You always hear about properties falling into foreclosure. But what happens to them after that?
Steph is a Real Estate Wholesaler based out of Florida. She finds distressed, foreclosed properties and then flips them over to investors. Recently she obtained an $18,000 investment property for an investor, with rental income of $750/month (approx $400/month in cashflow). Can you say Cha-ching?
Without further delay, let’s start the interview.
BTD: We hear on the news that states like Florida and California are being hit hard with this real estate mess. From your standpoint, how is the wholesale business in Florida doing?
Steph: My wholesale business is booming right now! The market is flooded with short sale properties and REOs, and many buyers are unable to get financing due to the credit crunch. These factors are steadily driving prices down and resulting in an incredible buying opportunity for landlords and rehabbers who are looking to scoop up some serious bargains.
Many of the investors I am selling to have been patiently waiting for an opportunity like this to come around (again), and are buying up deals left and right.
To give you an example- the last deal I sold was a 2 bedroom 1 bath 900 square foot bungalow, needing about $10,000 in repairs. In today’s market, it would probably appraise for $65,000-$70,000. I sold it to a landlord for $23,000, and he plans to rent it out for $650-$700/month.
BTD: How do Investors typically find you?
Steph: I do a lot of networking, and a lot of advertising. I put ads up on Craigslist almost every day, and also put signs up around the houses I have for sale. I also try to attend as many investor meetings as I can so I can pass out business cards as well as flyers advertising the deals I am selling. Many of the investors I am working with now are repeat customers- they keep coming back because I bring them good deals. It’s a win-win situation.
BTD: What is some of the criteria that investors give you for finding properties?
Steph: Most of the investors I am working with right now are buy and hold guys/gals, so they are looking for positive cash flow, first and foremost. Some of them only buy in certain areas, while others will go anywhere as long as the deal is good. Most prefer concrete block construction and solid electrical systems that aren’t going to deteriorate in Florida’s humid weather (for example products from Champion Fiberglass), and will pay a little more for block homes than they will for frame homes.
BTD: If an investor were to contact you for the first time, saying “Hey Steph, I want to get the ball rolling. What do I need to do to make this happen?” What would you tell them?
Steph: Just give me a call or shoot me an email, and we can go from there. Once I get a clear picture of what type of deals you are looking for, I will contact you when I have something that fits your criteria. We will also need to discuss how you will be financing the properties.
BTD: What are some of the key items investors do, or fail to do, that allows a deal to fall apart?
Steph: I have had a pretty good success rate in getting my deals to the closing table. The deals that have gone South have been the result of the buyer’s financing falling through. Most of the investors I am selling to now are cash buyers, which makes the whole process run a lot smoother.
BTD: If someone weren’t interested in investing in Florida, what resources are available to help them find a wholesaler in another state?
Steph: I would start with Craigslist.org– many wholesalers that I know post their deals on CL. You could also put up your own ad on Craigslist (in the real estate services section) saying that you are looking for a good wholesaler to work with.
Real estate investor meetings are also a great place to network and find wholesalers in your area. Here in Tampa, there are several meetings throughout the week, and there is always a good mix of real estate professionals in attendance. Check your newspaper classifieds, as well as online classifieds (Craigslist), to find a REIA near you.
BTD: Steph, thank you so much for taking time out of you busy schedule to chat with us. We’re looking forward to your continued success.
You can keep up with Steph and her adventures on her site Flip This Wholesaler.