Why do wholesalers joint venture with you?
Wholesalers joint venture with us to benefit from our our large investor database and our experience selling wholesale properties. Here are a few more reasons why:
- You don't have to actually close on a property in order to wholesale it with us. Taking title to properties is risky and expensive. Selling deals that you have "under contract to buy" allows you to avoid paying financing costs, closing costs, holding costs, selling agent commissions, regulatory repair costs, and the hassles of dealing with the city.
- Our system ensures that you don't have to commit to a seller until you have an end investor lined up.
- You can achieve maximum possible selling prices. If you're only marketing your deals to a small number of investors, you're inevitably leaving money on the table. If you're new to the business, you won't have a very large database of investors. And even if you're a veteran, you know that the turnover rate in this business is high. This means that the pool of investors is in constant flux. Investors are always leaving the business while new investors are entering the business. This is why a fresh and robust database of investors is so important.
- If you think a seller is "shopping" you on price, you can offer our investor network as an alternative. This helps convert low-probability leads into closed deals.
- If the municipality in which the property is located requires repairs, you can't legally re-sell the property without completing the repairs first. In other words, you are stuck with the risk and liability of any city-required repairs. Our system helps avoid this costly scenario.
- Many investors are willing to pay a premium for non-MLS properties since they have an easier time re-selling properties with no recent MLS history. As a result, investors are often willing to pay a premium for our non-MLS (aka "off-market") deals.
Do you joint venture with new or experienced wholesalers?
Both. About 70% of our deals are with very experienced wholesalers and about 30% are with new wholesalers.
Why do you structure the relationship as a joint venture?
A joint venture makes us a principal in the transaction. This ensures that our interests are completely aligned with you. In other words, we are not aligned with the investors who buy deals from us, we are aligned with you. This distinction is important.
How are profit splits handled?
Profit splits are based on a percentage of the wholesale profits collected. A percentage split removes any conflicts of interest often associated with flat fee structures. The actual percentages are determined on a deal-by-deal basis and depend on many factors. See our Pricing page for more information.
Can I market my deal to my own list at the same time you market to your list?
Yes. If you market to your own list and sell it, you owe us nothing!
I'm a real estate agent, can I benefit from working with you?
Yes. We work with real estate agents all the time. If you have a pre-MLS listing, we can market the property on a private-sale basis to qualified investors. And, we don't require any selling agent commissions. We can also wholesale any properties you own or have under contract to buy.
What types of properties do you wholesale?
We wholesale residential, commercial, tear downs, and undeveloped lots/land.
Should I use the purchase agreement on your website when working with sellers?
Yes. The conforming purchase agreement contains your state's Realtor Purchase Agreement (with the appropriate boxes pre-checked and the neccessary fields filled in) along with a wholesale-specific addendum that contains very important terms, buyer disclosures, and seller acknowledgements. This addendum has evolved from decades of combined wholesaling experience. It will guide you, protect you, make you money, save you money, and serve as the escrow instructions.
I have a wholesale property under contract to buy. Can we joint venture on it?
Yes. In fact, most of our deals involve properties a wholesaler has under contract to buy, not a property they own. This is one of the advantages in working with us. We structure deals in ways to ensure you never have to close on a property. You can expose your deal to a large number of investors without ever having to take title to it. Since taking title to properties is expensive (financing costs, closing costs, holding costs, etc.) and risky (risk of taking a loss, city hassles, etc.), selling deals that are under contract to buy is the preferred method of savvy, experienced wholesalers.
I have a lead on a wholesale property? Can we joint venture on it?
Yes. We can joint venture on deals in which you only have a lead. We can walk you through the entire process - from acquisition to sale.
Who closes your transactions?
We use several licensed and reputable settlement companies to close our transactions. When we're ready to put the property into escrow, we will let you know which settlement company we will ultimately use.
If I share information with you about a deal, will you keep it confidential?
Yes. All information you share with us will be kept completely confidential. Our reputation is very important to us, so you never have to worry about confidentiality or be concerned about anyone going around you on a deal. The only time we share information about a deal is when we have agreed to enter into a joint venture relationship and the deal is marketed.
What if I don't know how much to get a property under contract for?
Once we get an address, photos, and some basic details about the property, we'll have a good idea of the marketing price for the property. We are usually pretty accurate, typically within 5% of our expected sales price. You can use that information to determine how much to get the property under contract for with the seller.
I have a small circle of investors who I call whenever I have a wholesale property under contract. Why should I joint venture with you?
If you're simply marketing deals to a small number of investors, you're inevitably leaving money on the table. You will achieve a much higher sales price by marketing deals to over 1,000 people, rather than a handful of people. On average, real estate investors find that they make between 25-50% more in net profits when working with us than they would on their own - even after paying our fee. In addition to the incentive of higher profits, you also need to consider your time. We spend a significant amount of time marketing and selling deals. This is time you could spend marketing to find more deals. It's also why we often work with highly-experienced real estate investors - they place a high value on their time and understand the value we provide.
Should I close on a property before marketing it?
No. There's no need to close on properties. In fact, you should only commit to buying (waiving contingencies and/or taking title to) a property once you've lined up a bona-fide buyer for it. Closing on properties means you need to pay financing costs, closing costs, holding costs, and repair costs (particularly if the property is located in a municipality that requires Time of Sale Inspection Reports, Code Compliance Reports, or Repair Escrows). And, unless the deal is a slam dunk, you risk losing money if you can't find a buyer at your desired sales price.
What kind of savings can I achieve by NOT closing on a property?
Taking title to properties is expensive. When you work with us, you normally enjoy the following savings on each transaction:
- No Financing Costs: We usually have the investor fund the entire deal.
- No Closing Costs: We usually have the investor pay for our closing costs.
- No Holding Costs: No utilities, taxes, insurance, etc.
- No Selling Agent Commission: We usually have the investor pay their agent's commission.
- No Regulatory Required Repairs: We usually float the responsibility to the investor through a unique deal structure method.
- No headaches in dealing with city code compliance issues: Priceless!
There are other savings, but on lower price point properties, these savings can be worth tens of thousands of dollars (depending on the cost of any city required repairs before you're legally allowed to re-sell). On higher price point properties, the savings can be worth hundreds of thousands of dollars. And, you'll make your profit with ZERO risk.
Certain cities have "time of sale" inspections and "repair escrow" requirements. Can this affect my ability to wholesale deals in these cities?
Yes. If the city where the property is located requires "Truth-in-Sale of Housing" or "Code Compliance" inspections, or if the city requires "repair escrows," then you must structure the deal in a certain way to avoid violating local laws. When you violate these laws, it is usually a misdemeanor. Don't think you'll get caught? Remember, your competition is watching you and would love to see you go out of business! Depending on the city, if you close on the property and then try to find a buyer, you will likely be stuck. The city will require you to perform an extensive list of repairs and obtain a "Certificate of Occupancy" before you can legally re-sell the property.
How does it work on the day of closing?
We ensure a seamless transaction at closing by; 1) Having the settlement company prepare two separate buyer-side and seller-side HUDs, and 2) Separating the buyer and seller at closing by ensuring either; a) separate buyer and seller closing rooms, or b) scheduling the buyer and seller at separate times (i.e. the buyer in the morning and the seller in the afternoon). This is simply an additional measure to avoid any last minute issues at closing.
Who determines the marketing price for the property?
The marketing price is a joint decision. That being said, we always ensure no over-pricing or under-pricing of properties.
How do you structure deals when you sell them to investors?
Since every deal is different, the way we structure deals depends on many factors. As an example though, deals may be structured as regular assignments, reverse assignments, double closings, entity sales, trust sales, or straight sales. We'll have a better idea of how to structure the deal once we have more information about the deal. Whichever method we use, our deals are structured using the most sophisticated contracts in the industry.
Does a non-MLS wholesale property have more appeal to an investor than an MLS-listed wholesale property?
Yes. Many investors prefer to buy non-MLS wholesale properties instead of MLS listed wholesale properties. One of the reasons is that when the investor has completed the rehab and placed the renovated property on the market, retail buyers and their agents don't see a prior sold MLS listing or the price the investor paid. This eliminates needless arguments about how much the investor is making on the flip. While it is possible to see the past sales history in the tax records, it can often take several months (depending on the county) for the sales history to be updated. Oftentimes, tax records are not updated until after the investor re-sells (or has contracted to re-sell) to a retail buyer. This is why non-MLS deals are often very appealing to investors.
In terms of marketing the property, does it matter whether the property is vacant or occupied?
Vacant properties are inherently easier to market than occupied properties. However, if a property is occupied the most important factor to ensure we can sell the property is whether the occupant is cooperative with showings. If the occupant is present during the day, we can either limit the number of showings to just a few investors, or, if the owner can vacate the house for a few days (or for a better part of the day for a few days), we may be able to work with only 3-4 days of marketing time. So if possible, try to negotiate a window of time to make marketing the property easier. Please note that the ideal showing days and times are Tuesday thru Thursday, 9am to 5pm.
How many days do you need to market the property?
In most situations, we only need about 5-7 days of marketing time. The investors we work with are highly responsive. So once we send out a property alert email, we'll usually have a good idea of whether we'll have a taker on the property within this timeframe.
Should I obtain a key from the seller?
Yes. Always obtain keys, alarm codes, and/or gate codes from the seller so we can market the property. After receiving a key, you should make two copies. Then, hold onto the original key, place one copy in the primary lockbox, and place one copy in the backup lockbox (as noted below).
Should I put a lockbox on the property?
Yes. In fact, place two. We suggest using a Master Lock 5400D. These lockboxes provide better security and rarely jam. The last thing you want is to have a cheap lockbox come between you and a big payday. Don't be penny-wise and pound foolish - use a quality lockbox! Place two lockboxes at the property - a primary lockbox (at or near the door people will be entering through) and a backup lockbox (in a discreet location such as a gas meter or a fence). The backup lockbox ensures that we maintain access at all times in case something happens to the primary lockbox (i.e. it jams or if investors either intentionally or unintentionally remove the key). Lastly, you should always keep a third backup key in a small envelope.
Should I use an electronic lockbox?
No. Always use a manual lockbox. The investors we work with aren't always licensed Realtors, so they might not have the necessary e-keys required to open them.
Who are the investors that you work with? Are they pre-screened?
The investors we work with are proven performers. We pre-screen in two phases; 1) when they are procured and entered into our database, and 2) when we have a deal that they want to buy from us. If they want to buy one of our deals, we require the following; 1) Proof of funds, 2) Earnest money in cashier's check form, 3) They must use our contracts, and 4) They must use our settlement company. Screening in this manner ensures the highest quality buyers for our deals.
Frequently Asked Questions