Hi,
I've made it a point to focus my REI on doing rehabs. As a result, I have invested neither time, effort, money, nor energy into wholesaling. (However, I would consider bird dogging deals to a wholesaler in exchange for some priority). I do this, I think, for better or worse.
First, the better. I think focus and clarity is critical in moving ahead. It's so easy--and tempting--to be distracted about some new latest greatest technique. Even more dangerous, it's also tempting to believe that wholesaling is easy and doesn't cost much (I believe it's an acquired skill, that takes lots of investment of time, effort, energy, and money). So, I've focused instead, on trying to find the greatest wholesalers in Los Angeles, in particular in the San Fernando Valley and more particularly in Northridge and Reseda. But, over the past few weeks, I've not had great luck.
Now, luck is nothing more than a measure of your effort and energy (read: The harder I work the luckier I get). So, I thought I'd share with the group my current game plan on how to find either the established local superstar wholesaler--or, nearly as good in my mind--the superstar who has started his climb up the mountain (because I'll happily latch my wagon to his and we can both make money on the way up).
So, here's what I'm doing to try to find wholesalers in Los Angeles (Reseda and Northridge) right now:
1. Going through the forum posts to find active members (more emphasis on the pro members as it shows they have some commitment to the business) who list themselves as wholesalers. I present all of them with my one page synopsis of my current and very focused plan (you can find it here: https://docs.google.com/document/d/1LdWXhU9Ot5S3UF...).
2. Calling wholesalers who have bandit signs up in the area;
3. Calling wholesalers who advertise on the radio (I heard a radio ad last night);
4. Finding the local contractors on Bigger Pockets to see if they can lead me to the superstar wholesalers; and
5. Finding and networking with Hard Money and Private lenders to see if they can lead to me superstar wholesalers;
6. Developing a list of the local escrow companies and see whether they can point me to the superstar flippers.
7. Try to find other rehabbers who would be willing to partner if I bring funding to the deal--in that scenario I would expect to be referred to their best wholesaler and construction crew.
Now, I said for better or worse. the worse is I spend three months trying to find a superstar wholesaler who can get me a deal, but fail at that task. What are the risks that make up the potential failure? First, even if I find a wholesaler, why would they sell to me--an untested REI--when they can sell to their all-star buyers list, particularly if those buyers closed 50/50 of the last deals, pay all cash, and show up and write a check. So, what's the natural progression--or what should the natural progression be, all else being equal? It should be that the all-star rehabbers/investors work with the all star wholesalers, unless there's some reason not to. The reasons? 1) The deal sucks, so the all star investors refuse it, and the wholesalers naturally work down the list; or 2) the wholesaler will consider those further down the list, but only if the investor will offer something extra for the wholesaler (equity or greater cash I suppose).
It reminds about the old adage about how a movie director gets their first move: Somehow. So, somehow there has to be a way. For me, I'll just keep working at it, contact by contact. Something's got to give somewhere right?
Anyone want to add anything to the list? Or, even better, criticize my thinking? I'd be delighted. Honest.
--Craig.
