Beginning Wholesale Investing

[Lyndon Moore]

So I quit my job on January 29 and I’m Taking real estate seriously, my primary method of investing is Wholesaling On-Market Properties.

I have a really tight budget and I rather not spend money On marketing starting up.

Here’s my question:

If I’m starting new to wholesaling where would I find proof of funds to show to the seller/sellers agent ?

[Lydia R.]

@Lyndon Moore So I dont mean for this to sound harsh, Im really saying this to prevent you from making a HUGE mistake. You quit your job to wholesale on market properties? And you dont want to spend any of your own money? Thats not how it works dude. Ive been wholesaling full time since 2013 so let me let you in on a few things:

1. On market deals have the most competition. Everyone sees these deals. Other agents with investor clients, hedge fund guys that buy hundreds of homes a month, potential owner occupants, house hackers other wholesalers and you. Everyone sees these deals. The ones that are deals will sell to the person willing to pay the most money and that is never a wholesaler

2. On market properties have a gatekeeper. The listing agent. This person will not give you any information you can use as leverage for negotiation. You will deal directly with them and they have a fiduciary responsibility to help their client accept the best offer.

3. Agents require proof of funds. There are plenty of companies out there that offer fake ones. Thats called fraud and you really dont want that in your life.

4. Agents want earnest money. Typically thats about 1% of the purchase price. No POF, No EMD...no deal for you.

5. You will not get a long due diligence period. Once your due diligence period has expired then you are obligated to buy the house. You can still back out, but you open yourself to a specific performance lawsuit.

6. I see you are in NY, if you are planning on wholesaling in NY there are some things you should know. Your contracts arent assignable. The sellers attorney is going to write up the contract and it will not be assignable so either you have a bada** attorney that can negotiate to get assignability (this is possible) or you are double closing.

7. There are a LOT of buyers that feel some type of way about paying a wholesaler a fee for a property that they didnt actually find. Unless youve negotiated a phenomenal deal( not impossible, but difficult to do in a sellers market) there will be buyers that will not buy it because its listed. There will also be shady buyers that will just call the agent and tell them you are marketing the deal for $X and why not back out and accept their offer of $Y instead.

8. Im not saying there are 0 deals to be had on the MLS, but they are few and far between. If youve quit your job and have no income coming in then you will not make enough consistently enough to bridge this shortfall. If you say you got this idea from Jerry Norton then 🤦🏽‍♀️🤦🏽‍♀️🤦🏽‍♀️

As someone who has been wholesaling for a decent amount of time, I can tell you how difficult it is to find deals on MLS. You dont know what you dont know so In sure in your head it sounds easy. Im telling you that its not. Off market is the way to go if you want to be successful. This is just my advice. You can take it or leave it. Ive seen a lot of new wholesalers fail. Im just trying to help you not be another one. Im certain there will be some pretty harsh comments coming your way. There are a lot of BP members that absolutely abhor wholesalers in general, not to mention the ones that look for deals on the MLS. Good luck, feel free to reach out if you need guidance on finding off market deals.