Is it Possible to Wholesale an on Market Deal?

Question

Hello All!

I'm new to this community and have a ton of questions regarding wholesaling in RE.

There is a home by me that I am interested in, it's in a great town and I know that it can produce a great profit for investors. The only problem for me is that it is currently on the market. As a newbie I have no cash to front the deal if I were to wholesale it (being that I have no POF for an all cash offer), but I was wondering if there is another way I could somehow get the deal under contract? or possibly present the location to an investor for a small profit?

I would love and truly appreciate any ideas!

Thank you for taking your time to read and reply to my post!

Eric Janson · Answer

@Jennifer

@Jennifer Quevedo to answer your questions.  No, I have not had anyone wholesale a property that I sold.  I would recommend that you first find an agent who is knowledgeable about investment properties and wholesaling.  Best place to find one would be at a local REIA.  I would then just let them know what you are doing. Most agents are not going to run away from closing a deal as long as it is done lawfully and ethically.  I have wholesaled several deals (before I was a Real Estate Agent) where a Real Estate Agent was involved in the transaction.  Sometimes, I just had to explain to them what was happening and how it all worked.  They are not always familiar with the concept.

Once you find the right agent, they will have no problem doing business with you.  Just find someone that you can trust and do whatever you can to protect your interest.  The wrong agent will do the first deal with you and then they might just go to your investor for future deals.  Something to be cautious of.

Jennifer Quevedo · Answer

@Will Barnard Thank you so much for your reply!

I am almostttt sure that it would be an amazing deal if I could get the price to come down. Another one that's similar to the home that prompted me to post this discussion was just posted and I am SWEATING! I need to do what you suggested and connect with investors in my area ASAP.

As for the staying to learn the rehab business- that's my plan! I would love to one day be able to buy and flip homes for a profit. I know that some people have given the wholesalers a bad rep but I truly want to do things right and once I have a good amount of capital my intend is to move on to the rehab business.

Thank you!

Jennifer Quevedo · Answer

@Eric Janson Thank you so much for your insight! I see that you're a real estate agent, have you ever had someone try to wholesale one of your listings? If so, how would you recommend I approach certain real estate agents if I come across a good deal and a have a buyer ready to purchase for a lower price?

Jennifer Quevedo · Answer

@Sean Muldrow Thank you so much for your swift response! I'll definitely take your points and further educate myself on this matter!! :)

Will Barnard · Answer

Is it possible, yes. Is it common, no. Will most list agents take issue with it if you disclose your actual intentions, probably. Good and successful wholesalers add value. What value are you bringing to the table with an on market property anyone can view online in 30 seconds? If it really is a great deal for an investor, why is it not pending? How many days on market so far? You have to answer some questions to yourself to see if this really is a deal an investor would want. If that answer somehow is yes, then you should find the buyer first, provide the numbers of the deal first (no address) and ask if they agree to those numbers once they see the home, what will they pay you for it. Get that in writing, then give them the details of the property and let them deal direct with the seller/list agent. Or, start a new entity with your new buyer and make offers in the name of that entity with your "partner's" POF where you have an agreement in writing to fees to you for each closed deal. Perhaps you only take 5%-10% of the company shares at close, stay on to learn the rehab business and gain real experience so you can then do it yourself someday soon after. . . .

Eric Janson · Answer

Yes, you can, but it is a little tricky.  You can use Transactional funding to get a POF letter.  This works and will give you the ability to make a cash offer on it. You want to put as little Earnest Money in it as possible. When you have it under contract, you can look to wholesale it during your inspection period.  Works best if it is vacant since other investors will be taking a look at it.  You will want to get it well below the list price, otherwise most investors won't want to buy it because they are not getting a deal if you have it under contract at list price or above.  They figure they could have just bought it themselves at list price.

This method can work, but it can upset the agent and the seller if you can't perform.  Also, I don't think it is right to put an on market property under contract when you really don't have any intention on buying it. The seller might miss out on a buyer because you had it tied up.  It is best if you could pull in a partner who could fund it if you can't wholesale it.  That way you are not canceling the contract.

Sean Muldrow · Answer

You can wholesale on market deals, yes. There's a bit more to it since it's on the market and your investor could see the property themselves by searching it but as long as it's a good deal and you found it, it may not matter. You're almost bird dogging the property for them. Regarding getting it under contract, you may have to be upfront with the realtor about what you're doing to an extent but it can certainly be done if you ask the realtor to represent you as the buyer, if your state allows it, it's a good way to get tight with realtors when doing on market deals.

Is it Possible to Wholesale an on Market Deal?

Most Popular Reply