I have been rehabbing and flipping houses on and off since around 2003, now I’m back in it full time and I have people coming to me here and there pushing different properties they say I could make decent money on, in fact I just had a guy twisting my ear about a couple of houses earlier tonight. I’m also a RE broker as well, although I mainly just list and sell my own projects.
My advice to you first off would be to always remember that you are selling yourself just as much or maybe more than you are selling any particular property or deal. Whenever someone comes to me touting a property, consciously or unconsciously I immediately size the person up before I ever start to even think about the property. This is because if its someone that I know knows what they are talking about and is an honest person, I’m far more likely to want to even hear the rest of whatever they’re selling. You would be trying to sell not just properties but really projects to primarily someone like me who wants to make a profit, so if I know that you are someone I can trust the information from, I’m far more likely to listen. Another thing is do I think this person knows what they are talking about? If you’re coming to someone about a project, I would think that you are giving them a package of info, how much they can buy it for, what work it needs and how much that will cost and finally, what can they really sell it for?
That’s one issue I have with the guru’s and whoever else tries to sell wholesaling as a great way for someone with little or no RE investing experience to get started. If you give me a figure for what the rehab should cost, how do I know that you know what rehabs really end up costing? I’m finally getting pretty good at estimating basic rehabs, I’m still getting there on my higher-end projects, just because they’re usually much more complex. Yet, this only comes after more than a few years of doing rehabs and learning the hard way. Of course, before I’d even think about writing any offer, I’d want to go through myself and total up my own estimate, but I want to get reliable figures from the person touting the project. Finally, as far as the final sale price goes, I want to know I can trust that number as well. Now, because I’m a realtor, I have access to the mls and can run comp sales on any property and get a pretty solid idea of what it should go for when done. Now, other than having mls access or if somehow the person knows the immediate area very well and knows exactly what things sell for, I would wonder how someone would be able to give me a projected sale price.
On other blogs and forums I have read that usually the people in the wholesaling business that really can make a living doing it are the ones that build up a network of trusted clients they can sell the deals to. One last thing too, I have always wondered and have seen where other RE investors also wonder the whole legality in many states of wholesaling or bird dogging or whatever it is, because in many cases, you are getting paid to sell someone else’s real estate, which usually requires a license to do. Maybe there’s a loophole that I’m missing, but that makes me think someone that wants to get into that end of the business ought to also get themselves licensed as an agent or a broker. Usually if you are in a metro area, you can find a realty firm like I did where they’re happy to take on part-time agents, I just pay a small fee each month for my mls access, office upkeep, etc and when I sell something, I get a great commission split, so it works for me.