Wholesalers Can Save You A Lot Of Time!
August 17th, 2010 categories: Buyers, EnergyWise Education, Investors, Real Estate, Real Estate Tips, Realitors, RENOVATORS
Our next project. See that palm tree and fireplace? They both have to go. They are messing up my Solar Exposure!
We are in escrow to purchase our first property from a “Wholesaler.” I didn’t see it coming, but I’m glad I got a call a couple of weeks ago from Sam Okenyi & his partner, Chris Williams. They were familiar with our Green Renovation and Classy Remodeling work from our job sign and our CraigsList ads and knew that we would be the most likely buyer on their list if they could just get us to take a look at it. (See video of my interview with Sam and Chris) They had found a real mess of a house, un-permitted additions, everything worn out, and a previous attempt at a duplex conversion and had it under contract with a few days left to find the buyer.
Fortunately I had just jumped back into the market after taking a break to evaluate my first 10 transactions and make any adjustments to the mission that might be needed. Here’s what I had found:
1. All 10 jobs were complete and sold or in lease or lease option status.
2. We made money on all of them, from $2,000 to $28,000 each.
3. We always sold for about $20K over the rest of the neighborhood because of the value of our renovations
4. Appraisals came in OK except for the last one, which we are providing details the appraiser missed.
5. 2008 – 2009 was a lot different than the beginning of 2010. A contributor to this was the $8K tax credit which stimulated all the players and made good deals harder to find. The “Crazy Time” provided a good opportunity for me to slow down and finish up all projects and evaluate.
6. Time to get back in the market. I made 5 offers in August, one still has life in it. The “retail” market has returned to acceptable levels where some good deals, (not killer deals) are available. In the interim, I had investigated the courthouse steps, (too much work for my taste), direct mail, (lots of sellers wanting to sell, but once again, not my style) So I was ripe for a wholesale offer.
The great thing about buying from a wholesaler if they have secured a really good deal and provided me with a good clear package is the amount of time it saves me. Sam had emailed me a clear package with his analysis and the comps. So when I met him on the job, I was already educated enough on the area to say, “Let’s do it!”
I made it clear to Sam and Chris what we are looking for, Real Ugly Houses. Guess what? Now that they know that, and know that we are real buyers, they will pull out all stops and really start combing the neighborhoods for us. It’s a Win – Win. I’ve added a marketing department to my team. And I dont have to pay them unless they produce. What a country!
Wholesalers are probably like Teachers (I used to be one) The good ones are way under paid and the bad ones are over paid. What makes a good wholesaler that is worth the spread that they earn, between what they secure the property for, and what they sell it to me for? These 3 things are important
1. They aren’t trying to get rich on one job. (They know the buyer has to make a profit, or they wont come back for seconds)
2. They communicate clearly. They know what I want and make a clear presentation
3. They know how to do same day closings and work with an experienced escrow person.
If all that’s in place, a good wholesaler can save you a lot of time. If you’re interested, you can call Sam at 559 394 9505 or Chris at 559 593 2987. Or check out the 3 part Video Interview of me interviewing them
We talked about Wholesaling in General and how wholesalers and investors can work together as a team.
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