HELP: Wholesaling Infill Urban Lots in A Competitive Market

[Asad Shaikh]

Good morning BiggerPockets,

Quick introduction- my name is Asad. I’m a licensed realtor in Tampa, and have been licensed for two years. After a relatively successful second year, I’ve saved a good sum of money and feel comfortable venturing into a new arm of real estate: wholesaling.

The reason I want to start wholesaling is simple: I stumbled into it while looking for infill urban lots (vacant lots or teardown opportunities) in gentrifying neighborhoods near Downtown Tampa. I was initially looking for these lots to purchase with a small investor group (me and two family members) :some to buy & hold and others to develop cool modern single family homes on.

That being said, the methods I was using to find lots were pretty much connecting with other wholesalers and realtors for off-market deals. These deals often were at retail prices or very close to it. Then something crazy happened a few weeks ago: I happened to be showing a client a home in an up-and-coming neighborhood. After the client left, I saw some neighbors. I started chatting it up with them, and gave them my card and told them to call me if they knew anyone in the neighborhood was looking to sell.

A few days later I got a call from one of the neighbors, they referred me to a family member selling. After a 4 hour negotiation at the family member's house, I signed a purchase contract on the house for land-value. I used a standard AS-IS contract with an option to assign, but only did this because I thought I may assign it to an LLC I would later create. After running the lot by my builder partner, he wasn't too thrilled with doing a project on it… frankly neither was I after reviewing sales comps. We are a small group, breaking ground on our first project this month, we don't have the economies of scale to build at a low cost per square foot. The lot didn't make sense for us but…

I though, why not wholesale it. I’ve never wholesaled a property before, but was able to assign the contract for a net profit of $15k. 

I want to roll $5k-$10k of this profit back into a mailing campaign targeted at a very tight geographic region. I want to strictly target purchasing vacant lots, or homes that sit on double/triple lots. I figure I have multiple options once meeting a homeowner that wants to sell: I can purchase a lot and close it cash with my investment group, I can lock up a lot and assign it to another builder if the numbers don’t make sense for us, or I can list the property as a realtor if the seller’s price is too high. Where do I begin?

What lists should I buy, from where, and how can I narrow down the right properties? Where should I buy the mailers and in what frequency should I send them? I figure I should target 500-1000 specific properties and mail them 5-10X each for optimal results. I only want to focus on a tight geographic area because that is where my expertise lies.

I figure if I hit 500 hyper-targeted properties, I may have a 2% response rate of serious sellers. This is equal to 10 responses, and if I can close just 2-3 deals from a campaign with high margins, I'm sure I'll get my money back and then some. I can also blanket my geographic target area with cold calls via Mojo triple line dialer if needed.

I want to share my progress, as I learn & take advice from y’all, play by play in this thread. I figure it will be to follow along as I will be very transparent in my results either positive or negative. I know there are plenty of Gurus out there to learn from , but I trust my BP folks first and foremost! I’ve learned so much from the Podcasts and forums. Thanks for any help!

Any questions or advice?