Can I wholetail in my city?

Question

Hello, I have heard many people getting properties under contract, turning around and listing them on the MLS as-is. Can I do that in San Antonio, TX? I have a property in which the owner says is worth $130k. Wanted $100k. I had first offered $77k when they said the least they would take was $95k, so I walked away. This morning they came down to $85k. I offered $83k and still waiting for response. My plan is to buy it at most $83k and list it for $115k on MLS as-is since it is rental ready and believe the ARV is $130k.

First of all are these numbers a deal in your book? If I wanted to make it retail ready I would put in about $11k. But rental ready would be just paint and a broken window.

Lastly, how do I fight my realtor's objection of saying "well, you can't list it unless you own it", and can it be done here in San Antonio, TX. I'm not aksing only can it be done, but can it be done LEGALLY?

Rick Pozos · Answer

I am a little bit of a skeptic. When it is on MLS and does not sell for 95k and does not sell for 85k, then do you really think it is worth 130k?? If the seller told me it was worth 130k I would ask him, "then why has it not sold for 95k" If this was an off market deal, maybe, probably. MLS though is pretty market efficient. There really has to be a motivational factor that causes the seller to sell their property at below market price. Can you wholetail other deals here in San Antonio, no doubt. I am getting ready to do that this week, buy it, clean it up and sell it to a buy and hold person. PM me and I can give all the details. You have to have the TRUE numbers. This property is probably NOT worth 130k.

David Dachtera · Answer

@Aroldo Villarreal,In general, you can sell anything you legally OWN.That is to say, as a wholesaler, you can sell your position in the purchase contract - nothing more.You can't sell the property - you don't own it.By listing the property you would effectively represent that you either own it or have been hired by the owner to sell it. As a buyer on contract, neither of those describe your position. So, you cannot legally do so. Some states interpret that as performing actions requiring a license without actually holding the required license.David J Dachtera"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."- DJ Benedict

John Moore · Answer

Seth is correct and I will add that its illegal anywhere in Texas to try and sell a property that you do not completely own; meaning you have actually paid for and closed on - the deed in in your hand (not talking about having a contract/asigning - thats a whole different conversation) But if the numbers you have are real, then it might...might be worth it. But that is based on the assumption that you truly have to do no repairs and those deals are very rare in the sub $100K price range. Anything in SA that is move-in ready and under $150K is flying off the shelf right now, and I would question why the home didnt sell at $95K if it is move in ready. If its not move-in ready, then the chances of it being a quick "no repair" flip are slim and the deal should be scrutinized with the glasses of a rehabber and becomes a different deal. I do BPO's and if you want me to take a quick look at it I can give you at least a ballpark ARV in about 20 mins.

Account Closed · Answer

The first two sentences of John's reply should be headed by all wholesalers.

Adam Reyes · Answer

once you do have a property under contract at a good enough price for a buy and hold investor, what's a good way to market that contract? From my understanding there are certain restrictions in my state for advertising on C-list to sell this wholetail contract. For example, posting pictures of the property and so on like many of you said your not selling the house but your position in the contract. I guess my question is how do you advertise your contract? If bandit signs the answer then what verbiage do you use?

Aroldo Villarreal · Answer

Yes, comps show similar properties in the same neighborhood and two blocks away sold for about $170k, except that they are all rock on the outside and this one is just siding. There was one that sold for $157 per sq foot, but I didn't use that as a comp. I placed the value at $130k since it also doesn't have a garage.

Christopher Brainard · Answer

@Aroldo VillarrealThis deal looks really thin and doesn't leave you much room for maneuvering. Additionally, the owner said it was worth $130k, but what do the comps say? Don't forget, you will have closing costs on the other side. -Christopher

Seth Teel · Answer

You can wholetale, but you would have to close on it first then list on the MLS. It is illegal to place a property for sale on the MLS that you do not own, even if you have it under contract. It is also against the SABOR & MLS rules. This would also open a door to to several types of legal vulnerablilities. If you want to do, buy and close, then re-list. Figure into your numbers the cost of closing, holding costs, potential time line for reselling, Realtor commissions, etc. The deal may become to slim.