What’s my first step?
How do I find the houses that would make good flips? Do I just go to a realtor like I have done before?
Is it true that I can get into this with $0 because it’s about how I word the contract?
Is there a sample contract somewhere that says I don’t have to purchase the home unless someone buys it from me shortly thereafter?
Hi,
Wholesaling really is fairly straight forward and can be done with diligence and perseverance.
The rule of thumb is a wholesale property should be bought for 70% of FMV minus repair / rehab / fix & flip costs. I typically will do assignments for most properties I wholesale to investors and use transactional funding for properties I sell to end users (Owner Occupied Buyers).
The maximum percentage of spread on an assignment is 7% before most buyers will walk away as the cash paid for the assignment can not be financed and can not be included on the HUD 1. If a property sale has a spread of more than 7% I will use transactional funding but I find it much easier to assign the existing contract for most investor transactions.
You need to advertise, send yellow letter’s or post cards, follow up on bankruptcies, death notices and divorce actions to buy homes wholesale.
Provided you leave a good contingency and allow enough contract time to assign, due diligence and funding / closing you are all right and can wholesale a property for a few bucks, you still have to place earnest money deposit with a contract and open escrow.
In most cases you do not want to tell the seller your going to re-sell his property for a higher amount and make a profit. Your out is the contingencies and how they are written in the contract with the time line.
You also need to start building a list of local investors to have to sell your properties to as without buyers having a contract is senseless.
I typically have bought what my clients are looking for and have built a questionnaire so I know exactly what they want to buy!
GR
Hey Redstar. welcome to the jungle. I’ve been wholesaling Real estate for over 3 years now and I’ve found the deals can come from multiple directions. I recruit bird dogs and pay them a flat fee of $2,000 I use bandit signs, I send out thousands of letters and post cards to absentee and high equity owners, I even have girls pass out my door knob hangers, I’ve got a few deals from advertising on Craig’s List that I buy houses and I’ve done deals with other wholesalers when they couldn’t sell what they found.
I need to find someone to search tax lien records, probates, divorces, evictions and code violations.
One of my favorite things is when another Investor calls and asks if I can do anything with a deal they came across. Like it just falls in my lap. I get it sold and we split a healthy chunk of change.
But, get ready for the deals that fall thru at the last minute, sellers wanting twice what their junk house is worth, the frustration with dealing with dishonest people and an emotional roller coaster ride from hell. And the completed deals that puts the Cha Ching in your wallet.
And that’s why I love it.
Rando
If Gold River endorses wholesaling, then I will keep it in mind as a viable option.
It just seems like too much work for the time being.
So I’m supposed to just drive through the ghetto and knock on people’s doors?
Now THAT’S CRAZY!!!
Thanks.
And thanks for all the good advice a few weeks back.
I just have to think about things for a little while so they make sense.
Time to start building my buyers list.
I clicked on that you tube link not knowing what to expect and up came the Guns and Roses video Welcome to the Jungle.
Luv that song, came out almost 30 years ago.
So Redstar, I wish I cud help you, but it looks like your going to over think, over analyze everything and never get started.
What a shame, you have the potential but not the drive and motivation and desperation needed.
Rando
Rando is right. You can make money buying/selling real estate and you can also make money selling widgets and paper clips - the reason a lot of people turn to real estate over widgets is that it’s sexier. It’s the same amount of work involved.
If Tommy Vu hawked wooden furniture there’d be ten million people trying to start their own wood shop.
Another classic youtube video: https://youtu.be/iQNdi-fRExc
In getting started, just not with wholesaling.
I’m getting into apartment complex investing.
Thank you so much for this excellent advice.
In my opinion, the reason people get into real estate is because you can take out 30 year loans to do it.
This is not true of anything else.
It can be fairly easy to get started. The first thing you should do is search in Craigslist under Real Estate Services for investors looking for people to join their team. This is a great way to find a mentor. That’s what I did and I got to learn under one of the biggest wholesalers in Orlando, FL
According to the contract from the book “Real Estate on Steroids,” what it says is that I can back out pending inspection…
However, in wholesaling, the idea is that you back out if you don’t find a buyer for your property.
I don’t mean to PROCRASTINATE, but we’re talking “spending” tens of thousands of dollars that I don’t even have… so it would make sense to get this ironed out correctly…
Is the idea to LIE to them if I don’t find a buyer and tell them that there were too many issues upon inspection?
Am I actually paying to get these houses inspected? Where is this money coming from?