First time deal

[Chelsey Jimenez]

I am trying to do my first wholesale deal. I have found the ideal location, it's a foreclosure that is listed through a real estate agent, the property is bank owned. We want to put in offer in, however I am not a real estate agent. If we sign a contract with the listing agent then sell the contract to someone else who is an agent....how does that work?

[Patrick Britton]

Well, bird dogging is an aspect of wholesaling, usually one of the first parts so in short, yes you could do that.

And although I am admittedly not a seasoned veteran of wholesaling I can tell you this: if you ask 20 wholesalers how to wholesale, you are going to get 20 different answers. Many make wholesaling much more complicated than it should be. After all you are simply bringing a motivated seller and an eager buyer together for a fee, that's it.

Just a thought and here's how I got my start with almost no money spent:

• drive around the neighborhood and try to find an abandoned property.
• Write down its address and then check with your county tax records as to the actual owner. If it's abandoned, it most likely is non-owner-occupied which will help you in that the seller may not be as emotionally attached to the property as he or she would be if it were their actual residence. 
• Then you write a letter to this owner. The type of letter and how you send it etc. is entirely up to you. I find that the unsealed yellow letter approach has a very high call back ratio but use whatever you want.
• Once you start getting calls you will have to qualify each of these owners motivation to sell the property itself. Personally, I would start by ascertaining the motivation to sell before examining the property. If the owner is willing to take a 50% discount then I will most definitely look at the property regardless of its condition. On the other hand if the owner refuses to budge and will only sell for retail prices then I would politely end the conversation.
• Once you visit the property you'll have to determine its ARV, repair costs, and a few other numbers if you so choose. For instance I always like to include NOI, cap rate, expenses, ROI etc.
• at this point you can go ahead and make an offer which would involve using a purchase and sales agreement applicable to your state and/or County.  Ensure that there is a clause or addendum allowing for a feasibility study. This will give you your way out if you cannot find an end buyer. Also some people say that you will have to put some earnest money down and others say you don't have to. Still others say that you can simply use a promissory note which is payable after the end of the feasibility study.
• If accepted and all you have to do is find a buyer who purchased the property for the agreed-upon price including your assignment fee.

So during this entire thing you might want to spend a little bit of time finding a buyer willing to invest in that particular area. You're also go want to set up an LLC as this will protect your personal assets from any sort of future liability. You should also try to familiarize yourself with all of the necessary forms and documents including the purchase and sales agreement, the assignment of contract, addendum's to the purchase and sales agreement, etc.

Depending on your area in the amount of time you put into this, you should be able to bring in your first dealer to using the aforementioned process. Once you have some cash reserve, dedicate a portion of this towards marketing.

But as you can see, each of these steps allow room for considerable discretion.  Very often it's not as important as "how" you do something but rather "what" you do.  

Again, if you ask 20 wholesalers how they wholesale, you'll get 20 different answers. Just do what is comfortable and easy for you to do, and of course always keep it legal.

i hope this helps