Updated: Oct 27, 2022
How do you spot a good wholesale deal?
That’s usually the first question most of my Astro members have for me when they get started.
And it’s a good question!
When you’re fully immersed in your business and your industry, finding good deals can be almost instinctual, to the point that you aren’t even thinking about it anymore.
But sometimes what looks like a good deal actually isn’t.
Why Rehabs and Remodels Aren’t Good Wholesaling Deals
My student member, Pete, had come across a number of rehabbed homes from other investors; however, he was being told to stay away – a sentiment that I agree with.
Simple – because the value in these rehabbed and remodeled houses have already been realized. What do I mean by this?
When a house gets rehabbed or remodeled, that house’s potential has been realized. It’s been updated and upgraded to what an investor or buyer sees that house as to get the best profit.
In Pete’s situation, whoever the investor was seemingly mistimed or put too much work into that deal, they now have to deal with it, not try to pass it off to Pete.
We discuss it more in this video:
As you’ll see, there’s another complication with this as well – Pete’s initially discussing rental homes, but as I mention, that’s not how people are buying rental homes.
For us as wholesalers, we’re trying to find potential in the properties that we find; for Pete, his question should be “Where is the potential in this already rehabbed and remodeled property?”
And the answer for us should always be, the potential is for the seller.
Now, can you get a rehabbed property and use that as an opportunity?
Yes, but you’d have to spend far more money on that property – not to mention energy and time when your focus could be on a far better deal!
This is where knowing and learning the basic fundamentals of our business is crucial because the market is crazy right now and that has people spooked on several fronts.
Despite what’s going on, there is potential in the market, and you can absolutely not only find deals, but find ways in which to get that deal done.
There’s two different approaches to do these:
As a realtor
As a wholesale investor
If you have your real estate license, you can represent the seller and sell their property on the MLS; if you’re an investor, you can make a cash offer on the property.
Many of my Astro members hold realtor licenses, so they can do either one of these approaches. The important thing is to present the pros and cons to the seller so they can decide which of these work for finishing their deal.
And that’s it!
As always, if you’re looking for further help in your wholesale business or you want to get started in wholesaling, come join us at AstroFlipping, where you can get guidance, advice, and moreover, support as you go through this amazing journey!