The Profits and Pitfalls of being a Wholesaler in today’s real estate market...Creating Equity

Thanks Carol,

I have been doing these for awhile and had a good amount of calls from letters that I sent out, but really need to get back to the court house, I tought my daughter how to do this but you know, these 18 year old kid have more important things to do. Anyway thanks for the post.

Jay C

I must admit. I do disagree to some point. I was born in 59 and i am not the elderly. lol.

Randy

I was thinking the same thing!

Other than that, Carol, great post!

Karen

Great Post!

That's funny!! My husband was born in 59 and would kill me if he heard me say that he was elderly. LOL I have fixed the post just for you youngens!!

Great information ! Great humor too !! Gee I wonder where That puts me as I'm on the other end of that spectrum the rest of you are talking about?? I guess I'm an antique ! But all that aside you are correct about the OTHER numbers. You have validated what Dean has said recently. My digging is finding some pocket areas in this country that the values haven't fully tanked yet either. So working on getting ready for those. Will seriously use your info too . Thank you.

I feel like I have opened a can of worms here on DG...LOL

The important thing to remember is that the "BABY BOOMERS" Wherever they are on the shelf of life are the only ones who have equity in their properties. If they have not refinanced or recently purchased they have equity. Creating equity in a property in today's market is extremely difficult. With market values drastically underwater due to foreclosures it is becoming impossible to create enough equity in a property to make it a wholesale deal. Let's face it even the properties listed on the retail market for sale are being offered at "wholesale" prices compared to what they would have sold for 3 years ago. It is very hard to compete with the market with prices so low.

Therefore as wholesalers we must be creative and search for ways to create enough equity while still keeping the property appetizing to Investors which generally means offering properties at 30% or more below retail after rehab. The only logical way to do this is to find properties that have enough of an equity spread to wholesale. These properties are properties that were purchased years ago and the owner has paid down the mortgage balance.... AKA Probate properties.

Probates and Short Sales are the new wholesale market and we must learn how to tap into it if we are going to profit from it.

On a side note "antiques" are very valuable so we promise to handle you with care...

I feel much better now! How 'bout you, Randy?

Karen

I like your web site and I find it very helpful as well. Finding equity in a home is very hard. I found it a little to hard so I just focas on Subject to and take over payment then wrap it for a pay day later for the equity.I will check out the web site you mention about probate researching and the foreclosure site. I just dont get it how you can make money with the foreclosure deal yet or just call me crazy for not understaning the money which could be made.

I think what Carol is saying is anyone who may have purchase a home from 1988 and later may have equity in there home. And it true that people are know to pass in there fourtys and Fiftys. Some of those people may have put down the standard down payment of 10% or more as it was kinda the rule with realtors way of making sure the buyer is putting down up front money to purchase a home.

I am not sure how the market is doing where you are but here on the East Coast it is getting more difficult creating enough equity in a deal to make it a wholesale. With most of the properties upside down (Owner owes more than the property is worth) creating equity is a challenge. When I first started in wholesaling 2 years ago there was still enough room in the market to put together a great wholesale deal. Retail properties are now being sold at wholesale prices due to short sales and REO liquidations.

As I am on my mission to keep wholesaling alive and well I am determined to find probate properties. These properties generally have no or little mortgage balance leaving me enough room to create a GREAT wholesale deal and a GREAT profit.

I am looking for creative ways to find these properties and thought I would pick the brains of my DG family.... How would you go about finding probate or estate properties?

I don't do it but you know what section of the paper you will find those type of property leads on a steady basis. The ones left behind just what to get on with the rest of their life. Some will not want to stay in the house anymore, that happened when we lost my dad three years ago. Most will move in with children or to a warmer climate.So just remember you will be helping someone no matter what you or others think. If I was into wholesaling that would be one of the first places I would check.

Check the papers. Check with funeral homes. Go to funeral visitations. That's what I did. Got a Realtor, attorney, title company and the deal started all in one shot. Unfortunately the investor/buyer asked how I did it so quick, I told him, he backed out, told me not to call again, amongst other things he called me. The deal went bye bye as I didn't have another buyer, list to short. So make sure you don't tell them the how. I didn't know it at the time but the place was a FSBO so I put the pieces together.

I am working with both short sales and standard REOs here in the Delaware and Maryland areas. It is exactly the same case here as in New Jersey where you operate. It is a major challenge to create equity with the low prop values and the homes needing rehab as well.

Thanks Carol.

Randy Sherman
Elkton Maryland

Thanks for your input guys. Here is what I have been doing may help you guys...

Obituaries - Locate the deceased property by searching your local tax records with their name. Also search for the widow and the list of children as well by searching their name in tax records. Many times they own a property in a nearby County. You will want to mail a letter regarding your interest in the property to everyone. I do not mail until 45 days after the funeral. This gives them time to grieve and get their heads together.

Online Funeral homes websites - My son searches these websites and completes the steps above.

I know this is a rather morbid post however it is a very profitable one for you and it does help many families be freed from a burden like James said above.

The wholesale market has truly changed over the past year. Unless you are negotiating Short Sales like I am you will find yourself not being able to create enough equity in a property and therefore not making any money. If you truly want to make money in wholesaling NOW is the time to shift gears!!! You must go where the equity is and that my friend is probate properties....

Anyone have any more ways to find these properties? Please share so we can all benefit

Many old threads that need to be brought back.

Karen