Instead of searching and negotiating real estate deals with various homeowners or realtors, many property investors and rehabbers look to property wholesalers for some of the best opportunities.
Real estate wholesalers provide convenience and expertise. They know how to find the best deals and rehab opportunities. And, they save rehabbers a lot of time and headaches.
But how does the property shift from wholesaler to you, the property investor? It’s pretty simple.
Here are the 3 basic steps to closing a deal with a wholesaler.
3 Steps to Buying Wholesale Real Estate
1. Get pre-approved for a hard money loan.
Wholesalers typically won’t negotiate with you unless you have proof of funds-- or are preapproved for a loan.
An easy way to accomplish this is to get pre-approved for a hard money loan and obtain a preapproval letter showing your financing is in place.
At Catalyst Funding, property investors can begin the pre-approval process with an easy online loan application. Once submitted, we’ll reach out to you within 24-48 hours with any needed paperwork. This may include bank statements or assets if you are planning to fix and flip a house.
If you are planning a buy and hold investment strategy, we’ll want to review best financing options for transitioning from a short-term hard money loan to a long-term conventional loan. Buy and hold investors use this financing strategy for speed in obtaining properties and to secure investment opportunities that conventional lenders may not initially approve, such as those in disrepair.
At Catalyst, our pre-approved clients also gain professional assistance in estimating ARVs and walking an investment property, along with being signed up for our wholesale e-list.
2. Be ready to move fast.
When you find a wholesale property you are interested in rehabbing, do your homework -- fast. Know the ARV and value of surrounding properties. Walk the property and be able to accurately estimate repair costs.
You’ll get quicker and better at this with experience. When first starting out as a property investor, find a mentor or contractor to take along and guide you.
When you walk the property, have your hard money pre-approval letter in hand. This little letter lets the seller know you are serious and makes any offer on the spot pretty darn enticing.
3. Contact your hard money lender.
Once you have a deal, immediately contact your hard money lender.
At Catalyst, our pre-approved investors can make a hard money loan request online. We’ll then send out the details of the loan and any other necessary paperwork. We typically close a deal within 10 days.
“When you see a good property, act fast,” advises Jeff Johnson, Director of Lending at Catalyst Funding. “The good ones don’t last long.”
At Catalyst Funding, our business model is built on taking a holistic approach with our clients. Whether you need guidance in rehab strategies, contractors, property management or wholesale opportunities, we are here to help you succeed. Contact Catalyst Funding today. 832.648.3626