Is wholesaleing in LA area dead for now?

Question

I have been reading threads about wholesaling and looking for opportunities in my area or people that are actively doing this strategy. What I'm finding is not very much activity. I heard recently at a REIA meeting that wholesaling has greatly diminished in the northern LA area and that the strategy is not that viable right now. Can anyone confirm or refute this? Thanks.

Larry Chafe · Answer

I don't agree with the last poster, that sellers are "getting educated".  (Who's educating them?)  What we are seeing is market forces at work here in LA area.   It's now a sellers market.  Interest Rates are low.  Things selling with multiple offers, over asking price is commonplace again.  Some of that is seasonal right now in the summer.   For sellers that have fixer-upper properties that need renovation, and want to sell to an investor:   I have seen many place ads in the paper / CL, etc... and hold investor "open houses".   And there are alot more investors in the market now that it is moving up.  They are paying higher prices, banking on prospect of higher resale prices.   In a sense, the traditional wholesale business model of buying at  70%ARV - cost of repairs is dying right now in LA.   Investors are paying 80-85%(or more) of ARV - C.O.R., and if you are a wholesaler trying to bid against a re-habber, you are going to be out-bid or you will pay too much.  So as an investor trying find wholesale deals myself,  i am feeling the same frustration out here in LA.   Any word and strategy from anyone taking down any deals here in LA area?

Larry Chafe

Great California Homes

www.greatcalhomes.com

Account Closed · Answer

I don't think wholesaling is diminished in California just motivated sellers are getting educated on the dishonest wholesaler's offing one dollar to tie up the property for 30 to 60 days with no intent on buying only interested in selling their contract.

Joe Gore