All Forum Posts by: Doug Pretorius

Driving for Dollars or farming a neighbourhood are two of the best ways to find off-market absentee owned property. You can ask neighbours if they know how to contact the owner. If not you can run a tax record search or a title search to hopefully find the owner. It's not cheap but it's just about the only way to do it here in Canada.

Motivated sellers who still live in their properties are easy to find: FSBO sites, expired listings, cold calling and door knocking are all effective.

What I mean is that retail sellers, the ones you find on the MLS, are motivated by getting as much cash from their sale as possible immediately. They don't have a NEED to sell they only have a WANT as in: "I want to get rich off of the sale of my house so I can buy a bigger one." These are not the sellers you should be talking to if you want to make money.

Wholesale sellers, the ones you have to find yourself through marketing, are motivated by something else. They NEED to sell and they don't care how much cash they get. Basically owning their property has become a problem and they need you to solve that problem for them.

Spreading out the tax hit. Occasionally you'll find a seller like a retiring landlord for example who wants to avoid the huge tax liability of selling their portfolio for cash. This is a prime situation to get some nice seller financing. Seller financing allows them to spread the capital gains out over many years by reporting it as an installment sale.

"Hi my name is Simone. I'm looking to buy a house in your neighborhood. Do you know anyone who's thinking of selling?"

Asking if they know someone takes the pressure off of them. They will volunteer the info if they're thinking about selling themselves.

Don't forget to tell them that you pay for referrals and ask if you can keep in touch. Then get their best phone number and email and put them into your follow up system.

@Mike Schorah You need money for closing at the very least. In most cases you also need to pay the seller moving money. And you usually need money to do repairs. That's why sub2 is not recommended for new investors who don't have cash reserves.

As @John Williams mentioned you can wholesale sub2s. But I don't recommend it. If you want to do it please thoroughly vet your buyers to make sure they have the cash reserves and ability to get new financing if the bank calls the loan due. Otherwise you're just setting sellers up to get screwed.

Lonnie Scruggs used to say: "When my calculator says 'E' I figure my ROI is good enough."

Thanks for sharing the whole story about this deal.

Say it ain't so, Mike! You broke the cardinal REI rule: Always get paid to buy houses!

But maybe we can forgive you. Just this one time. Don't make it a habit.

Looking at the house won't tell you anything. The deal lies in finding a seller who's motivated by something other than cash. Some can't afford their payments, others want income over time, still others need an unconventional sale to spread out the tax hit. They all have one thing in common: They don't need or want all of their equity out in cash immediately.

@Jon LaBorde Absolutely! You can wholesale various types of seller financing to other investors or to end buyers. You can set this up as a lease option, a contract for deed, or a seller carry-back. The only thing you shouldn't wholesale is a sub2 purchase. Those you should keep for yourself and only if you have the resources to finance them if the bank calls the loan.

As @Kerry Noble Jr said right now is the time to get some great terms and you would do well to hold on to some of those seller financed deals.

@Elijah Dominguez What did I learn when you were in diapers? I learned that I don't like wholesaling as most gurus pitch it. I didn't have a particularly hard time finding houses well below market value. But I hated traipsing through bug-infested hell holes guessimating repairs.

Thankfully I discovered that you can "wholesale" pretty houses. It's a much more pleasant experience and you can make similar profits.

Kijiji, craigslist, facebook. @Anthony Therrien-Bernard is right that most of them list with flat fee brokerages these days so you need to work with an agent to send you those listings. Same with expireds. Here in Ontario expired data is public which makes it a little easier.