How to Reverse Wholesale Explained: Work Backwards To Get Deals Without Marketing!

So that's what reverse wholesaling is. Reverse wholesaling, what I teach and what I do myself, instead of being in this exact situation that you're in, you have relationships with buyers in the area that you're marketing to. So you can just make a quick phone call to them and say, hey, what would you pay for this deal? I'm talking to a motivated lead. And you have such a good relationship with these buyers because you've networked with them that you're not afraid that they're going to steal the deal. You're not afraid that you're networking and working with them. So the problem that you have, everyone has if they don't do what I'm teaching. All right, guys, we've got a small group with us today, but that's, that's all good. Let's do it. So I'm just going to open up the floor. You know, I'm here to answer any questions. I don't have anything specific to teach because I, you know, I don't like to just teach or show you guys how to do something if you, you know, if it's not going to be applicable or help you guys out. So let's just open the floor. Any questions? Questions. I'll answer whatever I can. If I can't answer your question, I'll just ask ChatGPT and it will let me know. So what do you guys got?

I have a question.

Lay it on me. What's up?

I've been doing the cold calling. I'm new to wholesaling, but I finally got a lead today with the guy that he's owned the house since the '90s. It's all fully paid off. He had renters in it for about 6 years now, but they just moved out. So I caught him at the right time. He does have photos online because he had posted it to rent it out again, but he hasn't found anybody. And it does need some updating. It hasn't been updated in the kitchen or the bathrooms in years. The roof hasn't been updated in a long time either. I don't have it under contract yet. I told him I'm going to try and figure out the comps and get him an offer. I was just wondering, I don't want to lock it up too high, but I also don't want to not lock it up. Do you have any tips? Just because I'm having trouble finding comps in the area. Although I did find one cash buyer who bought something within a mile, slightly above what the, what the tax assessment from last year was.

This is exactly, exactly why we have this call. Cause you're in a situation that happens all the time, right? You have someone that wants to sell, you don't know what to offer, right? And you wish you had someone that could tell you, right? So that's what reverse wholesaling is. Reverse wholesaling, what I teach and what I do myself, instead of being in this exact situation that you're in, you have relationships with buyers in the area that you're marketing to. So you can just make a quick phone call to them and say, hey, what would you pay for this deal? I'm talking to a motivated lead. And you have such a good relationship with these buyers because you've networked with them that you're not afraid that they're going to steal the deal. You're not afraid that you're networking and working with them. So the problem that you have, everyone has if they don't do what I'm teaching. Now you have to go the long route of, which is fine, uh, you have to do it sometimes. You got to run comps, you got to kind hope you're getting the right, the right offer out, get it under contract, then find a buyer. And then hopefully someone will want to buy it. When I teach, just already have your buyers in place, ask them, and if they won't pay, they'll tell you what their offer is. And then you can go to your, that guy and be like, hey, look, this is where I need to be. And you would just offer them a little bit lower so you can make your fee and your, your deal's already sold by then. Right? Yeah. So do you kind of feel like you're a little doing things maybe a little backwards?

A little bit, yeah, but I've just been— I'm new, so I'm just trying to do anything that, you know, I get it.

You're just doing what they told you and that's fine. But Brent has me on here because this is the strategy that I do, right? I find buyers first. So what market are you in?

I'm in New Jersey.

So what I would do is I would ask that guy— you ask him what he wants for the house.

He didn't give me an answer. I was trying to get some range, but he wasn't— he wasn't budging, give me anything.

So that's really tough. You're in a tough spot because you're going to do all this work and you don't even know where he's at. Right. So what I would do is like call a bunch of buyers, see if they're interested. And, um, which is good, probably good. This is a good exercise for you. But, uh, then you're, you're in a rough spot if you call them back and you're like, oh yeah, so I kind of have a better idea. And he's like, yeah, I want $1 million or something stupid. Then you're like, okay, that was a waste of my time. So you pretty much got to call this guy and be like, look, I work with a couple of people. I got to kind of understand what you're looking for so I can understand, like, so I can figure out if this is even possible. And you went the route where you're like, let me see, let me see what I can do because you probably got stuck, right? I can call him right now. Obviously, if I do the deal, I'm not going to try and take it from you. Like, we can partner on together if you wanted to, but I kind of want to show you how I do it. And how did you find his information? Were you just cold calling or what?

Just cold calling.

Yeah. So I can call him if you want and do the same thing and take him through my sales process and I can see if I have any better luck. Maybe I'm just flexing and he's going to shut me down just like you. We can try it.

I'm not fully against it. I just, I want to learn the process fully myself. I feel like it's cheating a little bit to pass it off.

You don't have to give it to me, man. I was just trying to help you out.

I appreciate it. I understand.

Yeah, that's what I would do. I would find some buyers in your area and I would ask them what they're willing to pay. And, uh, because you're kind of in a spot where it's tough, I can help you run the comps though. Okay, so let's take a look at this deal if you want me to help you run the comps.

Yeah, no, I would really appreciate that.

Okay, what's the address?

1424 Orchard Road.

Okay, let's check this thing out. All right. So this is the thing. $529,000 is what it says this estimate is. So he can't really ask for more than that if you're going to wholesale it. It's going to be pretty, pretty difficult to do that. So what I do is I look immediately, I put the location in here and I say, what are houses worth in this area that are similar? What are they selling for that are similar in this area? So this is a 3-bedroom, 1-bath, 1,600 square feet. So we're going to go put the filter 3-bedroom, 1-bath, 1,600 square feet.

Let's see.

So we're going to go in between here and go 3-bedroom. Was it 2-bath or 1-bath? 1-bath. All right, let's see what we got in the area. So this one is $429,000. Another thing is like you got to be— you can't be using comps that are like so far away. So yeah, you got to keep it in this range. So we got $650,000 is not bad. Let's see if what's sold, if there's any juice on what's sold recently, because a lot of states are nondisclosure. This one doesn't seem to be. So let's go the last— let's go with the last 90 days. Okay. According to this, nothing is sold in the last 90 days to the data they have. 6 months. That's not helpful either. Let's go a year.

Let's see.

Is there anything for a year? Okay, so $625,000. This seems pretty cute. But again, what happened a year ago, the market was hotter than it is now. So you have this one, $657,000. This was at— this one's not even that nice. Okay. Just, just from looking and getting a decent idea, I would say it's somewhere in the $600,000 range, even though this says $529,000. This, this, uh, oh, it's actually a 1 bath. 1 bath. I think you did say that. Yeah. Okay.

But I feel like the lot's big enough and I feel like there's enough room that possibly they could put in another bathroom because some of the other comps I saw that were 3-bedroom, 2-bath had about the same square footage.

Okay.

I'm not an expert on, on rehab at all, but I was just trying to—

so this is an older home. In order to flip, yeah, in order to flip it, you'd probably have to redo that kitchen, redo the bathrooms, uh, that downstairs bed. Yeah. So this would be like a medium rehab. So we're going to throw this into my offer calculator that tells you exactly what to offer when you're making a wholesale offer. So let's say this thing's worth $600,000 fixed up. I feel pretty confident about that just from what I've looked at. Let's just throw out the offer price of $400,000. It's going to medium rehab on 1,600, let's just say 1,700 square feet. You got your hard money costs. You have your 2% for your, your points that you have to pay with hard money, 15% down. It's probably going to take about 6 months to flip, 6% for listing, and then 1%. So you want this to be in the green for this to be a deal for a flipper. If you wholesale this to a flipper for $390,000, it would be a great deal. They would take it. They would definitely do this, right? Because they're making, they're making a good return on their money. If you do it, here, it's potential. If you wanted to make like $10,000 on this and you got it for $400,000 and you sold, sealed it to someone for $410,000, they'd still make $74,000. They'd make a 12% return. So, you know, if you want to be safe, you're going to need to get in the green. You're going to need to get it to someone at $390,000. Now, $395,000 is probably like the most that you'd have to give it to them for if you want it like a for sure deal, because you said, hey, I don't want to lock this up too high, right? Well, then this would, this would not get you too high according to the math. So you got to get it less. So if you want to wholesale it to someone to make a 15% return, you'd have to get it at whatever you're trying to make. So if you're trying to make $15K, you get it at $380K, right? And there's a different calculator that I use for wholesaling, but I just did this on the flip one. It's the same thing. It just lets you add your wholesale fee. So it makes it a little easier math. But yeah, if you go to that guy and you say, hey, look, you know, I can close on this thing in 14 days or in 30 days and give me a 7-day inspection. I can, I can do $390K. All right. Or $380,000, and he says yes, then you got a deal. And if he says no, then once eventually what you're going to learn is how to present options to sellers. Be like, okay, you don't want my cash offer? Well, have you thought about just fixing it up yourself? And then he's like, nah, I don't have the time or the money. I'll say, well, uh, we have a program, a full-service program where we can bring this to the open market and we can list this for you and we can take care of any of the repairs out of our own pocket. And that's called an innovation. Or you can do owner carry program, which is essentially just seller finance. So there's a lot of options. No, you don't have to worry about that at moment because you're newer, but there's, there's a lot of ways to make money other than a wholesale offer. And most, 90% of the time, a savvy investor, unless they're motivated and they have to sell, uh, or the house— this is actually a decision tree I made. So if they have no time, they're going to take cash and/or a seller carryback. If they want the highest price, they're usually going to take these options. If the house is listed, they're going to take these options. If the house needs a ton of repairs, these minimal repairs, they're going to take these. This is— I made this for my team so they could know exactly what options to present. But I'm not trying to overwhelm you. All you got to do is make the guy an offer, 380. If he denies you, there are other options available. Whether— if you're not ready for those yet, that's okay, but you'll get there. Just know that a cash offer is not going to get accepted 95% of the time because people want more, like, obviously, realistically. And there's other options to make money.

All right.

Yeah.

Thank you.

All right. Good luck, dude. Go call him. You got an idea. Say, hey, ran comps. I know what I can do. Again, the problem you have is this guy, you don't know if you just wasted your time because this guy could be wanting half a million and you're like, well, I can't obviously, no, no one's taking that. Right. All right. All right. So, uh, any other questions, any follow-up to that?

So I should give him a call and get an idea if we're in the same ballpark and then, and then start making calls to the cash buyers and just kind of confirm.

I would call cash buyers already. Like, if you're going to do this the painless way, the way I teach is I would establish relationships with cash buyers today because you're in the situation where you're like, you're not sure because you're newer. And how would you be able to feel confident? Well, get with some people that are experienced in your area that want you to bring them deals. So just call some cash buyers in your area, be like, hey, I'm new. I'm out here grinding, looking for deals. What do you want? And that's, that's what I teach too. So if you go here, if I show you my screen, so this is the community that I run and I give people like a buy box criteria of buyers that are actively looking to buy stuff. So they don't have to guess what they need to go bring them. So like, this is a hedge fund that I have that tells me, they tell me exactly what they want to buy and what areas, what criteria. What they're willing to pay, what they don't want. So I tell my people, I'm like, hey, stop just randomly trying to figure this out. I got your back and I have multiple buyers that I'm cool with. And like a second I could call that will tell me exactly if they want the deal or not. So I'm telling you to do exactly what I do, but in your market, right? Like go, go find some buy box criteria and go find these guys deals and you'll have these deals sold even before you get them under contract.

Yeah. Okay. Thank you.

All right. Well, like I said, go find your buyers first. It helps you avoid a ton of problems and a lot of heartache and headaches. Because if you just get a property, lock it up, and you don't know who's going to buy it, you got, you got like a 50/50 chance if you didn't do your numbers right, or maybe you just don't know the area that well. But if you know your buyers and you know people in the area and you can just call them, it helps a ton to, uh, to be able to display your properties quickly.

Mm-hmm.