Wholesaling

From CaseyPedia

Wholesaling a property, in Casey Serin's seminarland-speak, is the act of selling on a right to purchase a property to another investor. Wholesaling is often promoted in real-estate seminars as a good, low-cost, low-risk way of getting started in real estate.

In October 2006, facing foreclosure on most of his properties, Serin proposed wholesaling as a way to earn money to "repay every dirty penny" and described the process:

1. I find a great undervalued deal (fixer upper or motivated seller who want out, etc)

2. Make an offer on the property and tie it up with a contract

3. Assign the contract to the investor / rehabber who will actually close on it

4. In exchange I collect an assignment fee of $5-20K or more depending on the deal

5. I never actually buy the property, just put it under contract and sell the contract.^[1]

Needless to say he failed to follow through on this plan, favoring instead endless procrastination. He later revealed that he had only ever wholesaled one property, a jumped-up chicken shack in Durham, North Carolina, on which he made a profit of $500 in February 2006:

I know, it’s not much cash but the deal wasn’t all that juicy and I only spent 2-3 hours working on it. I did the entire thing by phone, fax and email. I made about $150-250/hour. It’s all good.^[2]

The flaws in Serin's reasoning were pointed out by several commenters: the $250/hour figure ignores all the hours spent locating, evaluating, and working deals which failed to work out:

The problem with $500 Sweet Deals that work out to be $150-200/hr is they are few and far between. What is the max potentional on these deals? 1 a month? So if you arent doing something productive with your time ( like a day job) you really arent making any money. You arent going to be closing a wholesale deal every day.^[3]

Basking in the memory of this past sweet deal, Serin went on to fantasize about bigger and sweeter wholesale deals:

As I formulate my comeback plan I may have to do some wholesaling but at a much bigger level. Wholesaling apartment complexes, commercial deals, luxury homes, mortgages/paper, etc..^[4]

See also: bird-dogging.

[edit] References

1. ↑ I Want to Repay Every Dirty Penny I Borrowed… via Wholesaling?, IAFF, October 6th 2006
2. ↑ Wholesaling Properties, Assigning Contracts; Seminars, IAFF, April 15th 2007
3. ↑ Few and far between..., comment by Jacks on IAFF, April 16th 2007 at 3:07 am
4. ↑ IAFF, ibid.