Creating Wholesaling Deals

[McCall Russell]

So I'm in the learning phase of REI and want to start taking some action. I know I want to have buy and hold multi-unit properties but been a little confused what I should start with since I haven't had any experience. From my research Wholesaling would be a way to get in and learn hands on. Getting acclimated with analyzing deals and getting comfortable with communicating it. From my understanding once I find a motivated seller and put the property under contract, than I find a investor to purchase it and I make whatever I put the assignment fee for. If that's correct? I've been searching on different sites for properties but all are listed properties. What other way am I able to locate un-listed properties? Where can I locate and learn how to fill out the contract? How do I approach the seller advising I'm wanting to purchase the property but I'm actually not the one purchasing it? How do I guaranteed to find someone to assign the contract to? Do I need an attorney? Thank you all for your time that I value and looking forward to reading your responses.

[Greg Dickerson]

@McCall Russell 

First step is to make sure you understand the laws in your area regarding wholesaling. While wholesaling is legal in most states, several states have passed laws defining wholesaling as brokering and are requiring a real estate license to wholesale property. If you are considering staying in this business long term I recommend getting your license. This will elevate your stature as a professional and open up a lot more opportunities for you to monetize deals you can’t buy or wholesale.

You should talk to a real estate attorney that works with investors in your area to ensure you are in compliance with any laws. They will also have the proper contracts as well.

Next you need to educate yourself on the business and your market. You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

As @Will Barnard mentioned start with finding cash buyers. You want professional legitimate cash buyers so you know you can close on the deal and do what you tell the seller you will do. I can’t emphasize this point enough. You do not want to contract a property unless you know you have a buyer who can close it or take it down yourself.

Different types of cash buyers are flippers, buy and hold, subject to and lease option. You need to find several of each of these types of buyers and learn what they are looking for. You will learn a lot about the business and the market by talking with cash buyers.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups, Realtors, title companies, closing attorneys, property management companies, auctions, Craigslist, google search, billboards and bandit signs. Some companies also run TV and Radio ads.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties with cash. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase. You can also buy lists from companies like list source and there are some REI software companies that have a cash buyer search feature.

Some of best ways to find motivated sellers is to purchase lists from companies like listsource and or compile lists from city and county like 60-90-120 days late on mortgage, pre-foreclosure, delinquent taxes, water cutoff, code violation, probate, divorce, etc. Then you can mail or cold call or both.

Other cheap or free methods are driving for dollars, craigslist, Realtors, FSBO sites, expired listings, foreclosure sites and bandit signs if allowed.

If you have the funds you can use billboards, newspaper ads, other offline publications., TV commercials, radio ads, motivated seller websites, SEO, pay per click/adwords, facebook, Linkedin, Youtube, and other forms of online advertising and boosted/promoted social media postings.

Bottom line is integrity and consistency. You need to do what you say you will do and take consistent focused action every day, answer the phone when it rings and follow up and follow through.