What Is Reverse Wholesaling?

Frank Chen

Hi, Frank Chen here with REIClub.com, your link to creative real estate.

For today's video I'm going to explain what reverse wholesaling is, and how you can find cheap deals using this strategy with ZERO marketing costs.

So Traditional Wholesaling – you find a deal, then try to find a buyer as quickly as possible. Costs come with how long it takes you to do this (holding costs, marketing, etc.) You get paid a referral fee by simply putting the deal together.

Reverse Wholesaling is slightly different in that you find the buyers first, then the deal, which should remove a bit of the pressure of having to find a buyer within a short time period.

This is usually when deals fall through..

Step 1: Find the Buyers, NOT the Deal First

Build your buyers list
Public records
Look for properties purchased without mortgages (no banks)
When searching public records – Private name or company under “lender” – llcs
Craigslist – kw – wholesaler, cash buyer, etc…
Use websites like spokeo to find more info

Step 2: Secure Funding

Most cases you will use your buyers funds
Your own cash
Private money or OPM
Loan programs/lines of credit
Hard money

Remember: These deals are meant to move quickly so these funds are mostly transactional.

Step 3: Know the Process

How the transaction will work for the seller, for your buyer
What paperwork you need to use – consult with an attorney
How quickly can you close?
Any questions you can't answer, “Let me check with my buyer…”

Step 4: Securing the deal

Use the template your buyers give you
Public records – Pre-foreclosures
Bank Owned REOs – building relationships with banks
bulk deal portfolio from funds
underpriced deals on MLS
FSBOs
Deals from other wholesalers
Probate property and estates
Use simple paperwork to lock the property down (attorney)

This strategy is:

low risk
fast payouts
No money, no credit needed
Very scalable

When starting a business, your credibility and reputation are incredibly important. By doing diligent research, offering good deals, and sounding competent will help you build on your success and ultimately lead to more referrals, more momentum, more deals, and more paydays.