How to wholesale without access to the property?

Question

Out of the many wholesales I've done in the last year, we have a solid one now where the sellers attorney instructed her not to give us a key before closing. We have multiple interested buyers who want to see the property, but she is insisting on meeting anyone there instead of putting a lockbox on the property.

Luckily we have the money to close before we start showing it, but at that point we may as well put it on the MLS.

Has anyone run into this before? How did you bypass it?

Luckily we have the money to close before we start showing it, but at that point we may as well put it on the MLS.

Has anyone run into this before?   How did you bypass it?

Wayne Woodson · Answer

As a wholesaler there are three groups people you want to avoid when doing deals: Attorneys, Lender's and the IRS.

In my experience Attorneys and Lenders have killed more of my deals than anyone else. Every now and again you will get a person who says "I have a buddy of mine that is an Attorney, I want him to look over the contract before I sign it". It doesn't matter if you use your contract or your states "official" contract they WILL find something wrong with it.

In your case John I would introduce your buyers as "your partners on this deal" and just tell your buyers not to negotiate with the seller when you show them the property. It doesn't make it easy when you have sellers that feel like they have be there to meet everyone but it's not impossible.

Ken King · Answer

I had this recently...in another state. The attorney advise the inherent seller to not show the house until there was a "firm deposit" on the property. The reason why he asked that is because he didn't understand what wholesaling was, but knew that it wasn't illegal to do.

His concern was that he didn't want me to blast it to my list and have 10s of people walking through the house. Also this was a recent death in the family and the seller was very young, being represented by the Attorney.

The first thing that I did was try to re-ensure the Attorney that we are on the same team and want the same resolution.  I didn't have this under contract but it had not been marketed to. I actually (by posting on CL) got in contact with this attorney that, in his words, wanted to avoid realtors. He said that as if he had a bad relationship with them.

What I did was explain to my buyer that this is the situation. It was a good deal and that I would also be on the contract, as well as my buyer. The buyer literally went to see the house, and made a decision to buy it (tentatively). I then schedule a meeting with my buyer, myself, and the attorney over the phone. We came to an agreement that would allow me to sell to my buyer, have him put a 10% deposit 1 day after a personal inspection with him and the seller, and then he would conduct the closing. The deposit went to escrow.

After that it became easy. I got my money. My buyer got a deal at 55% of ARV. The seller and Attorney got their money.

John Horner · Answer

@Kyle J. , @Ben Grotte , @Wayne  Woodson

Thanks guys for the great ideas.  I will have to use these in the future!

Ben Grotte · Answer

@John Horner I have run into this before and will run into it again, but it's not the end of the world.  I will usually call my buyers who I am 90% will end up taking the deal, run the scenario by them with pictures/video and make sure they are confident they want it.  Then I will schedule a time to walk them through the house while the owner is present.

If I get to a point where I am marketing a property to buyers who are not on my A-List nd I am not sure how serious of a cash buyer they are I have had them sign and assignment contract with deposit and I will give them a 24 hour clause to back out of the contract after the inspection.  This helps me gauge how serious the buyer is before I show them the house.  Odds are I'm only going to get a couple chance to show the house before the home owner starts getting curious/irritated because they obviously don't want the process to feel as if they have their house lsited on MLS with potential buyers in and out all the time.

You can easily wholesale this property before closing, it just takes a lot more due diligence with your buyers throughout the process.

John Horner · Answer

My business partner is a licensed agent and involved.  She does not know we will be doing a double closing and "wholesaling" it, so I certainly don't want a bunch of buyers there at the same time.

The "subject to inspection" is fine, but that still stretches out the timeline that we have to hold it.

I think I will add in my contract next time that we require a lockbox on the property at time of signed contract.

Kyle J. · Answer

Some times sellers don't want a bunch of lookie loos going through their home, especially when they're not present and there is no licensed agent involved (or sometimes even when a licensed agent is involved).  Can't really blame them.

One thing you can do to cut down on the number of showings and/or the need for others to visit the property in person is for you to take a bunch of photos (and maybe video too) of every room of the house.  Then make those photos available to interested buyers.  Most investors should be able to get a pretty good idea of what it's going to take to rehab the home for their purposes based on those photos/video.

Then just have them make their offers subject to inspection, which they can do once you have an agreement with them.

Or, if they don't want to make an offer without seeing the place, then schedule a time for them to see it all at once.

Lots of different ways to do it.  Good luck!

How to wholesale without access to the property?

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