Author Topic: What % of Your Deals Were Wholesale vs. Retail?  (Read 4884 times)

Thedudeabides

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What % of Your Deals Were Wholesale vs. Retail?
« on: April 26, 2015, 03:16:52 PM »
I'm a newbie and I'm trying to learn as much as I can about real estate investing.

I'm reading "Building Wealth One House at a Time".

A lot of the discussion the book is related to putting together wholesale deals.

Question for experienced investors:

What percentage of your deals are wholesale vs. retail?

waltworks

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #1 on: April 27, 2015, 08:05:58 AM »
By "wholesale" do you mean purchasing from a bank or wholesaler? I think maybe what you meant was how many were open market/MLS vs pavement-pounding non-market deals?

-W

Thedudeabides

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #2 on: April 27, 2015, 08:15:14 AM »
@waltworks, yes. How many were market/MLS vs pavement-pounding? The book I'm reading talks a lot about talking directly to the owner. I'm interested in learning whether or not this has been commo practice for other real estate investors or if it's more typical to work with an intermediary of some sort (realtor, etc.)

waltworks

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #3 on: April 27, 2015, 09:51:14 AM »
All of mine (only 4 properties) were MLS/on market. But they were during a time period (2009-2012) when you could have purchased houses completely at random in the US and done great, and in many cases banks/owners were desperate to sell. Deals were so good it didn't matter if you paid a RE agent, nobody else wanted the place, you could try a lowball offer on a dozen properties and get several to accept, etc.

I think if you wanted a deal basically anywhere now you would need to find it yourself to save the commissions/fees/etc. Maybe there's still a few markets where you can buy at retail and do ok, but I don't know of any personally. I am down to one rental and it'll be gone in another month or so here - prices have gone crazy.

-W

Thedudeabides

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #4 on: April 27, 2015, 10:13:12 AM »
Thanks for your feedback waltworks. Much appreciated.

zephyr911

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #5 on: April 27, 2015, 10:26:42 AM »
I'm a newbie and I'm trying to learn as much as I can about real estate investing.

I'm reading "Building Wealth One House at a Time".

A lot of the discussion the book is related to putting together wholesale deals.

Question for experienced investors:

What percentage of your deals are wholesale vs. retail?
When I got serious about real estate investing, I got my real estate license at the same time. I do all my research on the local MLS, and have never seen fit to cast the net wider. *side bonus: earn commission on my own buys xD*
I think of the MLS as the default target area. Most properties for sale are there, and it's much less labor-intensive to shop on it than off. Unless and until there's a shortage of good investment opportunities right there, why bother... and where I live and invest, good deals abound.

sammybiker

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #6 on: April 27, 2015, 02:36:47 PM »
50% MLS, 50% direct from seller or using a wholesaler.

The 50% from the MLS were purchased at least 25% below market (targeting sellers with high DOM properties and using all cash, low contingency offers).

Thedudeabides

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #7 on: April 27, 2015, 02:41:56 PM »
This is really great feedback. Thanks @zephyr911. It sounds like getting a real estate license could be a good way to get discounts.

@sammybiker: good suggestion on using high DOM and going in with all cash. How do you source your direct from seller deals? I think I recall you saying that you were getting leads through a mortgage broker which seems like a great source.

Thanks again all. I really appreciate you all taking time to answer newb questions.

sammybiker

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #8 on: April 27, 2015, 04:54:29 PM »
No mortgage broker leads, just one wholesaler (a good one - but be careful, there are tons of shitty ones!) and just contractor connections, telling people that I'm a cash buyer and look for X homes in X area...people, in the right markets, will accept a discounted sale price for quick and painless closings, not dealing with financing, agents and all the bullshit involved with a traditional sale.

I should note that my market is not a super hot one, although things are picking-up.  People probably care less about cash buyers in SoCal vs Northern Ohio, where I buy.

Fishingmn

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #9 on: April 28, 2015, 06:21:44 AM »
All 11 off of MLS but like Walt I bought most in the 2010-12 period when it was easy to find deals. Plus I'm a realtor so I got the commission on the deals to make it more worthwhile.

I've only bought 2 of them in the last 24 months - both were older condo's where the numbers worked but I can't find anything I like right now. Prices are just too high in my market.

Thedudeabides

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #10 on: April 28, 2015, 09:47:18 AM »
@sammybiker thanks! Yes, seems like there is the potential for a lot of bad wholesalers out there. If you don't mind me asking, what would you say is the typical range for cash discounts in your market?

@fishingmn thanks!

SUP

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #11 on: April 30, 2015, 04:32:21 AM »
40% MLS, but I got the word out I was buying and got a few pre listing. Agents call this a pocket listing sometimes. The others: One a builder had in his rental portfolio and needed to move for interest/cash issue. Another was from a guy in my real estate class that bought his 4-plex and his wife hated living in it and he wanted out. One from a flipper that was in over his head. One was the owner next door to one I bought who figured if I bought the house next door I might want his. On and on with different. Nothing magical or systematic about it.

So basically everywhere. But the key is to develop your own criteria. Then you can make decisions faster. See the back of Millionaire Real Estate Investor by Keller for some great examples of criteria. I was surprised how conservative some were. Hitting a few doubles and singles in a year is better than spending 3 years looking for the home run.

Thedudeabides

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #12 on: April 30, 2015, 01:49:29 PM »
@SUP thank you so much for the detailed response.

That makes a lot of sense. Decide on the purchase criteria and then evaluate each deal against the criteria. Once a deal arrives, then it will be easy to make the decision.

It sounds like networking could be very helpful.

NoNonsenseLandlord

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #13 on: May 01, 2015, 08:02:04 PM »
Mine were mostly wholesale. 
My first 4-plex was a MLS deal, REO. 
Second 4-plex was a short sale, non-MLS. 
Third was a short sale, non-MLS.
Fourth was a REO, non-MLS. 
Fifth was deal where I bought the mortgage from the bank and continued the foreclosure.

Thedudeabides

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #14 on: May 02, 2015, 02:42:12 AM »
@nononsenselandlord how did you come across your non-MLS deals?

theoverlook

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #15 on: May 04, 2015, 09:16:22 AM »
Fifth was deal where I bought the mortgage from the bank and continued the foreclosure.

Now that requires some confidence!  I'd love to hear a summary of how that one went.  What bank was the mortgage with?

NoNonsenseLandlord

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #16 on: May 05, 2015, 06:22:49 AM »
@nononsenselandlord how did you come across your non-MLS deals?

Some I contacted the owner.  Or the bank.  Or the realtor that was managing the property during the foreclosure.  Most of my stories are outlined in detail on my blog.

Join a RE investment club.  Contact a Home Vestor franchise and ask about properties to buy.  Do not jump on every deal you see,  Patience is the key, and being able to pounce when a deal is there is another.

Thedudeabides

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Re: What % of Your Deals Were Wholesale vs. Retail?
« Reply #17 on: May 05, 2015, 08:44:18 AM »

@nononsenselandlord how did you come across your non-MLS deals?

Some I contacted the owner.  Or the bank.  Or the realtor that was managing the property during the foreclosure.  Most of my stories are outlined in detail on my blog.

Join a RE investment club.  Contact a Home Vestor franchise and ask about properties to buy.  Do not jump on every deal you see,  Patience is the key, and being able to pounce when a deal is there is another.

Excellent thanks! I'm checking out your blog now.