For as long as I’ve been investing in real estate, the strategy of “Wholesaling” has been under scrutiny. For anyone who’s asking “What’s wholesaling?” It’s a real estate investing strategy where an investor negotiates a deal with a seller, puts the real estate under contract, market’s the contract and then sells the contract (not the house but the contract) for a fee. Instead of the original investor/buyer purchasing the house, they sell the contract to someone else and that person actually buys the property. Investors love this strategy. The real estate commission, many real estate agents, and sometimes home sellers who had bad experiences hate it. This week a bill was signed that essentially says “WHOLESALING IS BANNED IN SOUTH CAROLINA”. Yet, I’m seeing a ton of posts on my facebook feed from investors saying nothing has changed, just do a double close, there’s alternative ways to do it, blah blah blah, same argument that’s been said since the beginning of time. I’m also seeing tons of articles posted where people on the other side are saying that investors are acting like real estate agents, sellers are unaware of what’s going on and being taken advantage of, blah blah blah, same argument that’s been said since the beginning of time. Here’s what I recommend to real estate investors that are in this group. Keep wholesaling but ACTUALLY BUY THE PROPERTY. Stop with the contract assignments and start using PRIVATE MONEY to fund your wholesale deals. BUY the properties. Then, re-list on the MLS you will get WAY MORE MONEY when the general public see’s your deal. I used to do contract assignments all the time. Once i started actually purchasing my wholesale deals (using PRIVATE MONEY) we had way more offers come in. There was no grey area. Use Private Money. In my business we pay a flat 3-5% fee for borrowing funds for 45-90 days. If you are a lender in PMC and want to CRUSH it…align yourself with real estate investors who are doing WHOLESALE DEALS. If you are a real estate investor and “wholesale” properties, I’d recommend making it known to the group. I’ve spoken with a ton of lenders in PMC that would love to be a part of short term transactional funding for these types of real estate investments.
That is what I done several times. I buy the house and then sell it. That way I can show the seller all the properties I bought in the area and give the seller more confidence and I won’t have to be running like crazy to get a buyer before the contract expires.
Preach brother! Everyone! Noah and I are in this market and when we say there’s opportunity, listen up! I just had this conversation with our attorney and two pml lenders today. There’s going to be allot of opportunities for short term lending for sure. It has to be done correctly and safe. One way we are working to eliminate the constant shuffling of paperwork and money for our lenders, we are creating a LLC that offers “partners” a great return. This will provide significant buying power and help takedown multiple opportunities each month, maximizing returns. The LLC will then issue loans on behalf of the partners to our wholetail deals we underwrite and execute. Partners will receive quarterly distribution checks from profits. We will have multiple LLC funds to apply for in PMC! There’s disruption in the market and people that take the initiative to create opportunity the right way will make allot of money. As always brother your gifts of knowledge are helping allot of people understand and control their money. We appreciate you at REITactical! If anyone wishes to learn more send me an email: bobby@reitactical.com
I am one of those transactional lenders you speak of =) contact me for funding your wholesale deals. I do these all day. info@thevisionalchemy.com