New to Wholesaling, so many questions...!

[Chris Parsons]

Hey everyone,

I'm about two weeks into my start of wholesale real estate investing and am making progress but have so many questions when it comes to going under contract.
FYI the first portion of this post is not pertinent to the questions I have, just wanted to shed some light on what I've been up to.

To get you up to speed with where I'm at in my noob venture is:

I've been able to narrow my original area of 200 zip codes down to 50 which produce 60% of the flips. I did this following the biggerpockets youtube video on market research (phenomenal content by Anson) to find absentee purchasers in the last 12 months.
Here's the video:

From there I took the 50 zip codes and checked Realtor.com for two metrics:

- Number of houses sold in the last 12 months
- Number of houses sold in the last 12 months older than 1990

I then had a ratio of how how old the area was in the 50 zip codes AND the number of houses that were older in each zip code.
From there I also divided the number of old home sales in each zip code against the number of investor purchasers total to find a rough estimate of how active the zip codes were compared to one another.
To narrow down further, I cut the 50 to 33 by only choosing zip codes that had a ratio of >1% of total flips based on the above equation which brought me to 33 zip codes that should roughly contain the majority of flippable houses.

The fun hasn't stopped there though!

I wanted to get an idea of what houses were selling for at a wholesale value and what they were selling for after being flipped, as well as other general info of the area such as average year build, beds/baths, sqft, lot size and the amount of time it took for the property to go from purchased to sold.
For each zip code I ran through 3-6months of sold data on redfin searching for 6 flips (arbitrary number, just seemed right?) in each zip that took less than 1 year. I was able to find 6 flips in each zip code pretty easily, some less-so-than others but regardless I have my data included ranges and averages plus URLs to revisit the flips I used for my data.
I also set up redfin automatic notifications for houses that meet the average criteria for each zip code to hopefully be able to sift more efficiently through all MLS listings (I'm currently focused on MLS since I think it is the low-hanging fruit with all the tech we have at our fingertips).

I've been spending the last few days trying to learn deal analysis now that I had a decent overview of my market and am running into challenges but that's not the point of this post.
I guess I wanted to post about what I've been up to so far and will happily take any feed back for improvement!

My real question:
A property came up that fit my criteria and was very close by so I went to check it out after speaking with the listing agent and asking some general questions.

While my expected rehab budget seems high what really bothers me is how does the wholesale process work when working with an agent?

I live in Fort Collins, Colorado and Colorado has board approved contracts which do not require a lawyer when written up by an agent. I'm sure there are other states that do this (i think?).
Because I'm currently looking for deals on the MLS it makes sense for me to use an agent but I'm not sure how the wholesale portion comes in when that's the case.

Do I supply an additional contract specific to my wholesale agreement on top of the Contract to Buy and Sell Real Estate? 
Is there a clause I'm supposed to use instead?

I reviewed these two threads from BP which kind of answered these two questions:
https://www.biggerpockets.com/...
https://www.biggerpockets.com/...
If anything has changed since these two threads were made I'd love to know!

Does the agent I use still receive commission after the deal is assigned?
How do I get a POF letter for the offer when made?

Appreciate any direction on this, sorry for the long post as I'm not sure how these usually work lol.

[Michael J.]

Chris,

It can be difficult when just starting out to try and wholesale off the MLS. Most investors have access to MLS listed properties and have already seen everything that is available. You would need to get the property at a steep discount 50% or more to make it worthwhile for an investor to give it a look. Also having an agent involved can make the transaction more difficult as most agents don't understand wholesaling and thing you are breaking the law. Another thing to consider is they will want you to use the state specific contract which usually doesn't give you provisions for assigning it. As far as your question about the commission, the seller typically pays the agent commissions. As far as POF, you could have the contract drawn up that EMD and POF are delivered after your 14 day inspection period. This gives you 14 days to find a end buyer who can put up the EMD as well as the POF for you.