Wholesaler Beware...

[Andre Green]

I have a great investment opportunity for the right buyer in my area and I am not sure what is the best way to get a hold of real buyers who are looking to complete deals. Alot of people in this industry as many of you know can talk a good game but fall way short of deliveirng on their word.

I have a 2 family in Brooklyn, NY that was previously an REO. My partner that I am working with purchased it with other properties and is looking to sell it because it was just thrown in the deal by the lender. It's being sold at 55% ARV (CONSERVATIVELY) but does need alot of work. We have received offers from a bunch of "posers" that just ended up having us waste time.

Any advice on how to get in contact with real local buyers in this market?

[Ryan Webber]

Originally posted by Mr_Investor:

This is why you should always build up a credible buyers list in your area or other areas before you lock up a property.

I disagree. By far the best wholesaling opportunities are in areas that 90% of investors will tell you that they don't buy in. Most investors will tell you that they want houses in high appeal areas. Problem with that is that when you go to find deals in those areas, you will be competing against everybody and their dog to find a deal. Too high of a demand will cause you to have a lower success rate when looking for deals. You need to be in an area that has a relatively good demand but also has a high supply of high-equity properties.

I have had much more success PICKING my potential farm areas where I will be wholesaling in BEFORE I ever contact an investor in that area. This ensures that I'm investing my time into an area that will have an abundance of deals. Deals are harder to find than investors. I would rather have 10 deals in an area with only 5 strong investors than 1 deal in an area with 100 strong investors.

Originally posted by Financexaminer:

POF with your offer, or written loan commitment/pre qualified, should do it!

This is how realtors qualify buyers, not wholesalers. As a wholesaler you need to feel out your buyers by conversationally asking them several pointed questions that will quickly tell you how serious their financing is. Anybody can get a POF or pre-qualification letter. That is not what you are looking for to determine how serious an investor is.

How many properties do you own?

This is the number one pre-qualifier question. If its 0 or 1, be prepared for trouble. You will be holding their hand through the whole thing IF, and that's a big IF, they can even close. 5, 10, or 30 properties tells me that they know what they are doing and I'm dealing with someone who has already jumped through the hoops before. You won't be needing to hold their hand through it. I'd still verify what they own through public records. Most people are pretty honest about this but you never know.

How fast can you close?

If its anything more than a week or two I know I'm dealing with someone who is at least a semi-newbie.

Who are you getting your financing through?

If its NOT cash, hard money, or a COMMERCIAL loan officer/department (learn the difference between commercial and residential loan departments), then you are going to have problems 95% of the time.

Those 3 questions will qualify your investor buyers more than any POF will.