Kansas City, MO · Member since 2008 · 35 posts · 1 vote
Ive been tyring to do wholesale, mainly because you dont need to spend much, or any, money.
Everytime i talk to somone about being interested in wholesaling, their ussually turned off by it due to signing the contract.
How can i talk to them, and explain everything, that would make them want to let me wholesale the property.
But you may want to focus the sellers attention on your willingness to BUY their property. I am not saying withold form them the fact that you MAY assign the contract to another peron/entity. I am saying emphasize the benefits they will receive from selling their property.
What kind of sellers have you approached? WHat were their situations or better yet motivation for selling?
But you may want to focus the sellers attention on your willingness to BUY their property. I am not saying withold form them the fact that you MAY assign the contract to another peron/entity. I am saying emphasize the benefits they will receive from selling their property.
What kind of sellers have you approached? WHat were their situations or better yet motivation for selling?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
19y
I think you may be going about it wrong. You get someone to sell you their house, then you wholesale it. If you're telling someone, I'll say you house and I get paid $xxx, then you're acting as a broker. In most places, that requires a license. If you get a contract with them, then its you are a principal in the transaction.
What type of escape clauses would you put in your contract with the seller?
What happens if your buyer(s) dry up and you don't really want to buy the property yourself?
Real Estate Investor · Millsboro, DE · Member since 2008 · 480 posts · 26 votes
18y
Nailed it. You always say you are looking to buy their house for cash. You mention you may assign the contract (or whatever way you plan to pass it on) but either way, they are still getting paid cash for their home. Don't "over explain". When I started, I would launch into this long explanation about the details of the transaction. Don't do this. Just tell them cash for their property, and negotiate a rock bottom price.
This is assuming you're not purchasing the home yourself, just passing on the deal.
okay, so this may be a stupid question (or not if it helps the original poster), what happens if you secure a contract and then, you can't find an investor who will want to buy it? Should you have a buyer/investor already lined up prior to securing a contract to ensure that the property gets re-assigned?
I would think having buyers lines up prior to getting the prop. under contract would be the optimal approach. In regards to what one does if they have the prop. under contract, and can't find a buyer. I believe most investors put contingensies in the sales/purchase (?) contract to provide them with GREATER CHANCES of getting out of the contract, and to not get sued. I don't know how specific or vague one could be.
I Don't know if you state- contingent upon successful financing from ABC bank for a 2/28 @4% would be considered sufficient? Or if that is too specific or too vague? Can someone give some insight into the types of contingencies or clauses one would put (or may put) into the contract that provides them an escape.
Real Estate Investor · Millsboro, DE · Member since 2008 · 480 posts · 26 votes
18y
Like I said somewhere else on the forums, you can run ads for buyers before you actually have a prop. under contract.
Just say "Handyman Special! 3/2 Cash!". When they call, say the house just sold, but you come across deals all the time. Get all thier info, and make list. Do it a few times, incase someone is out of town, or missed the paper.
Metairie, LA · Member since 2008 · 165 posts · 1 vote
18y
I myself have been looking into using options b/c if the deal doesn't go through, then the consideration money stays w/ the seller and you go on to your next deal or extend the time. I'm having the problem of how to negotiate w/ sellers b/c I tend to explain what I do instead of just talking numbers. Iin the past when I put props under contract I'd explain everything b/c I felt that when the time came to do the contracts the seller would be like 'what is this'? so i figured I'd tell them upfront. May be that's why I haven't closed any deals. If anybody knows how to get past this sticky point most wholesaling courses don't cover, it'd be greatly appreciated. Thanks!
Real Estate Investor · Millsboro, DE · Member since 2008 · 480 posts · 26 votes
18y
jc, the seller only keeps what you gave him in earnest money. I start at $250, and take no less than $1000 from the buyer. If the seller gets $250 and the nonrefundable deposit is $1000, you still walk away with $750, on a deal that never happened.
IMO, you need to explain what you do, and if they are interested, they will tell you. I rarely negotiate with sellers. Matter of fact, I rarely make offers in numbers. I put them in positions where they have to tell me what they want for their home, instead of me making offers upfront. Many times, they lowball themselves, so I dont have to.
Real Estate Investor · Millsboro, DE · Member since 2008 · 480 posts · 26 votes
18y
1st paragraph is if you are using an option. If it falls through, you keep whatever you didnt give the seller, as its nonrefundable.
The sellers that I hear from, cant sell their homes, because it needs repairs, and they think its worth top dollar. Most of them have listed with agents before. Even if they try to go high, Ill tell them right out, "thats way too high, thats why your house hasnt sold".
You want to keep the calls coming in. Thats important. You want to be constantly dealing with a seller, and telling them they are asking too much. :D
Real Estate Investor · Millsboro, DE · Member since 2008 · 480 posts · 26 votes
18y
I do push on sellers though, so I guess you can say thats how I negotiate. 90% of the time im telling them they are asking too much, in one way or another. Sometimes its because they are, other times its because I know I can, and I know I can move them.
I would start getting the calls coming in. Use them as practice. Literally, practice with sellers.
Real Estate Investor · New Orleans, LA · Member since 2008 · 33 posts · 1 vote
18y
The topic of "How do I persuade someone to let me wholesale their property" lured me in. As REI Coach mentioned, my thoughts on wholesaling is that a wholesaler will mainly be working with motivated sellers. If we're attempting to convince a person, then the wholesaler wouldn't be able to truly acquire the property at a discount. If we don't get it at a discount, then we might as well be in the retail market.
Real Estate Investor · Kalamazoo, MI · Member since 2008 · 40 posts · 0 votes
18y
Another good way to get a buyers list is to drive around town and start writing down numbers on any "for rent" or "we buy ugly houses" signs. I just started working on generating a buyers list and I've called a decent amount of these numbers and the investors are more than willing to get on your list. I also contacted the people in charge of acquiring properties for the large renting companies in the area and they were excited to get on my buyers list.
After I call them I send them a questionnaire via email which asks questions like:
What exit strategies do you employ?
What areas do you prefer to invest in?
What areas will you NOT invest in?
What is the ARV range for your properties that you aim for?
etc.
These questions will help you target your houses to the buyers it makes the best fit for.
jc, the seller only keeps what you gave him in earnest money. I start at $250, and take no less than $1000 from the buyer. If the seller gets $250 and the nonrefundable deposit is $1000, you still walk away with $750, on a deal that never happened.
I'm not quite sure I understand. I was under the impression that as a wholesaler, you never have to put up any money. Isn't that supposed to be one of the advantages of wholesaling?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
18y
A contract requires some amount of money to make it binding. If you're working directly with the seller (e.g., someone who calls one of your bandit signs) you can make the amount $10 or whatever they will accept. If the property is on the MLS, including an REO, the agents involved are probably going to insist on a larger earnest money amount.
Real Estate Investor · Millsboro, DE · Member since 2008 · 480 posts · 26 votes
18y
TonyS. wrote:
jc, the seller only keeps what you gave him in earnest money. I start at $250, and take no less than $1000 from the buyer. If the seller gets $250 and the nonrefundable deposit is $1000, you still walk away with $750, on a deal that never happened.
I'm not quite sure I understand. I was under the impression that as a wholesaler, you never have to put up any money. Isn't that supposed to be one of the advantages of wholesaling?
Mike, I was referring to the earnest money from the buyer, to the seller. I take $1000 from the buyer, and tell the seller Ill give them $250. The rest I pocket. If the deal falls through, the seller isnt mad because I gave him $250, and the earnest is nonrefundable, so I pocket $750. Thats all I was saying, really.
You dont need much money to get into wholesaling, no.
Real Estate Investor · Millsboro, DE · Member since 2008 · 480 posts · 26 votes
18y
Its a way to show the seller that the buyer is serious about the property, and intends to buy.
ear·nest (ûrnst) adj.
1. Marked by or showing deep sincerity or seriousness: an earnest gesture of goodwill.
2. Of an important or weighty nature; grave.
earnestly (adv.) - in a serious manner; "talking earnestly with his son"; "she started studying snakes in earnest"; "a play dealing seriously with the question of divorce".
Ok...so a wholesaler would collect earnest money from an investor interested in purchasing the property? I'm guessing the investor/buyer would only deposit earnest money towards the latter part of the transaction. Any books you can recommend that go into detail about wholesaling?
Minneapolis, MN · Member since 2008 · 691 posts · 12 votes
18y
Peter Conti has a good boook that goes into great detail about working with pre-foreclosures and other investing, using the "subject to" technique, and this is a popular technique in wholesaling properties, because you can buy without obtaining new financing, tie up the property until you can identify the buyer who has financing. He also has a pretty good philosophy as an investor, to go for profit but in an ethical way. Mike
Minneapolis, MN · Member since 2008 · 691 posts · 12 votes
18y
The best one is "making Big Money Investing in Foreclosures withour Cash or Credit" I saw it for 10.57 used on Amazon.com, after I had paid around $25 for it at Borders! Also the other one is "Making Big Money in Real Estate Without Tenants, Banks or Rehab Projects" - Saw it for $2.49 on Amazon.com used. Mike