I have a couple of questions for the experienced wholesalers out there.
When you find a great wholesale deal do you line up more than 1 buyer in the event that the first buyer can’t close?
Do you ever allow your buyer (or seller) to see how much of a profit you are earning?
In the event you find a truly incredible deal (80-100k+ possible profit) have you ever taken on a partner to fully benefit?
How many possible buyers should a new wholesaler aim to have before looking for deals?
Finally when meeting with a seller and presenting the contract, do you find it easier to just go with a RE contract from the state or do you prefer to have a different contract with your own escape clauses and addendums added?
I was thinking of just going with a standard contract and offering 10 bucks as the deposit. (basically I won’t add any clauses to the contract other than making sure I have 30-45 days to close the deal) Does anyone see a problem with that strategy?
I got sidetracked for a few weeks but I’m looking to get started tomorrow afternoon with contacting investors. I plan on calling REI ads in the paper, bandit signs and any other advertising I find for investors, I’m hoping to maybe add 15-20 investors to my list this way. I will try to post my success and failures on this site for any other new wholesalers out there.
Thanks for any advice or answers to my questions
Keep in mind that I haven’t done any wholesaling yet but
1. When you find a great wholesale deal do you line up more than 1 buyer in the event that the first buyer can’t close?
2. Do you ever allow your buyer (or seller) to see how much of a profit you are earning?
If you have done the job right they are making profit on it as well so I would have no issues being honest.
3. In the event you find a truly incredible deal (80-100k+ possible profit) have you ever taken on a partner to fully benefit?
I tried having a partner not long ago and found that he wasn’t nearly as motivated as I was. He was just in it for a quick buck. I have yet to run across a deal that I needed a partner on.
4. How many possible buyers should a new wholesaler aim to have before looking for deals?
I would say no less than 10. I have been building a buyers list for 2 months now and only have 7 people on it. I have only been running ads and not calling bandit signs or other ads. I started slow and now it has just taken off.
5. Finally when meeting with a seller and presenting the contract, do you find it easier to just go with a RE contract from the state or do you prefer to have a different contract with your own escape clauses and addendums added?
IMHO you should stick with the State contract. Everyone is familiar with it and I believe it doesn’t hold any suprises.
Your contract needs to have an out or two. Also please do not forget to make it assignable. My lawyer drew up my contract for $75 and I will just make copies of it.
I am sure more seasoned investors will have some better input. Congrats on just getting out and doing it.
Cool blog, I am just starting to turn my business around also and make some change. Are you in Houston??
I created a buyers list from the first property I got under contract. All it took was a newspaper ad and I screened the callers and asked them questions that let me know if they were a buyer for the list or just a person interested in handyman special.
I got about 100 calls from the list and several serious buyers. I took their email and made up a directory in my Outlook. Because I am in my local real estate club I also have met some buyers that way. I have added their email to my outlook folder too. Now when I get a house under contract I email my buyers list online. If I get a buyer under contract and others are still interested I let them know I have a buyers contract and they usually let me know to call them if the deal falls through.
The buyer never sees what I make because I don’t assign my contracts. If I assigned them they would know my profit, obviously.
I have never taken on a partner and only would if I had to craft a deal that was over my head.
I use the standard contract from the state and add in addendums at the end if their is something I might need to address.
Thanks for the advice guys, I appreciate the input. Well, it’s time to get my feet wet today, I’m going to get started on my list this morning. I’ll probably call my lawyer as well, I really want to make sure I’m well covered on the contract side of things.
DHarrell, I’m actually in the Chicagoland area. However I would love to relocate out to Texas on of these days, Chicago weather is’nt the greatest. :biggrin
Well I got started today with calling a few ads from the Chicago SunTimes. I had to get over my initial nervousness, I’m kind of a quiet guy so it took a little nerve to cold call so many ads. But it turned out rather well, I talked to a few investors (about 6 or 7). Some of them were really brisk, while I managed to talk to about 3 or 4 who seem like real players in the investment game (time will tell). Tomorrow I will pick up a local suburban paper that covers my town and a few others, I’m hoping to find a few more contacts.
Since I have a few potential buyers I think its time to kick in my marketing plan. I have couple of boxes of postcards advertising my business, one the cards is marketed towards people who need extra cash. I’m basically stating that I will pay money for real estate leads, the second card is just a “we buy houses in any condition” type of message. Well time to get busy handing these out, I will check in later with my successes or failures.