My current wholesaling game plan -- feedback much appreciated!

Wholesaling
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My current wholesaling game plan -- feedback much appreciated!

Zachary Lynn
East Setauket, NY · Member since 2015 · 7 posts · 1 vote

I am somewhat new to the wholesaling side of real estate.

After dozens of hours of research, this is how I plan to open up my business.

Step 

1) Create an online presence / storefront for a company who helps offer options to underwater mortgagees. 'come to us for a free analysis of your mortgage situation. This is just one of my planned marketing angles.

2) Get leads through all the ideas i've found on here such as absentee owners lists/ local govt filings / postit signs/ driveby/ etc (the etc is expansive)

3) Create a database of the potential clients we may propose buying their house to after they call or call them and detail every step.

4) Take down details of house after speaking with owner and explain how we work and eventually what we can offer and how we came to those numbers. Do comps, and estimate repairs, and make them a 'cash' offer.

5) Get a lawyer (probably step 1 lol) and get a contact written up which is assignable and gives me outs if need-be.

6) Unload contract to whoever offers best or bites first at reasonable profit. 

--Obviously this is a basic guideline I have in my head without all the details, but does this sound good? Am I missing steps? How much should a lawyer charge to write me up a general reusable contract for this purpose? 

I have an investor ally who said don't even get the thing contracted up, he'll lawyer up and sort out the details for me. I know it would generally be in my best interest to get it contracted up myself--but I was thinking to let him negotiate their price and give me just a commission on the first few ones so I can hear how it's done.

Should I open up an LLC or is acting as a sole-proprietor better?

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Tim G.
Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
11y

Best of luck, this isn't to discourage you. More to motivate you, but these game plan threads appear pretty often then vanish into the BP archives never to be updated. 

Perfect gets in the way of done, execute execute execute. Don't worry about all of the details, that is the beauty of wholesaling you can make mistakes with minimal risk. 

Also, find a good wholesaler in your area. Imitate, then innovate. Quite often you'll find folks here telling you how they'd like people to wholesale, not how to wholesale. 

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  • Tom S.
    Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
    11y

    @Zachary Lynn

    Underwater mortgages means a short sale will have to be done. Typically banks will require a property to be listed on the MLS first with their agent that specializes in short sales. And you'll have to use their contract.

    - Tom

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  • Zachary Lynn
    OP
    East Setauket, NY · Member since 2015 · 7 posts · 1 vote
    11y
    Originally posted by @Tom S.:
     

    Thanks for the reply! Good point. I used the wrong terminology (newbie! sorry). I mean people who are having serious trouble paying their mortgage or haven't in a few months but their house is still worth at least greater than the current payoff of the mortgage.

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  • Steve G.
    Real Estate Coach · New Zealand / USA · Member since 2014 · 296 posts · 82 votes
    11y

    @Zachary Lynn - good plan in general, but number 6 should be number 1 - IMHO.

    Find your cash/end buyers first, ask them their requirements, and then go find the deals to match.

    For your first wholesale: Once you've got a property which fits the cash buyers criteria, use an investor friendly Realtor to draw up a contract - pay him $500 (from the closing fee you'll get) for the 20-30 minutes it'll take to do it, use a standard assignment contract found in the Resources section of BP (http://www.biggerpockets.com/files/category/contracts) . . .  and just get the deal done!

    Now you can then go to an "investor friendly attorney with the funds you just made, and get a "tailored" contract(s), more in line with your own methods of working. Ask your Investor Ally to recommend both the Title Company and the Attorney.

    Finding your cash buyers first is the most important aspect of wholesaling - in my opinion!

    Short sale wholesaling is a whole other issue - check out some of the posts on these forums - there's a section devoted to it:-

    http://www.biggerpockets.com/forums/103-short-sales

    Good luck

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  • Tim G.
    Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    11y

    Best of luck, this isn't to discourage you. More to motivate you, but these game plan threads appear pretty often then vanish into the BP archives never to be updated. 

    Perfect gets in the way of done, execute execute execute. Don't worry about all of the details, that is the beauty of wholesaling you can make mistakes with minimal risk. 

    Also, find a good wholesaler in your area. Imitate, then innovate. Quite often you'll find folks here telling you how they'd like people to wholesale, not how to wholesale. 

    1Reply
  • Zachary Lynn
    OP
    East Setauket, NY · Member since 2015 · 7 posts · 1 vote
    11y
    Originally posted by @Steve G.:

    @Zachary Lynn - 

    Finding your cash buyers first is the most important aspect of wholesaling - in my opinion!

    Thank you Steve for taking the time to respond. All very good ideas that I will try to implement. This support is making me feel excited that I joined and am not going in completely guided from my research alone. 

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  • Zachary Lynn
    OP
    East Setauket, NY · Member since 2015 · 7 posts · 1 vote
    11y
    Originally posted by @Tim G.:

    Best of luck, this isn't to discourage you. More to motivate you, but these game plan threads appear pretty often then vanish into the BP archives never to be updated. 

    Perfect gets in the way of done, execute execute execute. Don't worry about all of the details, that is the beauty of wholesaling you can make mistakes with minimal risk. 

     I will do my best to keep the post updated every few months as progress is made. Your message was received well. I'm excited to execute, I know that it's just about go-time and am looking forward to this upcoming journey of making mistakes along the way and learning all different angles how to avoid and perfect the process. Imitate, then innovate...I really like it. Thanks Tim

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  • Steve G.
    Real Estate Coach · New Zealand / USA · Member since 2014 · 296 posts · 82 votes
    11y

    @Tim G. makes a good point - it's action that gets results, all the other issues usually work out along the way.

    Keep us posted, and remember "Hope is not a strategy"

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  • Richard C.
    Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
    11y

    1) Create an online presence / storefront for a company who helps offer options to underwater mortgagees. 'come to us for a free analysis of your mortgage situation. This is just one of my planned marketing angles.

    Better check with your lawyer on this one.  Or @Bill G.

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