Frankly as a wholesaler, your license, your credit, and your capital do NOT matter.
What matters is your discipline and follow through.
Making offers to MOTIVATED sellers is the number one thing you need to focus on. The MLS is not the place to find deals and neither is a FSBO magazine. If there is a sign in the yard saying “For Sale”, it’s probably not a deal. You need to find sellers before there is ever a sign in the yard.
This is done through passive marketing (ads where they call you) and proactive marketing (where you track them down and ask them if they want to sell). Passive marketing is expensive but doesn’t require much time to keep it going, proactive marketing is cheap but requires continued energy and effort.
As others have also put it, focus on finding a deal by making lots of LOW offers. These offers need to be directed towards motivated sellers or you are wasting your time. Your first deal is your hardest, so it’s good to get it out of the way, but get educated enough so you don’t completely destroy yourself on the first one.
Deals are everywhere in every market. You just need to learn where and how to look. As long as people are still buying and selling, there are deals to be found
That is good advice, but what are the positive places to pursue for good deals? I have spent the last three and half weeks going through REO properties and have found what I believe to be descent to good deals(net profit margins 14 to 18 average percent after considering all costs), but my investor feels the repair cost is more than they want to deal with(average repair cost 15k - 20k for homes that will retail in 150k - 200k range). Am I chasing the wrong type of property? Are these margins good or bad?If bad where the best type to pursue? Thanks for your advice!
Others may disagree but I think the whole answer to your issue keys on two words you used:
“my investor”
Not every deal you come across will meet every investors’ needs or criteria.
Wholsaling is a volume game and a relationship game.
So why limit yourself to one relationship?
That’s why it’s your JOB as a wholesaler to FIND (and ideally contract) good deals but it’s your BUSINESS to build relationships with, find out what they want/ can buy / how they buy and DATABASE as many investors (especially the big rehabbers in your area- these people are easy to find just pay attention to the “We Buy” signs and call them) like that as possble so that you can present each what they are looking for if and when it crosses your desk FIRST and if they don’t bite have a list of people accustomed to hearing from you who will take your call or read your emails when you let them know you have property worth looking at.
Oh yeah, I need to remind myself to post an investor questionaire it’s helpful to use when calling these guys and first introducing yourself. LOL I don’
t even know if thats possible to attach a Word Doc to a forum post.
Depending on the market conditions in your area finding motivated sellers may not be the key to wholesaling success.
If the market in your area stinks then motivated sellers will be all over the place and buyers will be a scarcity so that is where you need to place your focus.
If the market is great then that means there are alot of buyers so you don’t need to put as much focus on finding buyers as you do finding great deals.
In any case I would typically put my efforts into building a strong buyers list because the best deal in the world on a home is not worth a penny if you don’t have any buyers.
Having said that, the best buyer in the world will buy many times over, while the best house in the world can only be sold once.
How are you finding vacant houses?? The only thing I seem to find on here is to “drive around” and driving around has got me NO WHERE. I never see any properties that are crying out “DISTRESS” or that even look vacant for that matter…The only time I have seen these types of properties are in really bad neighborhoods.
How are you finding vacant houses?? The only thing I seem to find on here is to “drive around” and driving around has got me NO WHERE. I never see any properties that are crying out “DISTRESS” or that even look vacant for that matter…The only time I have seen these types of properties are in really bad neighborhoods.
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Do you live near a Metropolatin (sp?) area? I’ve found that neighborhoods located near downtown typically have a lot of investor activity. They also have old houses - some are boarded up.
I’ll give you an example: Recently, I visited relatives in Houston, TX. I have a relative in CA that owns rental property near downtown Houston. The home values in that area have been going through the roof. I found a boarded up house in the area, and a neighbor (who rides his bike) said that there are lots of boarded houses in the neighborhood. These are houses that look like they should be bought for 100K but you could fix them up & sell for over 300K.
Here are 2 things to look for when you drive neighborhoods, investor activity & what Realtors have for sale signs. Obviously, for sale signs from Realty firms that are “big name” means there is a lot of interest in the area…
Trdsman, a $20,000 repair is a pretty substantial renovation.
In a market where prices are unstable or going down, many investors don’t want to take on big repairs that will take a lot of time to complete. They worry that the market will drop while they are getting the house ready to sell.
Also, when you are looking at a house that at first look needs $20,000 of repair, you are almost guaranteed to find more repairs when you start tearing into the house. To need that much repair, the house has been neglected
If you want to wholesale houses that need supstantial repairs, you are going to have to be able to sell them super cheap. I’m not ssaying that the investors won;t buy them, but tehy want huge margins for error and room in the value in case the market drops substantially.
If you can find house that are cosmetic: paint, carpet, yard work, the investors will like them better. Those will be well-cared-for houses that the owner has recently fallen upon some sort of hard times.