How do large wholesalers assess repair cost?

Question

I just started wholesaling. On a small scale, I can go drive and see the house. This is really the only way to get an accurate assessment of it's condition. But if I ever expand and am sending out 50,000 letters/month, there will be no way I, personally, could see every house. Do I need to have employees do this or is there a way to wholesale without actually seeing the house?

Account Closed · Answer

Sending out 50000 letters will not get you 50000 responses. Depending on the letter you send you may get less than 500 people calling. Then you will get less than 100 sellers willing to talk to you, and you will typically get less than 50 properties to go look at and less than 10 contracts.

Sam Bhullar · Answer

@Patrick Philip

Get contractors to do that work for you. There are plenty of guys who will go out for you for free, a few times and provide you a decent estimate. Once you have the money coming in.. you can always start paying them for their estimates. But in all likelihood, you will have to go out with these contractors to the property. This will also teach you to estimate repairs in the long run. Once you are big enough, which will take some time [year(s)], you can always hire a full-time contractor because by then you won't be just wholesaling but diversified into rehabbing, new construction etc.

Account Closed · Answer

If you don't want to see the properties your self then you can either hire an employee, or hire a subcontractor to do the assessment for a set price per house.

Patrick Philip · Answer

@Sam Bhullar I don't need contractors to estimate every single house because I have a general idea of what things cost to repair anyway. Maybe just the first few. I'm trying to think forward to when I am getting too many calls to possibly see them myself. Perhaps I will need an employee to do this. I could pay them a commission and hire them as an independent contractor.

Wayne Brooks · Answer

@Patrick Philip My comment was not about whether you will need employees, or likely ever have any.  It was simply a correction about FL workers comp laws for others, not if it will apply to you.

Patrick Philip · Answer

@Wayne Brooks I don't see the need to hire employees. Bird dogs aren't employees, so neither would someone who goes to a house and looks at it's condition. If I'm ever going to get big, I'm going to have to solve this problem. There are wholesalers who send out 30,000 postcards/month and we both know the owner is not checking out all those houses.

Wayne Brooks · Answer

@Patrick Philip You said "workman's comp is only for the construction industry".

Patrick Philip · Answer

@Wayne Brooks did I say 50 employees or 50 houses?

People must not know how to read

@Stephen Anderson if I get 10 houses under contract, that's $50,000 at $5,000/house. Subtract marketing cost, I'll have at least half. Not bad for one mailer.

Wayne Brooks · Answer

@Patrick Philip I don't see this working out for you.  You're just starting, and are getting hung up on having to actually do the work, and perhaps a bit delusional about how many house you'll have to look at.  But your answer to your question; they just take a Wild Ass Guess, most of the time.  And so you know, workers comp is required for Any employer have more than 3 employees in FL, and required if you have only one, in construction.

John Thedford · Answer

@Patrick Philip

This is from DBPR website.

These activities require a real estate license. Property management requires a license unless you own it.

Needs a License

Does not need a License

Appraising or attempts to appraise real property for another for compensation excludes services that must be performed by a Licensed or Certified Appraiser under Chapter 475, Part II, Florida Statutes.

A salaried employee of an owner of an apartment community working in an onsite rental office.

Auctioning or attempts to auction real property of another for compensation.

The owner of a timeshare period who later offers the timeshare period for resale.

Selling or attempts to sell real property of another for compensation.

Any person or business entity that rents or advertises for rent a public lodging establishment properly licensed in Chapter 509.241, Florida Statutes.

Buying or attempts to buy real property of another for compensation.

A tenant in an apartment complex who receives a referral or finders fee, not to exceed $50, for the referral of a tenant. However, the tenant may not advertise or otherwise promote the service of finding a potential resident.

Renting or Leasing or attempts to rent or lease real property of another for compensation.

The owner of real property who offers the real property for resale.

Advertising or attempts to advertise real property of another for compensation.

Representing that you are engaged in the business of brokerage activity.

Undertaking to list or sell one or more timeshare periods per year on behalf of another individual or entity for compensation.

How do large wholesalers assess repair cost?

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