Wholesale Contract/Offer Next steps - HELP!

[Evan Parker]

Okay, let me start by saying I'm fairly new, I've only placed 1 offer so far and it turned out not to be too great of a decision. 

But there is something I don't entirely understand about wholesaling that I feel gets overlooked in a lot of conversation. Which is exactly HOW to market the deal you're trying to get someone to buy. 

Let me Explain: 

As I understand it, it is not best practice to find what you think to be a good deal, get it under contract, and THEN commence to shop it around. Due to the fact that you have locked up a property without the certainty that someone will purchase the contract, thus wasting everyone's time should no one actually bite on it(makes sense). 

I also understand that it doesn't make sense to shop deals around with your buyers that you don't actually have under contract yet, because.....well it's not even under contract so you're offering an asset that technically doesn't even exist at the time of your offering. Baaaad business practice 101 in my opinion. 

BUT, here's the kicker. If you're unlicensed, it's my understanding that  if you do have something under contract you can't market the deal with pictures because you're then brokering a property illegally...so it begs me to ask the questions..

1. What is the proper "most effective" way to market a deal...? I want to remain as ethical and efficient as possible. But if I shouldn't secure a contract and THEN shop it around, while simultaneously not shopping deals before they're under contract and gauging interest,  how is it possible to ever market/get a deal? 

2. If I can't market with pictures, okay I can get ways around that with just text and projected ARVs etc. But how can I expect someone to be even remotely interested in buying a home that they can't see? Assuming this is the first time this person is doing business with me, so they have absolutely 0 reasons to just "take me on my word" about what's being offered. 

Any and ALL advice is truly appreciated! 

[Ned Carey]

@Chance Waddle Thank you for the kind comment. I will reply to a few things. 

First let me say that the answers to some of these questions are a moving target. Also I will say there are some very credible people here on BP that have very strong opinions on both sides of the issue. Whether or not Wholesaling is Legal, depends on specific state laws and the exact circumstances of the transaction 

Let me also say contrary to what many teach, Wholesaling is NOT easy, it is NOT risk free, it CAN'T be done consistently without money. (yes a deal can be done with little money but building a consistent business cannot be done without money)

@Nick Bryant wrote

If you have the property under contract, in most states and circumstances, yes you could legally "assign" your contract. If you do not have the property under contact, that is what most people call "Bird Dogging" and as far as i know is illegal in all 50 states. 

Now the devil is in the details. Was there any fraud or coercion in getting the contract? In getting the property under contract did you tell or imply to the seller you would "Help them find a buyer" Doing those things moves you back into likely an Illegal area.

@Brendan Bruno wrote

Well I don't believe that is true in most areas. Only a foolish buyer will trust a wholesalers numbers. The reason to provide numbers is for the buyer to pre-screen the deal. If he thinks it may fit his or her criteria the buyer will go take a look. Very few buyers buy without looking.  Regarding Foreclosure auctions, buyers are buying assuming the worst case scenario.  If you as a wholesaler price a property low enough that is is a deal as a worst case scenario then yes someone very experienced may buy without looking. 

@Evan Parker  Wrote

You bring up the paradox of wholesaling.   My answer when starting and I still think the appropriate answer is 

A) Have enough money to close on the deal in case you cannot assign the contract quickly enough. 

B) Know With Certainty that you Can find a buyer. 

I never do deals i think are good deals. I do deals that I KNOW are good deals. This is not about guessing, or hopping values will go up. This is about Knowing what the market will pay, Knowing what repairs will be Knowing what rents are, Knowing what other investors will buy and pay. 

You have to decide what your personal morals will allow and how much risk you are willing to take regarding the law. Bird Dogging is illegal as I defined above. However there is no "Bird Dog Police". Speeding in your car is illegal too. However lots of people do it. But just because a lot of people do it does not make it right or legal.  In most areas, getting a property under contract and then assigning that contract is legal.  

Now let me go back to my first point above. This is a moving target.  We are all only one bureaucrat, legislator or liberal activist judge from wholesaling being deemed illegal. So however you chose to structure you business or deals make sure you deal fairly and ethically, and honestly with all parties. You don't want to be the poster child for why wholesaling becomes illegal in your state.