i am a newbie to whlesaling and also reos and I have a potential buyer that gave me very specific parameters for what they are looking for and I want to search for a property for them so i can then sell it to them by doing a double closing on the property. Can I give them information on the property, comps and rental info but NOT the address and if they are interested then put in an offer to the reo listing agent and then once it is under contract then give them the address. My concern is that if they have all the information before it is under contract they may just go straight to the agent. What is the normal chain of events when doing an reo double closing deal?
From my experience, I know how buyers hate it when a wholesaler tells them about a property that is not in contract yet. Don’t waste your time researching on a property where the seller is not willing to take your offer. I say get the properties tied up for a great price and the buyers will come. This is how things are normally done. Hope this helps.
I actually disagree, when I wholesale I buy properties my buyers want!! I built my buyers list first then ask every buyer to answer a questionaire I created which allows each potential buyer to specify exactly what they are looking for in what area! I don't have the time to buy something and wait 15, 30, 45 or 60 days or longer, I need to be able to search for and find appropriate properties for my buyers needs!
I also do not actually own each property but control and execute the contract and make my money either by “Assignment of Contract” or by using “Transactional Funding” and I only buy what my buyer’s require!
I have said before “If a Real Estate Agent or Broker with access to the MLS can not sell a home in 1 to 10 days” and the “Average days on market are 64 days” what makes you think you can buy a property without having a buyer and expect to sell it in 1 to 10 days???
Wholesaling can be so easy yet most investors want to make it more difficult than it needs to be!
I only say this because for someone who is starting in this business, you have to be able to learn how to negotiate with sellers and close contracts with them. After all, a wholesaler’s main product/service are properties that can be bought by cash buyers at a value so they can rehab them. So it makes for good practice and in time, after a few deals closed with both sellers and buyers, a wholesaler can slowly build a buyer’s list which would make future deals for him easier to close. Relationships with buyers are long-term compared to sellers, so it makes sense to establish yourself as a wholesaler with an actual property/properties so they know they can expect something from you if they are ready to buy. When you have establish your own buyer’s list, it’s absolutely a great idea to know every time if there’s something they are specifically looking for. You’d like to be able to provide them with something if they ask what you currently have under contract.
Wholesaling through the MLS is not impossible, just improbable. There are several reasons.
First, realtors have priced the properties. They are paid by commission. The more they sell the property for, the greater their commission. That is why most properties are at or very close to market value. Not that you can’t find a good deal in the MLS but the profit margin for a wholesaler will be much smaller.
Second, it is like you said, buyers can get access to MLS listings (including REO) though other agents and online sources. So finding a “great deal” that they can cross check with a little work on their behalf is going to create problems down the road. If you can locate non-MLS listings, now you have an unknown property.
So, if you want to farm the MLS, go ahead, but you may find outside deals more profitable.
That is exactly what you should be doing. You should be finding out where you buyers on your list are interested in buying and that is how you can proceed to get your deals. Place signs in these areas and then see if any sellers bite. Bandit Signs. :shocked
I would say go after private sellers and leave the MLS alone. Any and everyone can gain access to the MLS at the drop of a dime. Properties are selling way above asking price on these properties because the majority of them are in multiple bid situations. Investors drive these properties by being in bidding wars, which means a much smaller window of profit margin for you to work with. When dealing with private sellers its just you and them. No Competition. To your success