Hey Guys,
Im definitely a newbie at this and I want to get started in wholesaling. I made a website, posted ads on different sites with “We buy homes CASH” “Sell your home Today for CASH” ads, I have a few investors on an email list already that are looking for properties to buy and they say they can close pretty quick, BUT I don’t have any leads on properties yet, so I was hoping to get some insight from the pros on what my next step should be? I dont know anything about the contracts or how to assign them either. Any help would be GREATLY appreciated!
Thanks,
Mike
Hi,
Welcome to REI Club!
To sucessfully find inventory to sell you will need to utilize multiple facets of investing! First thing to increase your odds resolve to sell to both investors and owner occupied buyers, as you don’t care who purchases your properties or whether an owner occupied buyer gets a great deal as long as you get paid.
A lot of wholesalers forget to include marketing to owner occupied buyers and severly limit thier chances of success!
Look for properties through REO’s, through Foreclosures, through Auctions, through Listings, through Distressed Sellers and through Out Of State Owners of Second Homes and Out of State Investors, Inheritance or Bankruptcies may yield a home here or there!
Generally speaking you will want to set up a normal contract with a normal closing period (45 to 60 days) now buying from a fellow investor may demand a quicker closing! I generally look for properties to meet the demands of my buyers, as it is much easier to buy what someone wants rather than look for a buyer for something without a ready buyer. (There is a reason the MLS system shows average days on market and when multiple agents can’t find a quick buyer, you can’t either!
Make sure your contract has a loan contingency and a home inspection contingency (This may not be possible through a fellow investor as other investors may want to turn thier property with no contingencies) as this is your period to assign or sell to your end buyer, generally speaking when I find a property my buyer wants I can do all the paper work and remove contingencies in 15 or 20 days. (45 to 60 day closing)
If your assigning your contract rule of thumb is keep your assignment fee to less than 6%, although an investor may pay more in a good cash deal, and if you intend to make more than 6 or 7% then a double closing is in order using transactional funding. (Mostly applicable to owner occupied buyers, but may also apply to an investor deal where financing is involved)
I always want to deal with pre-approved buyers and if a potential buyer is not qualified and pre-approved for a mortgage I put them together with my teams mortgage broker to get an approval!
Good luck,
GR
Ok thank you for that, that was a lot of great info! My next question is, if I find an REO will they accept an assignment? I know I talked to a realtor before and she said you cant assign contracts in certain cases, so I guess my question is if, I don’t have any funds or credit how can I make an offer on a foreclosure or REO? And when you find a property thats distressed or find the owners info on a vacant house, what kind of questions should you ask them or what do you say wen you call them? Any standard information you NEED to know about the house before you try to make an appointment to see it? Sorry for all the questions, I just have nooo experience and im kind of young so when I start off I want people to take me serious and not just see me as a young “uneducated” person trying to be an investor “wanna be”. Thanks again for all the insight and help! I appreciate it greatly!!! 
Hi,
A foreclosure property (Short Sale) will have to close to you by transactional funding provided there is no written condition prohibiting you from selling for 30 to 90 days. In an REO you can contract for it and assign the contract. Just make sure if your using an agent the state contract does not have a clause prohibiting assignments, or prohibiting them without seller agreement!
Hi, my name is Gold River, I am a real estate investor and I saw your ad, returning your call, or was referred to you! Please tell me about your home, beds / baths, square footage, ammenities, living room, dining room, family room, HVAC, patios, pool, spa, sauna, # car garage, lot size, on city services, septic field, last remodeled or had major repairs, when was roof last done, how old is the HVAC system, etc, etc, etc.
GR
As Gold River stated, what you’re missing is marketing, along with the knowledge required to do something with the deal when you get it.
Posting a few ads online won’t get you many leads. Although most people begin their real estate searches online (whether buying or selling) the fact remains sellers aren’t conditioned to search for BUYERS they are conditioned to search for REALTORS. So if you’re interested in online lead generation you’d be well served to learn about SEO, PPC, and organic traffic generation (videos, blogs, articles, etc).
I’m not a huge fan of online marketing for sellers. I prefer direct mail (especially “yellow letters”) and bandit signs. Nothing beats yellow letters…NOTHING. If money to buy lists is an issue you can send them to FSBOs or expired listings…any Realtor can get you expired listings in 5 minutes.
As far as knowing how to do the assignments, etc check out www.flip2freedom.com a guy named Sean Terry has an OUTSTANDING free wholesaling podcast series going. Start from the 1st podcast and work your way from there.
Good luck!
Have you tried using bandit signs or running newspaper ads? You may also want to do pay per click on google for you website to get more traffic to it.