Wholesaling thru covid

[James Santana]

So how has vivid affected wholesaling, in my I am working on a few shorts with an investor I work with and the auction courts have been closed, also the governor is pretty much looking to shut everything down so how are other wholesale Kessler getting thru these times?

[Hugo Alves]

@James Santana

Most individuals are not using their own cash, they are leveraging hard money and/or bank loans. For individuals using hard money, many lenders have changed their financing requiring more money down and lower LTV. This has caused many deals to fall apart. Hard money is also not lending on new construction and some not even on add a level projects.

Minor renovations and quick fix and flips are still closing but within the new lending requirements. Sad to say, a lot of the investors don’t have the liquid cash to come up with an additional 10% down, 6 months reserves ect.

The business will still continue but I’d look into your contacts and find your cash buyers and run the deals through them.

Lastly, comps and ARV from last month won't work in this market right now. I still see wholesalers sending out deals in areas that were inflated and no one is buying. Make sure your numbers reflect everything that's happening and if not, go back and negotiate.

Finding alternative ways to finance the deal will also help. Explaining to the seller, who knows what’s happening, that you may have to offer a seller financing deal, if it fits, can also help getting through some of these transactions.