I am new to investing, I have went out the meet owner of property who were selling and who were not interested in putting their property under contract. Do you find this hard to do? Is there some type of formula to this?
Well, that’s weird…do they just want you to show up with a breifcase full of money? A contract is the way it starts. You can make an offer in writing or verbally, but it always gets put down on paper and the attorney review period begins. They may just be afraid of getting stuck into something, but they just need to consult with an attorney to feel better and understand the process. You should also do this as soon as you can.
Thank you. I just started wholesaling and I have come across homes (FSBO) and I have noticed owner are asking full price for their homes. I have come across these homes in the paper and also drove through neighborhoods. Most of the owners are ready to quickly get the property off of there hands. Most do not want to sign a contract where it gives me 120 days to sell their property. Anymore suggestions would be appreciated.
Well, that explains some things. That’s a different kind of contract. I thought you wanted go under contract to buy the property. Sellers would be hesitant to tie up their property with a middleman, and their attorney would probably advise against it. If that’s what you want to do, you’re better off finding a seller that’s in distress that you can help them with in lieu of having the opportunity to sell their property for more than what they would accept. For example, you could catch up their payments with a contract that states that you will make the difference between their liens and the contract of sale that you put in place. You save their credit, help avoid forclosure and buy them some time. Good luck! Sandra
If they wanted someone who could sell their house for them, they would have gone to a Realtor.
Also, 120 days is a lot. Don’t ask for more than 60.
If you ask for 4 months time to buy their house, they are thinking:
- “What could take so long?”
- “Can she not qualify?”
And most importantly:
- “Why should I eat 4 months of mortgage payments, waiting?”
If a property is a good wholesale candidate, you should be able to sell it within 30 days. FSBOs are usually not good candidates for tying it up and assigning your contract, they are usually not motivated enough.
(keep in mind “wholesale” is 70% of market or less-repairs-minus your fee)
Hope this helps
If FSBOs are not the way we should go, where would we find the truly motivated sellers?
Sorry, I guess I should clarify…Searching out FSBOs in the papers is usually not the way to go. Some great ways (there are too many too list, I advise checking the marketing section) to find motivated sellers, are your own newspaper ads, direct mail to distressed properties (i.e. foreclosure, divorce, out of state, etc…), bandit signs, and a million other ways.
You can also “drive for dollars”. Essentially you drive around your farm market looking for distressed properties that you think someone might want to sell. A lot of people say it is a waste of time and it is “jumping over dollars to reach the dimes” but I know a guy who does this in Florida, and just put together two deals in less than a month that netted him $200k! Not too bad for driving around.
The fact is, most FSBOs in the paper are simply not motivated enough to sell for a discount or on terms. Now, I DO say most, as there ARE some deals in there, so it doesn’t hurt to scrounge around.
Also, one thing that I do, is write down the name and number of the seller, and even if I don’t call them when I see the ad, I file their number and give them a call back in a month or so, and see if they still have their house up for sale. They are usually a little more motivated as time wears on.
Thanks for the reply Ryan! I will definitely check out the Marketing section…(and this answer may be in there!) but, i just wanted to get back to you b/c i am really excited to hear there are lots of other ways (besides the newspaper).
So, where would i get a list of distressed properties/sellers? What is your best way to find them?
I market to preforeclosures mostly, and I find my list of them from the Recorder’s office website. Then I find their address from the tax assessment dept.'s website.
You could also search the courthouse for NODs (or lis pendens depending on your state), divorces, evictions, etc…Make sure to be empathetic to the situation though, you don’t want to run them off.