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Updated 4 days ago, 12/30/2024
Questions when working with a new/unfamiliar wholesaler
As a new investor starting to look at wholesalers, what would be pertinent questions to ask about a specific deal? i.e. Condition, pictures, any financials they can provide. Is the property vacant? what are some other major red flag questions you might ask?
Thanks,
-Paul
Quote from @Paul H.:
As a new investor starting to look at wholesalers, what would be pertinent questions to ask about a specific deal? i.e. Condition, pictures, any financials they can provide. Is the property vacant? what are some other major red flag questions you might ask?
Thanks,
-Paul
Big red flag is one that doesn't let you do your own diligence. Just walk away if you sense they won't let you investigate any aspect of the property you wish to.
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#2 Marketing Your Property Contributor
- Flipper/Rehabber
- Wilton, CT
I don't buy from wholesalers, so I never had to ask anyone any questions, but if I WERE to buy from a wholesaler (eewww, do you know who you are talking to? Do you??), I would ask...
"Does the seller know you are wholesaling this property?"
If the answer is yes, keep this wholesaler on your list. Chances are you have someone with honor transparency and integrity on your hands and that is very rare.
If the answer is no... well, if he lied to the homeowner, why would you think he would not lie to you?
But I am a weirdo, don't listen to me! :)
- Jerryll Noorden
Paul, as licensed agents my team and I do our best to find out as much information from the seller as possible so that we can provide you with what we hope is a complete picture of the property. We then like to provide our clients with photos, tax information and comps. We do encourage doing your own due diligence even though we are providing all this info. We also double close so that we can guarantee you with a free and clear title. Hope this helps!
Quote from @Jesse Dominguez-Castelan:
Paul, as licensed agents my team and I do our best to find out as much information from the seller as possible so that we can provide you with what we hope is a complete picture of the property. We then like to provide our clients with photos, tax information and comps. We do encourage doing your own due diligence even though we are providing all this info. We also double close so that we can guarantee you with a free and clear title. Hope this helps!
Thank you for the reply @Jesse Dominguez-Castelan! Yes I would definitely do my own due diligence. The deals I've had sent to me very often are a bit on the ambitious side with comps and rehab estimates.
Quote from @Paul H.:
Quote from @Jesse Dominguez-Castelan:
Paul, as licensed agents my team and I do our best to find out as much information from the seller as possible so that we can provide you with what we hope is a complete picture of the property. We then like to provide our clients with photos, tax information and comps. We do encourage doing your own due diligence even though we are providing all this info. We also double close so that we can guarantee you with a free and clear title. Hope this helps!
Thank you for the reply @Jesse Dominguez-Castelan! Yes I would definitely do my own due diligence. The deals I've had sent to me very often are a bit on the ambitious side with comps and rehab estimates.
Depending on what resources are being used to find the comps they may be ambitious. Until whoever is sending you these opportunities has the conversation with you on how much you'd like to make on a deal, how you figure your ARV and how you plan a rehab/ costs they are likely going to continue sending you opportunities you won't find too appealing.
Quote from @Jesse Dominguez-Castelan:
Quote from @Paul H.:
Quote from @Jesse Dominguez-Castelan:
Paul, as licensed agents my team and I do our best to find out as much information from the seller as possible so that we can provide you with what we hope is a complete picture of the property. We then like to provide our clients with photos, tax information and comps. We do encourage doing your own due diligence even though we are providing all this info. We also double close so that we can guarantee you with a free and clear title. Hope this helps!
Thank you for the reply @Jesse Dominguez-Castelan! Yes I would definitely do my own due diligence. The deals I've had sent to me very often are a bit on the ambitious side with comps and rehab estimates.
Depending on what resources are being used to find the comps they may be ambitious. Until whoever is sending you these opportunities has the conversation with you on how much you'd like to make on a deal, how you figure your ARV and how you plan a rehab/ costs they are likely going to continue sending you opportunities you won't find too appealing.
Makes sense. Thanks @Jesse Dominguez-Castelan!
Hi Paul,
The main risk with buying a wholesale property is that they're usually sold as-is with no contingencies. Unless you are confident in estimating the renovations needed, I would highly recommend getting a contractor's professional opinion of the rehab costs. Ask your contractor to walk the property with you if they're available during the showing, or at least send them the photos and information that you received from the wholesaler to get their opinion.
In Pittsburgh a light or cosmetic renovation is about $20k, medium is $50k, and a full gut is $100k. You can get some estimates from contractors for what they charge for big ticket items like to renovate a bathroom, renovate a kitchen, replace the furnace, replace the roof, etc.
All wholesale deals should have free and clear title and you should be able to see the sales agreement before submitting the earnest money deposit. You should also have access inside the house in most cases. If the home is occupied, there's usually 1 group showing scheduled, so you'll want to come prepared with your comps and ARV.
When you go inside, you're verifying that the condition and estimated rehab costs match your expectations. There usually aren't photos of the basements and that's were most of the big ticket issues are. Check for cracks in the foundation, condition of the mechanicals, any water coming into the basement, etc.