Joplin Area Real Estate Investor Association

Advice for Wholesaling “Package Deals”

Community of Real Estate Entrepreneurs


          It seems like every new Wholesale School student immediately stumbles upon a landlord who wants to sell ALL of his properties, then wants to know how to tackle a package of 4, or 9, or 37 single family homes all at once. And they're already rented, and the don't need any work, and the new wholesaler is excited because this looks like a deal that could make tens of thousands of dollars all in one fell swoop.

          These deals are problematic for a number of reasons:

  1. I rarely see one where the landlord isn't asking more-than-market for the properties. He's willing to sell, but isn't really anxious to sell
  2. It's basically never the case that the houses don't need work. Yes, I KNOW there's someone living in them. That doesn't mean that the roofs aren't 22 years old, or that the furnaces work consistently, or that they won't need a $5,000 turnover when that tenant inevitably moves out.
  3. Each property has to be evaluated separately, which is a LOT of evaluation for a deal that's unlikely to come together.
  4. Coordinating a single buyer to buy a whole package of non-turnkey properties, especially if they're in different parts of the city, isn't easy. Coordinating 9 buyers to close 9 properties on the same day is even harder.

          If you find one of these deals, here's how I suggest approaching it:

  • First, get a list of addresses, rents, and major repairs/upgrades needed on each property. If the seller can't be bothered to get you these, he's not motivated, and you can move on.
  • Next, comp each property. If he's asking full market value and has indicated that he's not flexible on price or terms, move on.
  • Assume that each property needs a MINIMUM of $20k in work, run your numbers. If he's asking a lot more than your numbers tell you you can pay and isn't flexible on price or terms, move on
  • If A-C seem fine, ask him to show you his best property and his worst one. If it turns out that even his best one needs more than $20k in work, adjust your numbers accordingly and make a soft offer for the package.
  • At this point, if you're a brand-new wholesaler, and the seller says yes, it's time to get someone more experienced involved in the deal. Yes, you'll have to give away some of your control and your profit, but if the package is bigger than about 4 properties, some or all of them will probably have to be CLOSED before they can be re-sold--it's just more practical to do it that way--and you'll need someone with money, or a bigger buyer's list, to help you with the full inspections/evaluations of all the properties.

          Most of the time, you won't get to E on these. I evaluate probably a dozen of these packages a year, and rarely put them under contract. When I do, it's nice, and yes, it's a big payday--but for the most part, they're not good wholesale deals.



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