All Forum Posts by: Brandon Kargol

Okay this is an easy one! First, it's not uncommon for title companies to be unfamilar with wholesaling. Many realtors don't even know what it is! Next, if you are doing an assignment of your contract then your title company is correct. You sale price on your assignment contract will be indentical to the sale price on the contract between you and the seller. So where is your profit?! All assignment contracts have a seperate block where your write in your fee for assigning the contract. Say you have a house under contract for $50,000 and you have an end buyer you are assigning it to. Your assignment contract will have the sale price of $50,000 plus (in a seperate line) your assignment fee of say $10,000. So your end buyer is going to need to bring $60,000 to escrow 50K or which goes to purchase the property and then 10k of which goes to your pocket minus closing fees. Make sense?

Yellow letters are hands down the way to go for direct mailing. I have been getting a solid 14% repsonse rate.

Here is what I say

Dear homeowners name,

   Hi, My name is Brandon Kargol. I would like to buy your property at:

                                         123 Distressed Street

  Please give me a call
  Ph: 919-890-0901

  Please call!
  Thanks,

  Brandon

I also include one of my business cards to each letter which I believe creates much more legitimacy verse the letter being simply "junk" mail. My letters are also handwritten. I write one handwritten letter and then use my copy machine to make as many copies as I need. I leave out the owners name and address when I copy the orginal handwritten letter. This way all I need to do is fill the owners name and address in and I'm done. Mae sure you use the exact same pen so the writting all matches up. It's to easy!

Also, my mailing lists are all absentee owner lists.

Okay heres some numbers then knowing that.

$220,000
     x.70
=  $154,000
-$40.000 Repairs
= $114,000 Sale Price To Your End Buyer
-$10,000 Your profit (or whatever your market will handle)
=$104,000 Offer Price To Seller

This is the ideal wholesaling formula to create a win win scenario for you and your end buyer. Assuming your end buy is a fellow investor he's probably going to want a property at around 70% ARV minus the repair costs. Hence the $114,000 sale price to your end buyer. Then you need to subtract you profit/fee to find your Offer Price. Make sense?

Pnade if the property is really worth 184K after repairs and assuming it needs 10k in repairs I would offer the seller right around 100K for the property. Is the seller distressed? Or is this a seller who is trying to get retail prices for his property? Also, you said its estimated value is 184K, but is that the after repair value or is that the value in its current condition?

Okay, what's the property worth?

Second, he owes 220k but is willing to sell for 175k? That means the seller would pay 45K out of pocket at closing to pay the mortage off to even be able to sell. Which doesnt seem right to me... I am sorry, but we need more info to answer your questions.

Joshua,

   There is a plethora of places to find wholesale deals and techniques used to find them.

1. Bandit Signs

2. Craigslist Ads

3. Absentee owner lists

4. Pre Forclosures

That is just to name a few. I have a question for you though. How do you know that wholesaling is something you want to do? I mean you've obviously heard of wholesaling from somewhere that its given you interest in the niche. I'm not trying to sound rude, but if you don't know different ways or places to find distressed properties then why do think wholesaling is something you are even truly interested in aside from the possible income from it? Cause the truth is, not everyone can do this. Self Educate yourself on everything to do with wholesaling, MAKE SURE it's what you want to do and that it fits who you are. There are so many people who start wholesaling cause they think anyone can do it, and many times new wholesalers screw sellers over. I am not saying that you would, all I saying is that you need to make sure this is what you want and that you are willing to do whatever it takes to make wholesaling work for you, and not at a sellers expense.

I know you said you aren't going to be wholesaling the property, however, you're going about this like a wholesale deal. So a couple things.

1. When someone says they want to "close fast" or "sell now". That means absoutely NOTHING. Because every single seller wants to sell as soon as possible. No seller lists their property and wants it to sit on the market for 4 months. They are selling because they literally want to sell and they want it to sell as soon as possibe. So don't get to caught up when someone says they want to sell now, because that is every single seller in the market.

2. If the seller has a contract with the realtor to list the property then you CAN NOT negotiate with the seller directly. From what said it sounds like, this realtor is not a dual agent. He/she is only representing the seller I assume? That being said the lower the offer you make the less the agents commission will be. Your only option to avoid the realtor fees would be to wait until the property becomes an expired listing (if it doesn't sell) and then you are free to talk with the seller directly.

3. Is your offer out the ball park? I don't think so, but it doesn't matter what I think. What matters is whether the seller accepts or not. Make the offer, worst case it's declined. No big deal.

4. I am very confused with your numbers that you say are "saving" the seller money. A seller who lists a property with a realtor isn't that pressed for time on selling the property, so trying to get a price discount by claiming to be saving them time probably will not work. Also, you said the property is being rented on a month by month basis so at this time there is no rental loss.

At the end of the day just make the offer that works for you. There is no harm in doing that. I don't know why a realtor called you when the property isn't listed on the MLS. I'd figure out if there is a realtor in the negotiation or not.

Hope this helps

Brandon

Marketing is a huge part of wholesaling. Without leads you have no business. 

 Here's the concept of wholesaling... Tie up a distressed property at an agreed price and then flip the contract to an end buyer at a higher price. SO SIMPLE. But not easy.

As far as finding out what niche best suits you here's some questions for you. These can be personal questions so you dont have to answer on here. It's more food for thought.

Whats your reason for choosing real estate?
What's your short and long term financial goals?
Are you looking to run a business (wholesaling) or are you looking for more a a risidual income from rentals?

In my investing I don't market for coorporate owned properties. That being said, In my opinion I would address the coorporation by name.

Using your example of ABC Corp,

  Dear ABC Corp,

That's how I would title it. that's just my opinion though, not sure if there is a right or wrong answer.

Okay, while I do not consider myself a veteran of wholesaling... I do know what it takes to get started. I feel for you as well, cause I had similar feelings about beginning in wholesaling. Remember this, wholesaling is SIMPLE, but NOT easy. Whats this mean? It means that the concept of wholesaling is very basic and easily understood, but being successful and effective in the niche is not something everyone can do.

Is it easy to send out letters? (yes)
Is it easy to track leads? (not for everyone)
Is it easy to return calls? (not for everyone)
how about negotiating with sellers and buyers? (not for everyone)

These are just a few things encountered with wholesaling, yet I know for a fact that not EVERYONE can do those things like the gurus say. Some people can't get over the fear of calling people, some people lack the negotioation skills which is a MUST HAVE in this business. If you have a fobia of talking with strangers and building a relationship on the spot then wholesaling isn't going to be easy at all. Sorry but that's the truth. You here the gurus say "oh just get over your fears" or "if you want it bad enough then you'll do it and succeed" Everyone who starts will at some point fall into those qoutes from the gurus. There will be SOMETHING that just isn't easy for you to do. Just push past it though. Even if you stumble and fall along the way to your first deal then guess what, you'll be just that much more knowledgeable for your next deal!

Sorry I rambled a bit. Hope this was helpful!