Hey, this is my first post so please bear with me… I’m very eager to start wholesaling in the Southern Cali area but I am wondering if now is the right time for me to get started? The recession & continuing housing market decline has me worried. I guess my first step would be to find buyers/investors & that brings up my next question… Are there many buyers still doing flips right now since hardly anybody can really buy a home? Does anyone care to share how this has been affecting your business? :huh
I don’t really know of many buyers in my market who are fixing and flipping (except the ones whose exit strategy involves mortgage fraud, and there are several of those) but there are a lot of people buying and holding. I have several landlords that are snapping up rentals as quickly as they can. They are buying them with huge discounts, but they are still buying if the price is right…
Find some buyers and find out what they are looking for, then go locate it for them.
I’m seeing the same thing here in South Florida. Now is a great time to get a steal on a property and rent or resell on terms.
For that reason, it’s a good idea to locate LANDLORDS for your wholesale flips. You should be looking in your property appraisor’s website to see who owns multiple properties, pull eviction filings, go to Landlord and Real Estate club meetings…you will have plenty of buyers.
Where in South Florida are you located?
You can still buy and flip as well, it’s just a matter of buying at a steeper discount that what you intend to sell for. For example if all homes are selling at about 90% of retail and you buy at 70% then you still have a 20% spread to play with for a flip.
The nicest part about real estate wholesaling is that you only buy the homes that you already have sold. It’s hard to argue with that.
For the next year or two, it is a buy and hold market. Investors are buying REO’s and renting them out. Banks can not process foreclosures fast enough.
Rehabs (flips) are still happening in some areas, but you can’t go by the past comps to calculate ARV’s, since we are on a downward slide. Many investors are waiting for the $.30 cents on the dollar market, before jumping in with held funds, to buy at auctions.
If you are bird dogging, I would be re-evaluate all my investors requirements.
Do you guys still think that it not really a good time to get in REI as a wholesaler?
Wholesaling is still alive and kicking it just takes more creativity. You need buyers gone are the days of making 50k wholesaling on 1 deal. Be creative and don’t take failure or not closing anything personal.
I’m a wholesaler. I’ve had other investors ask me if I had deals that were owner financing. So I’m going to start putting deals under contract that are owner financed with the intention of assigning them.
I’ve never thought of that strategy; seems like a good idea. Also seems as if a deal wouldn’t quite need 30% equity in it in order to get sold quickly…since the owner financing is so attractive. Thanks for opening my eyes to this.
BTW Alex: Go Steelers! Even though we lost today.
All: Many of the properties that I’m looking to put under contract owner financing are free and clear, and abandoned. So I’m going to give the owners a chance to make some income off of their property. Also, some investors will get a chance to fix it up with a lower amount in investment. Finally, I’ll get a chance to earn some $ via an assignment fee!
As a landlord and investor, this market is good and bad.
The good, there are tons of cheap and good properties out there for sale. And where I’m at, the rents have not gone down at all.
The bad, the credit situation makes financing a lot more difficult to buy these homes. And also to flip, although selling with owner financing is a good way to flip and make some extra dough with the interest.
Most of the sellers that contact me are upside down. If I can’t find enough equity in a house for wholesaling to a rehabber investor, I will “wholetail” the deal to an end buyer looking for a discounted cash deal. I recently read an article from someone that mentioned wholetailing. The rehabbers by me want deals at 50 cents or less on the dollar which of course means I have to offer less to potential sellers. It’s not happening in my backyard. I’m now talking to people hundreds of miles away that have lots of equity. As long as they have digital photos of their homes and a way for a buyer to see the house, I’ll do deals anywhere.