How long before you're under contract?

Question

Hey all, I just wanted to pose this question to all of the wholesalers out there: How long does it usually take for you to get your properties under contract with the investor? Thanks, Lauren :D

Ryan Webber · Answer

Totally depends on how good the deal is. A smoking deal will take an hour. A good deal with no smoke can take a couple months. Sometimes even after months, it won't sell unless you add value somehow ( fix at least major issues, rehab it entirely, rent it out, etc) which most of which normally consist of actually buying the property first.

J Scott · Answer

Here's the flip side of the coin, from someone who is NOT a good wholesaler (I generally rehab, but occasionally decide to wholesale)... I typically start to market my properties when I get them under contract, but I do most of my marketing via Craigslist and the MLS (though I do have a small buyers list). Since I can't relist on the MLS until I actually own the property, I generally don't get much traffic until I close on it and relist it on the MLS. At that point, I tend to get a LOT of traffic, and generally have it under contract within a week or so. In fact, I'm guessing that real wholesalers wouldn't even consider this wholesaling, as I actually take ownership of the property, but thought I would share the experiences of a "bad wholesaler" to even this thread out... :D

Aaron Mazzrillo · Answer

100% agree with Ryan. The better the deal, the faster it is sold. I try to buy so that all my deals sell with one phone call. If I have to make more than 3 phone calls, I am paying too much.

Sharon Vornholt · Answer

I'm just thinking out loud here J. Scott - Since you are a Realtor and have access to the MLS, why don't you run a list of the agents that routinely work with investors/cash buyers. You can't put the property back on the MLS, but you could call these agents and let them know you have a house under contract that you want to wholesale. Those Realtors would understand wholesaling and would welcome a house that was like a pocket listing to pass on to their investor buyers. I'm not an agent, but I work with them from time to time when I'm wholesaling properties. If they have clients that are cash buyers, I just figure their commission in my asking price. It's a win win for everyone. As an agent/investor, you are in great postion.

Ryan Webber · Answer

You might check on this more thoroughly if you haven't already. Though it is always frowned upon, some Realtor Boards will still let you do this with some specific requirements (surprisingly, my market's board will let you). Most realtors I talk to about this have absolutely no idea that you can, and are rather adamant that you can't. I, personally, do still consider that wholesaling. Technically speaking, wholesaling is NOT assigning or double closing a house. Wholesaling is reselling to a NON-end user (i.e. another investor). Whether you closed on the property or not does not affect that issue. Now assigning the property or reselling it the same day via different strategies is definitely the most common closing method of wholesaling, but that is not what wholesaling IS technically. I would argue that assigning, double closing, simultaneous closing, or land trust/LLC selling a house to an Owner Occupant is technically NOT "wholesaling", but rather "retailing". The closing strategy is not the defining issue of wholesaling. Who you are selling to is the defining issue. Not that technical definitions make much of a difference. If you are making money, who cares what they call it. I actually close on just over half of my "wholesale" properties. I normally close them as fast as I comfortably can whether I have a buyer for it or not. This prevents dealing with cold feet sellers. I've lost deals because I didn't close them fast enough, so most of the time its just not worth the risk to me to wait.

Lauren Norwood · Answer

Good info, guys! Thanks for your responses!

Bill Gulley · Answer

My last one, an option was struck in an hour and assigned it to another contract in just over two weeks, but they don't always go like that at all. I agree with others, you can buy or sell on the phone or it could take months to get the right deal. (if you need to chase one that long)

Will Barnard · Answer

Good point. Contracting aq good deal will also determine the amount of value you have brought to the table and thus, determine your fee as the wholesaler, contingent upon what the market will bear.