

Question

What's up BP?

I'm in the market to pick up 2 or 3 flip properties right now. I'm a licensed agent, and active investor. Looking for a couple single family homes in Pierce or King County.

Please put me on your buyers list! My contact info is in my profile.

Feel free to reach out, I'm ready to pull the trigger!

Right now, the only criteria I want to give you is the property needs to net at least $40,000 after taxes and expenses. Aside from that, I'll look at anything you've got.

Jay Hinrichs · Answer

Gentlemen @Jan Wanot  I am active in a few markets including PDX.. I can count on one hand the amount of deals that have come from wholesalers.... in the PDX market Zero.  One wholesaler sold a super rough house for us.   That's it.   The deals are too skinny and too competitive here.. you need to get them yourself.

My wife picks up a rehabber with more profit than James is talking about  Each quarter right here in PDX right off of MLS... MLS or your own mail campaign is the way to go.

rely on newbie wholeslaers and you could be waiting a very long time.  why put your future income in the hands of these folks.. LOL... never quite understood that.

I was just thinking also about my activities in charelston SC  we have been there 4 years now on our 20 plus new build.. and half a dozen reno's  total of ONE came from wholesaler rest right off of MLS.

James Marszalek · Answer

Outrageous? I don't think so. If you want to talk about averages, that's cool. But I don't deal in averages, I deal in niches. Targeted plans that can be replicated in any market. $40,000 profit margins are achievable, but as you know, rule 1 is you have to buy it right, right? Am I going to find this kind of a deal while I flip through the REO's and short sales on the MLS when I'm wearing my real estate hat? No, probably not. But lucky for me, I put a lot of time, money, and effort marketing to my niche. Not to mention my team of Outside Sales Agents who bring me motivated sellers. I could care less about any average.

My deals are 500 piece puzzles that get put together without seeing the front of the box. I don't have to take huge risks, and nor would I. I operate on a 90% preparation, 10% execution model. Before I put an offer on a house, I know everything there is to know about that property. Between me being a licensed agent, and having built relationships with appraisers to learn about what and how they apply a market value to a property, my ARV's are as close as you can get. Your post screams of someone who thinks inside the box. I don't say that to demean you, only to let you know that there's other and better ways of doing things that falling within the rule of averages.

Rudy Manna · Answer

@James Marszalek  @Jan Wanot

$40K profit after selling costs is outrageous in Tacoma market where the average price is around $250K. Those kind of margin simply doesn't exist. Either you will be waiting a long time, or take huge risks, or base your numbers on ARV estimates that are super inflated. Will love to hear if people are having consistent success, or its one off, occasional getting lucky kind of flip.

We work on BRRRR with 20% margin (excluding selling costs of course) and 1% cash flow, and though getting difficult, is replicable with little perseverance. Holding costs are much lower in BRRRRs. We are picking one or more houses per month. Will see how the year goes.

And, yes, wholesalers please send me your deals.

Tasha McGlashan · Answer

Hi Rudy. I will admit that I am new to wholesaling and after reading these responses, I can understand why wholesalers can leave a bad taste in someone's mouth. Although we live in a world where people's words don't mean anything anymore, I can assure you that I have nothing to gain by being dishonest and over-inflating costs. I'm a 100% believer of karma and I don't need that kicking me in the ass in the financial department!

I want to learn wholesaling as a stepping stone to possibly flip homes on my own. I'm not going to lie, I love HGTV's Fixer Upper, Love It or List It and Property Brothers. I love seeing the entire process of what a nearly debilitated home can look like after repairs. It's extremely gratifying to see  a family move into their new home after taking on a fixer upper, for example.

Having said that, I would love to help you. I'm good at research. Let me know the type of properties that you are looking for, how much max you are willing to purchase, the ARV you are expecting and anything else you want me to know. I want to learn the whole process from A-Z.

As for other buyers, if you need help, I'm here for you!

Sincerely,

Tasha

Rudy Manna · Answer

Yes.. Flipping is definitely possible in Shoreline, Bothell all the way upto Everett. But in Tacoma-Puyallup-Lakewood market its a high risk low return scenario. I personally know 3 projects  where the principals either ended up renting or losing money.

1. Margins are very low, hardly 10% of ARV. One surprise during renno or additional few months of holding, there goes all your margin.

2. Try pushing the value by high end upgrades and your customer base become so thin that its going to sit in the market for a long time. There are not that many deep pocket buyers in the Tacoma market ready to pay premium price.

3. An empty house in Tacoma sitting in the market for 3-4 months have huge vandalism risk.

Rudy Manna · Answer

Here is the posting on a recent BRRRR in Tacoma Market..

https://www.biggerpockets.com/forums/223/topics/41...

Scott S. · Answer

South end maybe but not the North end.  An investor just recently picked up a SFH in the North End at auction for $300k and closed just 4 months later for $450K+.  I saw the home and it didn't need $150k worth of work.

Jan Wanot · Answer

@Jay Hinrichs, while I haven't seen a single deal from a wholesaler after reviewing many, I'm also not yet an expert in keeping in touch with the many that are out there. I think that is important.Another potential differentiating factor in getting the actual deals from wholesalers is having a brand around your business, so that you're the first they call with a deal. My friends at Fixated Real Estate seem to have quite a lot of success with both of the above, and mentioned that a MAJORITY of their deals come from wholesalers. I can't tag them, but they do high volume flipping based on those strategies, and I'm sure more that I'm not aware of :)I will say that I have personally wholesaled a property that was in fact a great deal, but I only sent it to 3 people. How did I choose those 3? I talked to them in person THAT week, and knew they had cash and interest. A testament to my first point.

@Rudy Manna can you give us an example using numbers for an actual deal, or fabricated numbers for your BRRR deals?interested in numbers related to acquisition, rehab, refi, and what you mean by 20% margin.Cheers guys!

Jarvis Smith · Answer

@James Marszalek I'm in the same boat. I've been trying to pick up some deals from wholesalers in the Tacoma or south King county area for a couple months now. I would say 90% of the deals that have gotten presented to me don't pencil out one bit and they are asking for 10-15k assignment fees. They may be new wholesalers I'm just shocked if people are actually buying these deals. At best most of them are break evens or maybe profit 10k or so. 40k profit would be extremely hard to find from a wholesaler in my opinion. I'm starting my own mail campaign Monday. We'll see how that goes.

James Marszalek · Answer

@Jay Hinrichs, I don't disagree with you at all, actually. I've got multiple sources active right now. I figured Wholesalers could be another avenue, but like most have found it hasn't been a great time for wholesaling lately. Great insight Jay.

Where are my Wholesaler's at?

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