Probably the one question I get asked the most on wholesaling is, “can that work in my area?”. Let me try to hold my emotions here and to sum this up in one word “yes”!!!! Wholesaling great deals knows no city, county or state boundaries and deals are where you find them.
More specifically of what I want to emphasize is that wholesale deals are relative and unique to your area. What I mean about that is that I am simply not going to give some blanket crazy statement like, “you can only wholesale properties if they are 65% Loan-To-Value including purchase price and repairs”….or “bread and butter three bedroom houses located in blue-collar neighborhoods”. Baloney!!!! Once again, the deals are where you find them and they know no boundaries are they simply ready for those willing to seek them out.
A three-bedroom house in some areas I've wholesaled in even repaired at 65% LTV were passed on by investors all day long. On the other hand in some areas I've wholesaled properties making money financed at 80% and still needing repairs. You see it is all a matter of the market you are in relative to the location of the property and strength/weaknesses of being a pro-buyer or pro-seller market.
So what do you do and how do you figure out which way to go? The answer lies in working backwards in wholesaling than traditionally what you think you would need to do. The very FIRST thing you need to do is develop a quality buyer's list. Let me just give you a couple of pointers on how to develop your buyer's list:
Run advertisement in your local paper for Sunday only in “Investment Property” or “Realty Wanted” section that simply reads: Rehabs and Rentals all areas and all conditions. Call now! 555-1212″. You're talking 2-3 weeks at on average $25 a week to get a good base of investors going. If you really want to be frugal then you can probably advertise for about half of that amount in the “Penny/Thrift Saver” publications.
Section 8 Goldmine!
You probably have the greatest list of strong and quality buyers right under your nose and haven't even realized it: Section 8 Landlords. For properties that most likely are in the true “rental” strong areas needing moderate to major repairs, then you will also find the cash-flow king-Section 8 Landlords. All you have to do is go down to the government Section 8 Office and ask if you can get the recent listings of Section 8 properties available. The contact and phone number for those Section 8 Landlords are the same exact quality buyers you are seeking. Now they are just a phone call away to put in your database.
You now have a quality buyers list and thee you start marketing for wholesale deals taking into consideration relative to what you can get for them in your market. There are some out there that will read this and dismiss wholesaling opportunities for example in a hot, hot seller's market like a South Florida or premium California area. Absolutely nothing could be further from the truth.
If you are in tune with your market truly understanding and knowing property valuations, then if the deals on the average are being bought by investors at the 85-90% LTV range then all you need to do is secure properties under contract at the 75-85% LTV range. It's that simple and don't make it harder than it has to be thinking you have to get “steal” deals to make money wholesaling houses. Even a 5% difference wholesaling a house of what you tie it up for and what investors will pay for can mean thousands of dollars of quick-cash in your pocket.
Take heart and just believe and know it right now that wholesaling properties for instant cash happens in your own back yard right now, and don't you miss out on the quick money opportunities. Good hunting as luck has absolutely nothing to do with it!