How to Find Wholesale Deals for Investors & Get Paid
We live in challenging economic times, which means that some homeowners are in financial distress and want to find a way to sell their homes without going bankrupt. In such an environment, how can a real estate investor hope to serve anyone and make a profit? Believe it or not, it can still be done. A property wholesaler is someone who contracts the right to buy a house from a distressed homeowner at an agreed upon price, and then tries to find someone who is interested in buying at a higher value. That possible buyer is someone who sees the market potential in the house and may have great ideas about fixing it up and putting it back on the market at a greater price than he is paying the wholesaler, or maybe they just want to live in it themselves. You will want to learn how to find wholesale deals today after reading this page.
What Are Wholesale Properties?
Wholesale properties are, in general, neglected homes normaly owned by distressed or absent homeowners. Often, they may be sitting there, vacant. The owners may have vacated the home because repairs were needed that they could not afford, because of the death of a spouse, because of crime or similar activity in the area, or because of financial circumstances like back taxes or the foreclosure crisis. Often, however, the bones of these homes are still in good condition, and they may even be located in neighborhoods that are making a comeback due to new local businesses opening, better local employment conditions, or a reduction in crime. We’ve probably all driven by such homes and thought, “What a shame! That is such a pretty old house. Someone ought to be living there!” Getting good deals from a wholesaler, is different than buying a property from a real estate agent. You get the property, as-is, and there’s often no inspection period, so you must find out what repairs the property will need yourself to get it to market value. It’s also different if you are trying to get a loan to buy the property, because there’s no appraisal, and traditional lenders may be more reluctant to loan you the money. Therefore, the usual source of finance for a wholesale property is from a hard money lender where rates of interest are much higher than conventional lenders.
Where to Find Properties From Wholesalers
Potential wholesale properties are literally anywhere and everywhere. Often, sellers may have a property that is in good condition and requires few repairs but want to sell because the kids have grown and left home, and they want to downsize, or they may need to move quickly due to ill health. Alternatively, some of these homes may be carrying the threat of foreclosure or because of a divorce the seller may be eager to sell the property along with a lot of bad memories. There are many reasons why people want to sell their homes quickly, without fuss and the expense of a traditional real estate agent. Wholesalers make it their business to connect with such sellers and if you want a to find a great deal its worth connecting with a wholesale or several of them that are plugged into the market. One good way to meet wholesalers who are selling properties is to go to real estate meetings. These meetings usually meet once a month or so where you can meet these wholesalers, give them your name, and information on what you’d like to buy and get on their email distribution list. It also pays to go online and search for wholesalers, who have often set up their own websites. Look for marketing from wholesalers, too, they often put up bandit signs or may have ads on Facebook.
Considerations in Buying Wholesale Properties
A wholesaler who contracts for the right to buy a house is never the owner of that house’s title. The wholesaler has simply bought a contract that says he has the right to buy the house and then sell it to another buyer, and this should be in writing in that contract. They might have even been someone who used our site to learn how to find wholesale deals themselves! There must also be a closing date in the contract, which specifies how much time the wholesaler has to close the contract on the property. This is usually in the form of an inspection period which can be 30 to 60 days or even more, to make sure that the wholesaler has time to find the best possible deal. As in a regular home sales contract, a wholesale property contract should include all the relevant details about the house, like a complete description of the property for sale as well as the agreed upon purchase price. It is important for you as the buyer to make sure that the wholesaler has a contract to sell you the house, be sure to read the contract yourself. Also, inspect the property yourself by actually walking through it so that you can get an idea of what repairs will be needed to make it marketable. Use your own appraisers and do not rely only upon what the wholesaler tells you. Make certain that you get all the information from the wholesaler about any liens that may be on the property. It’s also fine to negotiate if you think the property may be worth less than what is being asked.
Prospecting wholesale properties can be an endeavor that is both financially and emotionally rewarding. Networking is key to successful prospecting for wholesale properties. But, be careful, because not all wholesalers who have property for sale are the most ethical of individuals. Always know the laws in your state that govern the purchase of property from a wholesaler and stay within the limits of those laws. Keep the names of honest wholesalers who are principals and who have valid contracts, because you’ll want to buy from them again. And now that you know how to find wholesale deals you are set!