How to Build a Part-Time or Full-Time Business Wholesaling Properties Advanced Wholesaling Strategies:
Today’s Goals: • To give you the “bigger picture”—how to move from wholesaling deals to having a business that wholesales deals • To ensure that you understand: • The wholesaling business • Why you get paid to wholesale properties • The key skills you’ll need to have or get
Today’s Goals: • To share the different lead sources you’ll have to use for buyers and sellers, and in what markets • To get you started “systemitizing” your business and hiring VAs and others in operating it • To share other ways of making money wholesaling—like financing deals for your buyers
The big picture Learn to do it Do it Systemize it Passivize it
The Big Picture: • Learn to do it: • Get a quality home study program or seminar • Study it thoroughly • Understand the business, the customers, the process, the paperwork • Do it: • Talk to sellers and buyers • Look at properties • Evaluate deals • Make offers
The Big Picture: • Systematize it: • Create step by step processes and checklists for what needs to be done to make a deal happen • Passivize it • Hire other people to run the systems!
Why Bother? • Because as a “wholesaler”, you: • Limit your income to the deals YOU have the time and energy to do • Rarely have time to work on the “important but not urgent” things in your business • As the owner of a wholesaling business, you: • Can do unlimited deals • Move into multiple markets • Step away from the business, and it still makes money!
Convinced Yet? • So far in 2013, my business has • Put 29 properties under contract • Sold 27 of those 29 • Generated $203,000 in gross income • And I have 3 other businesses! • What could YOU do?
What Wholesalers Do:A Review • We FIND MOTIVATED SELLERS • Of the kinds of properties other investors want: bread and butter and rental properties • We EVALUATE those deals • What’s the ARV? • What are the repair costs? • What’s a good price for an investor/buyer?
What Wholesalers Do:A Review • We TIE UP the property with a purchase contract • At a price LOWER THAN the one at which we can sell to a buyer • With “out” clauses so we don’t have to buy • We FIND A BUYER for the deal • Who can pay cash for the FULL purchase amount
What Wholesalers Do:A Review • We ASSIGN THE CONTRACT • With an iron-clad assignment agreement • For a cash payment of $5,000-$20,000 • Our buyer closes with our seller
What Wholesalers Do NOT Do • We do not “sell properties” (unless we close them first) • We do not “put buyers and sellers together” • We do not “take orders” from buyers • We do not market deals that we don’t have a legal interest in via a contract to purchase
WHY do you get paid so well? • Because you SOLVE PROBLEMS • Desperate sellers can get rid of properties fast, and for cash, and without a lot of fees or paperwork • Investor/buyers can get the same deal they would have negotiated for themselves—without the hassle
How do you bring value? • Because you’ve TRAINED yourself… • To find those desperate sellers • To understand your buyers • To correctly evaluate a deal from the buyer’s perspective • To handle the paperwork correctly and with no hassle to your buyers and sellers
Key Skills to Master • Understanding what makes a good deal for your buyers • Finding deals • Evaluating deals • Negotiating deals • Selling contracts
Why we do it: • CASH • It’s quick (<30 days) • It’s SIMPLE (no rehab, no tenants) • It requires relatively low skills • It makes money on deals that don’t otherwise “fit”
Why we do it • Daytona Ave, Westwood • 7 rm 3 br retail property • ARV $110,000 • Repair costs $40,000
Why we do it • Contract price $23,000 • Contract sale price $33,000 • Time from contract to sale of contract: 2 days • Assignment fee: $10,000
Why our SELLERS do it • Estate property • Out of town heirs • Needed major updating • Seller “didn’t need the money”, did need a 30 day close
Why our BUYERS do it • Has a full-time job • Renovates 2-3 properties per year • No time/desire to make 20 offers to get 1 deal
Why our BUYERS do it Paid: $33,000 Repairs: $40,000 Holding & sales costs $7,000 Total: $80,000 Sale price: $100,000 Profit: $30,000
How to Get Paid MORE, part 1 • Bring More Deals to the Table • From motivated sellers directly • From banks • From Hedge funds and other bulk buyers
Understanding “Supply and Demand” in the Wholesale Market • “Supply” generally refers to LISTED properties • There are ALWAYS motivated sellers in any market • There are ALWAYS investors looking to make money in any market
Why “Sellers Markets” Are Awesome • Most investors—your buyers—ONLY know how to find properties that are offered TO them • MLS properties • FSBOs • Sheriff’s sales/auctions etc
How to Find Deals When There are “No Deals” • In a weak market, you focus on developing buyers • hot market (or bubble) you focus on: • Finding off-market properties • On-market properties in weak segments
How to Get Paid MORE • Understand how to do MORE KINDS of deals
6 Kinds of Sellers: • Non-represented individuals • Represented individuals • Bank/listed • Bank/direct • HUD • Hedgefunds
6 Kinds of Sellers: • The differ in: • How they’re found • How negotiations are carried out • What contract is used • How they can be assigned • And they each have their own pros and cons!
Your Step-by-Step Guide to Big Profits in Wholesale Real Estate TheReal Estate Goddess’s Guide to Wholesaling Real Estate
All the basics, step-by-step,so that even a brand-new investor can wholesale a deal for a $5,000-$15,000 profit in 30-60 days The 8 best ways to find motivated sellers, so that you can fill your pipeline with great deals to sell How to interview and build rapport with sellers, so you can be comfortable making lowball offers The Real Estate Goddess’s Guide Shows YOU
How to screen leads in minutes,so you don’t waste your precious time with sellers who can’t or won’t sell How to find the “ARV”,even when there are no comps How to inspect properties like a pro, so that you really understand what needs to be done from you buyer’s point of view The Real Estate Goddess’s Guide Shows YOU
How to estimate repair costs,so you ALWAYS make the right offer How to “do the paperwork”so that you never HAVE to buy a property you can’t sell, but still have the deal tied up so you can make money How to find a buyer fast, so that your checks start rolling in immediately The Real Estate Goddess’s Guide Shows YOU
How to assign the contract and get paid BEFORE the closing… What happens at the closing... What to do when something “goes wrong”… All the details you need to wholesale your first deal, or wholesale MORE deals, and change your financial future GUARANTEED! The Real Estate Goddess’s Guide Shows YOU
The Real Estate Goddess’s Guide Comes With: • Your detailed course manual • The 18-hour audio training course • All the forms and contracts you need on CD • 3 months of email coaching on your deals
Your investment $1,398 $699 But today only, for you only, $699
The “Risk Reversal” Guarantee • Try it for 30 Days • If the detailed, real-world techniques don’t make you at least 10x your investment, return it for a full, no-questions asked refund!
Why wholesale REOs? • Lots of availability • Easy to find and view • No emotional investment by the seller • Why not?
The Challenge to Wholesaling REOs • Proof of funds requirement • Minimum earnest money requirement • The Addendum Restrictions
How to Overcome… Proof of funds/Pre-approval requirement Get proof of funds or pre-approval Get a pre-approval letter from a private lender, transactional funder, or hard money lender
How to Overcome… Minimum earnest money requirement A check is NOT required to make an offer Check must be “made good” at acceptance Acceptance= purchase contract signed by both parties Addendum signed by both parties Get the money from your buyer or a partner
How to Overcome The Addendum • Restrictions in the INSPECTION PERIOD • Sell or get out before drop dead date • Non-assignability • Use the land trust method • No disclosure of code violations etc • Check for yourself
How to Overcome The Addendum Utilities not turned on Assume EVERYTHING is bad Their choice of title company “Closing will be coordinated through [your title company]” No title warranties Get title search/insurance FNMA only-deed restrictions on resale Ask for waiver Don’t worry about it
How to Use Land Trusts to Avoid Double Closings • Sign purchase contracts “as trustee” • When you find a buyer, create a land trust with the buyer—or his company—as beneficiary • Go to the closing as trustee to sign all the docs; buyer brings the check • Your profit is paid outside of closing as a fee to the trustee • Get fired or resign as trustee