Wholesaling in Los angeles California


This is a great forum with a lot of good info.

I’m in Los angeles ca and i am currently calling fsbo’s in my area hoping to find a really motivated seller so that i can find a property to put under contract and sell to an investor.

My question is…I know that 35-45 percent is the average discount investors are looking for. But i want to know if this is still correct in my market?Los angeles ca?

Also, when i do put a property under contract, do i advertise it with my fee included in the percentage, then let the investor know later that my fee wasn’t included?Or do i take out my fee out of the equation from the get go and then advertise the property?


The City of Angeles! 

I like FSBO’s and believe highly in cultivating properties from any source, with that said LA is one California area with high foreclosure rates and many bank owned REO’s, in fact REO properties in Los Angeles make up more than 6 of 10 properties!

So how come your not cultivating bank owned properties which have been on the market more than 45 to 60 days with no offers? Just like Arizona, Nevada and Florida lenders in California and area’s like Los Angeles need to get properties not selling retail off there books quickly to free up valuable cash set in reserve by Federal Lending Regulations.

Those of you who do not know or understand this all lenders must keep in reserve 4 times the face amount of a non performing mortgage in default, a original $100k loan requires $400k kept in cash reserve by the lender and the foreclosure property! This is a huge amount of cash there holding without income every day, week or month they own the property!

These lenders can not loan this cash out to make returns on it when it has to be kept as a reserve against non performing properties, these banks and lenders have to move these properties off there books and after a property has sat on the market more than 45 or 60 days without offers, there happy to move that property to an investor at 65 cents on the dollar!!!

Build your buyers list first, unless you like doing things the hard way and enjoy the idea of failure you need to work the marketing and advertising side first and look to purchase what your buyers are looking for, then either assign the contract or use transactional funding to purchase and re-sell over to your end buyer!

If you can get a pristine property in move in ready updated condition for 65 cents on the dollar, selling it over to a buyer for 70 cents on the dollar will be easy, especially if you expand your marketing to include owner occupied buyers and only buy what your buyers are looking for!

I hope this helps you open your eyes and that you open your market and stop limiting yourself!

Good luck,


Hi Gold River,

Thank’s a million for the great info. You’ve definitely opened my eyes. I read an article about REO’s not too long ago, i’m a little apprehensive for two reasons.

1). How would i find and appraoch the banks or lenders thats holding these reo’s?

2). Will i be able to do an assignment deal with reo’s?Do lenders even sign assignment papers?

I was recently working on a property in venice beach. Its a two bedroom that was 5 months ($15,000) behind on payments. The saler was a realtor and she was very motivated. She was originally asking for $479,000, but i negotiated the price down to $430,000, i know i could have gone way lower beacause the negotiation was all on the phone at this point. I dropped the deal after i sent the assignment papers to her because the stress in her life was probably overwhelming her. She was very intoxicated the few times i spoke to her and her terms where very unreasonable.

I share this story because i know this is all very possible and i will like to know in a deal like this, how would you have passed the saving’s onto an investor and still make profit?

In your experience how much behind does the saler have to be for a deal to still be considered profitable?

Thank you.


A property that is more than 3 months behind is a NOD (Notice of Default) property and is basically in foreclosure!

There are two ways to handle this type of property one being catch up the existing mortgages and bring it current or buy as a short sale, this is not an REO property!

An REO (Real Estate Owned) property is owned by a bank or lending institution!

$167,650 - 35% investor discount for purchase of pristine property over $250k in value!
$311,350 - Absolute highest price you should pay for a $479k property!

To do an assignment you write a purchase contract and assign that purchase contract!

Just because the seller is asking $479k does not make the property worth $479k - Check the Comps!!!

The only reason I might agree to pay more than 65 cents on the dollar is I have a buyer looking for this exact property in this exact area with the right floor plan, square footage, beds / baths, amenities, lot size, garage size, etc!

I never ever buy a property without a buyer lined up unless it’s a smoking deal (Pristine updated condition below 50%) and I can actually close to me and afford to hold it until I find a buyer! If a band of hundreds or thousands of real estate agents and brokers can not sell something in two weeks, what makes you think you can???

REO’s are listed properties on the MLS, if there are no offers in 6 or 8 weeks most lenders will look at excepting investor offers just to get the property off there books, $100k property for $70k in move in ready pristine condition! Anything over $250k a 35% discount from move in ready pristine condition as these properties of higher value are more risk!