Wholesaling Starter Questions

[Andrew Davis]

Reading through a bit of the material in the wholesaling forum and have a few questions so far:

1. What is your process for wholesaling, assuming you've been successful? IE did you build a list or were you active in the market and found your connections led to wholesaling?
2. Is the MLS system useless in building a list of homes due to Realtor agreements (meaning the Realtor attached to the listing has exclusive rights on the property)?
3. How much evaluation/analysis do you perform on properties that you find when building a seller's list (for example, an owner calls after receiving your mailer with a price, do you visit the property before responding, rely on your knowledge of comps in the area, etc)?
4. What software, if any, do you use to build lists (aside from the obvious like Excel or Access)?
5. Would you recommend purchasing a sellers/buyers list, and if so, where would I find lists (for instance, InfoUSA has huge mailing databases, but I don't know how helpful they'd be in this case)?
6. What legal documents do I need for wholesaling? I plan to do any business through a pre-existing LLC. I know at a minimum that I'll need a contract with the seller, but what should I do when reaching out to buyers (NDA, etc)?
7. Last but most important: What would you do differently if you had to start over?

[Scott Costello]

@Andrew Davis Woh! That is a lot of questions that require a lot of attention. you might be better off breaking each question up into a separate post.

1) I first bought my probate list from a local investor who was selling them. Good list but he stopped selling them after about a year. I then went to the courthouse and got the probate list myself. I also got lists from tax records.

2) MLS is okay, but there is a reason many cash buyers say they are looking for houses "not on the mls". This isn't saying you can't find success using the mls.

3) After I get a call from a seller I'll pull comps, take a look at other properties I may have wholesaled in the area and take a look at pictures of the house if any online. I'll also take a look at it on google earth/bing maps. I do this to come up with a preliminary offer to see if the seller is acceptable to the type of offer I'm going to give them.

4) I developed my own software because I couldn't afford products already out there.

5) Definitely worth buying a list. @Seth Williams has a good blog post about this topic. http://retipster.com/findingmotivatedsellers1/

6) I don't know if I do this the "Wise Way", but for sellers I just use the standard NJ real estate contract. For buyers I usually deal with guys that I have worked with before so I don't use an NDA. Besides I have the house under contract before I advertise them to buyers. You will need some sort of contract for them to sign that says you are assigning the sale contract to them at closing. This contract will be simple but have your assignment fee and deposit amounts on it.

7) If I were to start over I wouldn't worry about all the details like contracts and LLC and such until I needed to worry about them. I'd just get started sending out letters and trying to bring in seller calls.

Hope that helps.