Brooklyn, NY Wholesalers

[Anthony Greene]

Are there any experienced wholesalers working in Brooklyn, NY with a proven track record that can help a newbie get started on the right track? I would like to treat a seasoned investor to lunch and pick there brain a little. I think the best way to learn is to talk to the people that are actually doing the work and have a successful business.

I am seeking advise on how do you create your buyer's list? How do you find motivated sellers? What kind of marketing is most effective? How do you structure a deal? How do you negotiate a deal? How do you get your offers accepted? How do you build a team that you can trust? How do you analyze a deal? What kind of documents are used? How do you get to truly know your market? How do you find distressed properties? What is the best place to find good comps? How to create a good business model? Do you need help putting up bandit signs? Are you looking for volunteers to help around the office?

BP family I look forward to seeing what you have to say. Thanks.

[Paul Timmins]

Anthony

Research BP read as much as you can.

Check out these 2 articles.

Paul

Finding Wholesale Buyers
1. We Buy Houses Signs I call every single one of these signs that I see, I actually keep a note book full of numbers and info that I find out about these companies when I call.
I usually ask them whether they are still buying, what they are looking for, what percentage up FMV they are typically paying, and what areas of town they want to buy in.
While I have them on the phone I also ask them if they wholesale out any of their homes, if they do then I ask them to call me when they have something good. I tell them that if the deal is right I can close in less than 2 weeks with cash.(I can do this because I have other buyers already in place to buy their deals, sometimes these buyers could be other cash for your house buyers)
Here is a sample of a deal that I put together using this.
1. I called a we buy houses sign
2. Found out where they were looking
3. Put a home under contract for $52k in that area
4. Called them and let them know.
5. I signed a 6 month lease option with them for $64k
6. I closed the home.
7. The lease option started
8. He sold the home
9. We close this week, I make about $12,000 (I also made commission when I bought the house, because I am a realtor)
10. He makes around $12k.
11. Were all happy.
2. Call realtors I call realtors and find out if they have any cash buyers that are looking to buy some wholesale deals. It varies on what I offer to pay them but typically I offer 10%-20% of my profit, or a flat 2-3% fee, each time the buyer they have given me buys a home. It creates a win- win, I get a buyer and they get paid whenever their buyer buys a home.
I offer the continuous pay because a realtors worst fear is that they give you a buyer and he buys from you, then when they have a good property to show their buyers they cannot buy because they have already purchased from you.
If the realtors don’t have cash buyers, I tell them that if they bump into any great deals, they should call me and if the deals good enough we can buy with cash and close in less than 2 weeks.( Often times you can use other realtors buyers to buy another realtors house and you can make money setting the two up)
An example of one of my clients deals that he ran this way.
1. I called my client about a great HUD deal
2. He liked the deal and put the home under contract for $115k (I made a $4800 commission on the home when it closed so I was happy)
3. We had 60 days to close the HUD home so he started calling realtors
4. He found a realtor with a cash buyer that was willing to pay $122,000
5. We assigned the contract (this is a secret)
6. We went to closing and his buyer brought $122,000 cashiers check.
7. My buyer left with a check for $7,000 ( he used none of his own money, and I found him the house so he was happy)
8. I left with my $4800 commission
9. The realtor who brought the buyer took no commission but got a commitment from his buyer that he would list the home with him when he sold it.
3. Newspaper AD’s I don’t personally use this one, I have clients who have had great success with it though. They simply place a small classified ad that reads "Looking for buyers to purchase homes at 50-70% of true value"
I have picked up endless buyers with this ad though "Free List of 45 foreclosed/distressed homes" call or visit www.$$$.com. The reason that I have had so much success with this ad is because anyone thinking of buying real estate would much rather get a free list of 45 then have to call each individual ad. You can have a local realtor put together a list of properties for you and email them to you if you cannot find your own. Then take the list that they send you and email it out to people that respond to your ad. Keep in mind you don’t really care about the list that you send, you care about getting the name, phone number, and buying qualifications of responding buyers.
A real life example.
1. I placed my free list ad
2. I got about 30 responses for the month
3. Found one buyer who has paid me over $75,000 in commissions over the next 3 years on deals I brought him.
These were realtor commissions, but if you can find a buyer who is taking the kind of action he was you could seriously line your pockets wholesaling to him.
4. HUD homes this is my own technique that I started using to get buyers just for my realtor purposes. Watch for a great deal on a HUD home or any great deal for that matter, then park outside for a few hours and talk to the people going to check out the home. Most of the areas investors will find there way to the property and you can give them your card and be sure to get their info. Tell them that you run into alot of deals and ask them if they would like you to give them a call when you run into something decent.
A personal example.
1. I went to look at a good HUD home that I was going to buy myself.
2. The neighbor came over and wanted to see the home while I was there.
3. I showed him the home and he ended up buying it from me.
4. I ended up making $2500 in commission on it.
If I were not a realtor, I would have simply talked to him and found out what he was willing to pay, then wrote up a wholesale contract, then put the home under contract with HUD, then played the spread.
This was my most recent deal, but I have picked up endless buyers for other homes while parked outside of HUD homes. I call it hunting for buyers. Its kind of like deer hunting with a bait pile. The home is the bait pile and the buyers are all coming to eat.
4. Talk to your current buyers buyer typically know other buyers, ask your buyers if they know of anyone else who is buying (let them know you will only call the referral if they are passing on the property). You also might offer to pay your buyer for a referral fee if one of their people end up buying a house from you. This technique also works great if you have a buyer that only wants to buy in a certain area, then you can call their referral if you have a home outside that area.
Personal example.
1. One of my buyers had too many homes and could not buy.
2. I asked him if he knew anyone else who might be interested.
3. He gave me the number to a cousin who was an even bigger investor
4. I ended up selling 3 homes to his cousin this year, and paid him a referral for each one.
5. Local REI meetings If you have a local investor club join it, if you don't then start one. It kind of speaks for itself that this is where many great buyers will be. Just be sure you know a fair bit about what you are doing before talking to very many people about potential deals. The last thing you want to do is burn alot of bridges by showing your new found buyers a bunch of lousy deals.
6. Birddogs for buyers Outside of having bird dogs look for homes for you, you can also have them look for buyers for you. Give them your cards and have them hand them out to people they might meet that are looking to get into real estate investing.
7. Brochure Boxes Just like realtors use brochure boxes you can use them to. If you have a property to move leave a brochure box that talks minimally about the property that it is left at, always be sure to leave out pertinent info like price, sq.ft., or bed/baths. If you give all the info away then people will never call you about the property. Focus the brochure mainly on other potential deals in the area or say that you are looking for buyers for properties at 50-70%FMV.
8. Out of town owners and landlords Many people sell themselves short when they are dialing for dollars. Typically people call or mail out of town owners and other landlords to see if they want to sell. The funny part is if they don’t want to sell then there is a chance that they want to buy, so ask them if they aren’t selling, then would they like to buy some more, or if your mailing then include buying info on your mailer as well.
Eric Medemar

CONTACTING CASH BUYERS

A list of cash buyers is essential to any real estate investor that will wholesale properties. As a wholesaler you are a matchmaker. You put properties under agreement and then you identify buyers in your list that are interested in that type of property. The easy part is the matchmaking; the hard part is building this list. Most wholesalers have issues with building a list or find it difficult because they only focus on one or two methods. They don’t understand that you must market for them and have lots of them on your list in order to increase the chances that you will find a buyer for your next deal. Below you will find many ways to build your buyers list. Use as many of the following methods as possible when building your buyers list. Remember just because you might not want to buy properties in certain areas such as war zones doesn't mean you won't be able to find cash buyers that like to buy in these areas. As long as the property is a deal, there is always a buyer since every buyer has a different buying criteria. Below is a list of ways to find all the cash buyers you'll ever need.

1. www.craigslist.com – So unless you have been under a rock for the past couple years, you have heard of craigslist.com. Craigslist is a centralized network of online communities, featuring free online classified advertisements – with sections devoted to jobs, housing, personals, for sale, services, community, gigs, résumés, and discussion forums. In order to use this service to find buyers post a property for sale or post a ghost ad. The best strategy for Craigslist is that you must repost your ad every few days because the listings are shown from newest to oldest. You may find in some areas your listing goes off the first page of listings within a day or so and many viewers are not going to page 2 so keep your ad fresh by updating.
2. Attorneys or Closing Agents– Attorneys or Closing agents are a great source because they are closing the loans for the hard money lenders and know the people who are paying cash. Contact the attorney you are doing business with and ask them who they know that buys real estate using cash or hard money. They may be interested in the opportunity themselves or they will know an investor that is. If you don’t have an active deal to share with them, then tell them you come across properties from time to time that need work and have a good deal of equity and wanted to see who they know that would be interested in a property like that.
3. Hard Money Lenders – Hard money lenders will have a huge buyers list to share your deal with. They are more than happy to do this because by finding a deal for one of their clients, they will not only make one of their clients happy and loyal they will be able to lend more money and make some profits in the process. When contacting hard money lenders, don’t forget about the large national hard money lenders. In many cases they will have a website to post the property to or they will send an email out to their list because it will increase their chances of lending more money.
4. Mortgage Brokers – Mortgage Brokers will have a list of investors or cash buyers. The reason they have this list is that from time to time loans fall through for a buyer and when this happens the seller is usually put in a bad position and needs to sell quick. They will call their cash buyers and get them the house at a discount to help out the seller and the selling agent involved. Mortgage Brokers also have access to hard money lenders and may be able to tap into those resources as well and may be able to help you identify a few hard money lenders that you can contact.
5. REIA – Your local real estate investment association (REIA) is an excellent place to grow your real estate investing business. If you are not going to at least one meeting per month you are missing a ton of opportunity. If you have more than one meeting within an hour drive of where you live, attend them all. To find these clubs or associations, go to www.nationalreia.com . Go to both sites as neither has a complete listing of REIA's. It is not enough to just go to these meetings, you must get involved. Volunteer for something to help with in the club so that you can make a difference. Help put together the newsletter or offer to greet people when they check in for the meeting. Make sure that you are networking with as many people as you can. You may find that many people who attend these meeting are also wholesalers looking to find buyers. If that is the case you want to talk to them because there may be times when you don't have a buyer for a property but they do and you can work out some sort of deal. The other thing you can do is ask the person who runs the group to introduce you to some of the more active investors in the group, the investors that are actually buying real estate as opposed to just talking about it. There are many other things you should be doing at this meeting but use the networking to build your business.
6. Apartment Owners Association – The apartment owners association is a great place to find buyers since all the members own apartments and are looking to add more properties to their portfolio especially when they can get them at a discount. Even if you are focused on single family properties, now may be a good time to think about wholesaling multifamily properties as well.
7. Local Rehab Projects – In your area there are many properties being worked on right now and most of these projects are owned by investor/rehabbers. These houses are pretty easy to spot. They usually look vacant and have a bunch of contractor vehicles in the front of the house. Walk up to the house and talk to the contractors and ask how you can get in touch with the owner as you may have some properties to wholesale that they would be interested in. Sometimes you will find that the rehabber is the owner and other times you find that you will have to provide your card and they will have the owner contact you. There may also be a for sale by owner sign in the front yard and that might give you access to the owner as well.
8. Sold REO's – Search the MLS for bank owned properties that have sold over the past 6 months in your area. If you don't have MLS access then ask a Realtor to pull these for you. The buyers in each of these transactions should be on your buyers list. Take the address of the property down to the registry of deeds and look up who the buyer is in the Grantor/Grantee index. Get the contact information for the buyer and then send them a letter and try to find their phone number.
9. www.rehablist.com – Rehablist.com is a great place to find buyers because the buyers in your area are searching these listings each and every day looking for their next deal because they don’t know how to market and they rely on wholesalers like you to bring them deals. On this site you can post a property that you are looking to wholesale or a ghost ad of one. I know one investor that uses this site to find deals and then he promotes them to his buyers at a higher price and makes money that way. Yes you got it a double wholesale deal. If you are creative in real estate, anything is possible. Listing at RehabList.com is FREE, EASY, and PROFITABLE! Your Listings will have HUGE TARGETED EXPOSURE to our network of buyers/investors! Your contact information will be on every one of your listings. Another powerful internet resource at your fingertip with multiple uses. You can post to get more buyers or you can remarket the listings here to your buyers for a nice easy profit. Either way, it is a win-win strategy.
10. Title Company – Title companies have a database of cash buyer, they just don’t know it. They can search their database and tell you which buyer bought using cash as opposed to a loan. They can also search on purchases using hard money. Contact your title company as ask for the list of cash transactions for your area. You might want to put a few limiters on the list like location and price just to help narrow down the list.
11. Information/List Broker – In some cases you can go to a list broker or information broker to get the information that you need. You will have to pay for the information but for the short money that you are paying, the rewards will be endless. Request transactions that have closed without loans in the price range that you are looking in. See what other criteria they will allow you to search on.
12. Classified Ads – Search all the classified ads in your local newspapers. The type of ad you will be looking for will say we buy houses or something to that effect indicating that they are a real estate investor. Contact each of these and use the script to put them on your list. Remember to also search online classifieds such as craigslist.com, kijiji.com, and backpage.com.
13. For Rent Signs – For rent signs are another great way to find buyers. It doesn’t matter if the sign is in front of a single family property or a multi. In many cases it is owned by an investor that is one of two positions. They are either looking to buy more properties or they are looking to sell. Either way, the call will be worth the time.
14. Auctions – Auctions are by far my favorite place to meet cash buyers. First of all they are qualified because in order to bid at the foreclosure auction they need to show a cash deposit and agree to close in 30 days or less. We also find that the investors that buy at an auction usually don’t buy properties through other methods because they don’t know how but auctions are an easy place to find a potential deal in real estate. If you don’t know what happens at a foreclosure auction or Sheriffs Sale, the investors line up outside the property or at the courthouse steps. Either way they are not allowed access to the property by the auctioneer and most have not been inside the property unless the seller has allowed them. They are taking a ton of risk buying something that they have not seen the inside of. Imagine what will happen when you explain to an investor that you can give them better deals where they won't have to bid and they get to go into the property before they even make an offer. They will be delighted and you will have a great buyer that will now rely on you for great deals.
15. Wholesalers – Wholesalers are a great way to build your list. Now don’t expect to contact a real estate wholesaler and expect them to just hand over their list of buyers but you can market your deals to them so that they can markup the price and share with their buyers or vice versa. Networking is key in this business, don’t look at your competitors as competition, look at them as strategic business partners and leverage that relationship to benefit both of you. If they bring you a buyer, agree that all future dealings with this buyer will go through them so they don’t get cut out of the deal in the future. The wholesaler should mark up the property price to include their profit or if the deal is skinny ten offer $1K-2K for bringing the buyer.
16. www.postlets.com – Postlets.com is a great resource to find buyers. This is a website that you can post a property that you have under contract and are trying to sell. You simply add all of the property information to a customized dedicated webpage. Don’t have a property yet but want to build a buyers list? You can place what is referred to as a ghost ad. Make up a property but make sure that it looks like it is a good deal that investors would be interested in mostly because of the price and that it needs work. When cash buyers contact you, tell them the property is not available but you would like to add them to your list. The best part of the website besides the fact that it is FREE is that it will syndicate the information to several classifieds search engines and will it will get you listing on most of the major social networking sites (Twitter, Facebook), online classifieds (Craig’s List, Backpage, Kijiji), and Zillow just to name a few. This service will get your next deal in front of the cash buyers that you are looking for.
17. Bandit Signs – Bandit signs are those brightly colored signs you see on the side of the road that usually say WE BUY HOUSES CASH. The person at the other end of the phone will be either a wholesaler like you, a rehabber, or landlord. Either way they will make great people to add to your list of buyers.
18. Realtors – Realtors have a list of buyers. Typically you will need to have a deal to market to the realtor to get the buyer but if you have a good deal they will bring the buyer. They will be looking for compensation for doing this either as a flat fee or a percentage of the purchase price. This will mostly be dependent on what deal you negotiate and the price of the property. The good news they know buyers and can really make the process smooth as you will be dealing with a more experienced person.
19. Landlords – Landlords make great additions to a buyers list. Problem is that it is hard to find them or get their phone number. We mentioned above to call for rent signs and that is one effective way to contact them but there is a list that you can get if you are willing to make one visit to your local section 8 housing office. Go to the section 8 office and tell them that you are a prospective landlord and you are considering sect 8 renters and want to speak with someone about the program. While you are getting the details on the program from a landlords perspective, at the end of the conversation tell the person that it all sounds pretty good but you would like to speak directly to several other landlords in the program to see what their thoughts are about the program and ask them of a list of landlords that you can contact. They will provide you a list of landlords that participate in the program including their phone number. Call all of the landlords on the list and ask them a few questions about the program but during the conversation be sure to ask them what mode they are in right now, acquisition or selling. If they want to buy you are in luck and can add them to the list. If they are looking to sell, you might be interested in the property or may have a buyer who is interested. Either way it is a great call.