Okay, you’ve decided you’re ready to seriously look into wholesale properties to start or build your investment portfolio. Good for you! So… now what? Today we’ll briefly cover how to work with a real estate wholesaler.
Find the Right Wholesaler
You know not all real estate agents are created equal. The same goes for real estate wholesalers. So, how do you find a good one? Investors usually find their contacts one of three ways:
Join Facebook Groups for Real Estate Investors (REIs). Once in the group, post a comment that you’re looking for a wholesaler with leads in certain areas.
Hit up Google. Start with a search for something like “We buy houses in Chicago.” The top 15 or so hits will be the bigger organizations. It’s expensive to run Google ads so you can assume these companies have had a good bit of success.
Go to Real Estate Investor Meetup Events. This can be a great way to meet other investors and hear their stories. Take their advice and ask for pointers. Most will happily share insights with new investors. Learn from their mistakes so you don’t have to make them, too.
Do Your Research
You have a bunch of leads to potential wholesalers. Whittle them down to your top 20-30 names to interview. Questions to ask include:
- How long have you been in business?
- What are your biggest challenges?
- Do you contract directly with sellers?
- Will you cover closing and inspection costs?
- Do you conduct title searches to uncover issues (i.e., back taxes or additional mortgages)?
You plan to trust this person with an important part of your investment portfolio. Make sure you take the time to know them before doing business with them. Likewise, when you reach out, be clear on your level of seriousness. Are you ready to roll or do you need to think things over more?
Gain Good Buyer Street Cred
Once you find a good wholesaler, how do you prove to them that you are in fact a good egg?
To gain the good buyer street cred, Rule #1: make sure you properly represent yourself.
If you’re new to investing in real estate or wholesaling, say so!
No one will shame you for inexperience. A good real estate wholesaler will walk you through the entire process so you understand it and feel comfortable. Wholesalers can usually tell within the first few minutes anyway, so your transparency will gain you credibility with them.
If you need to secure loans to fund your sale, say so!
A wholesaler will want proof of funds before even seriously talking to you. If you don’t have cash on hand for the sale, have a preapproval letter from your lender. But also understand that changes what properties they’ll show you because you can’t close a deal within a week. And they know they’ll have to do an inspection. Save everyone the hassle if you just don’t have the cash.
Before going to look at a property, review the property info!
A good wholesaler will provide a thorough description of the property and tons of photos. Make sure you understand exactly what you’d get into with a potential rental. Find out how much renovating a property will require before renting it out . If you can’t handle a total gut renovation, don’t waste everyone’s time with the walk through.
Be Cool with the Wholesaler’s Compensation
Real estate wholesalers will make a decent commission off the sale. Just deal with that amount. They found you a house you’d never find on your own. They did the marketing, the lead chasing, and probably paid all your closing costs. Whatever they cleared, they deserved it. So don’t whine about their fees, just say thank you.
How the closing of a wholesale investment property goes affects both you and the wholesaler, not to mention the seller. If you cause problems, don’t think for a second a wholesaler won’t share their experience with other wholesalers. Likewise, ensuring a smooth process for you and the seller increases their reputation, too. If you had a great experience, do them a solid and tell others.
Have questions about the process or want advice on what you should do to prepare for discussions with wholesalers? Reach out! We know what wholesalers need most from buyers and how to have the best experience.
As a property management company in Chicago, we at GC Realty & Development, LLC, are investors ourselves. Each employee of GCR&D are Chicago property managers and landlords themselves, and understand how to manage properties from the owner’s perspective. Get in touch with one of our experts to answer any questions and maximize your rental property profits.
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