Wholesaling Help!

Wholesaling Help!

I found a property on Craigslist that is a 4-unit. It only shows the outside of the property which looks pretty run down. It is being advertised by a Realtor and I asked if I could set up a time to view inside. She stated they don't want to disturb the tenants so the offer will have to be subject to an inspection. How would I go about making this a wholesale deal if I can't even see what repairs need to be done? Would you pass on a deal like this? Thanks in advance for your help

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Natosha

You just simply make it clear that just as they want an accepted signed contract before they allow an inspection, your final offer will be subject to the outcome of said inspection. As you stated above (minus the wholesaling part!Smiling )How in the world can you make an accurate offer on the property?? Tell that to them and make it clear, your original offer is not firm until after your inspection.

Remember also that an income property is judged on how it produces income.
For example: you would not pay $100,000 for a property that rents for $100.
So along with repair estimates you will also need to know rents and see leases on all the units.

If you were buying this property yourself you would need much more info, but for wholesaling get these basics at least.

You will have to gather this info and make your actual offer during the inspection period. For now, get it under contract at there asking price. Then immediately do your estimates, then make your wholesale offer and start negotiating!

You may find out you don't want the deal and have to terminate during the inspection period, but the real world experience you gain will be invaluable.

Making the offer, getting in and doing the repair/rehab estimates, looking at the financials and leases, negotiating with the seller, all that stuff will be a great learning experience!

It might even turn out to be a deal Eye-wink How Fun! Got Buyers???

Good Luck,
Michael

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Knowledge is power, but execution trumps knowledge. Tony Robbins

http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site


Also on the contract

You can also state on your contract that the inspection period starts after you have received all financial information. I'm a little new with Multi Family, but I know you have to find out who pays the utilities and ALL the expenses that the owner pays besides taxes and insurance, like garbage and property management. Gross income minus expenses equals the net income. Deduct for assumption of vacancies and divide by the purchase price to get the cap rate. It's normal with multi-family to have a longer inspection period.


I detect

I detect an agent who is tired of just hearing inquiries with out any legs to stand on. It could be a way to sway away any person they feel is not a seasoned investor.

Also I do not think this agent wants to put too much of an effort in closing this deal or for this deal to close.

I would counter any resistance from the agent, with key questions a season investor may ask.

Such as do you have a clean title report no older then 60 days?

A rehab list of items needed to bring these units to full market rent ?

My pitch -> " look I know you receive a lot of calls and your time,like mine is very valuable. Once I have my numbers in order we can close this deal and you can have one less headache on your plate"

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Watch your thoughts, for they become words.
Watch your words, for they become actions.
Watch your actions, for they become habits.
Watch your habits, for they become character.
Watch your character, for it becomes your destiny.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Our Heart's Desire must be nurtured by our mind,to give birth to common sense, that will enable us to seek out the path less traveled, with the greatest Personal Growth. -J.R.-


tenants

They have to give the tenants at least a 24 hrs notice or in some cases a little longer so you the buyer can look over the property.The Realtor may want you to do a drive by to see if you really are interested in the property to see if you are real interested and proceed on from there, much success, Jim ( you got other good advice here as well)

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jbischoff


Update!

Hey Guys! Thank you so much for the quick responses. I really appreciate it. Here is an update. The Realtor emailed me back with the following information:

"I do not have any photos of the interior units at the present time. The current tenants have been there for many years. The 3-bedroom tenant just moved out and the unit is being prepared for rent. The seller will be putting Laminate flooring down and looking to be able to rent by the 1st of April. That rent will be increasing from $1495 to around $2,100, as rent for this unit was below market for a 3-bedroom. The 2-bedroom currently gets $1,200/month and the two 1-bedrooms get, $645 and $650/month. The current rents in the area vary, but are at least 15-25% higher, so there is increased income potential on this property. Annual Gross Income is $46,680.

This is a Standard Sale. The property needs painting and fencing rebuild on the exterior, and has increased income potential by adding a coin-operated washer and dryer, for which there is a hook-up already in place.

Water, trash and sewer is paid for by the owner, and electric and gas by the tenants."

She also stated that the owner is moving out of state and that is why he wants to sell. She just emailed me a few minutes ago and said that due to overwhelming interest she is setting up a one-time open house next week for all interested parties. Now I just have to decide if I'm still interested. I'm going to run some preliminary numbers based on the area and see what I come up with.

@Michael - no buyers yet. I have built up a list of about three people (I know, I need WAY more) so I will reach out to them if I do put in an offer. I have been attending tons of networking events to find buyers and I have one next week so if I do put an offer if I can bring the one-page with me and see if I can find any interest.


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