Basic overview to wholesaling properties
Before we dive into the specifics of wholesaling properties, I wanted to quickly give you an overview of what this training will cover. I fully expect that by the time you are finished with this training, you will have at least completed your first deal or gained more knowledge so you can do more deals if you’re already flipping houses.
Over the next several weeks, I’ll be sending you training lessons that will teach you how to wholesale properties. I’ll be very specific as I teach and show you how to do this. Please also know that if you do have questions, leave me a comment. These are blog posts so you can comment and ask questions.
Now before we get started, I just want to give you an idea of one strategy that we are using to flip a ton of houses quickly while building long term wealth.
Here are figures for the last 6 months –
In 6 months, my partner and I flipped 45 houses. But that’s not what makes this exciting. We took some of the profit rehabbed 3 houses and kept them as rentals. It took about 4 months to rehab these houses but now we have 3 houses free and clear each paying me between $500 – $750 per month. Taxes, insurance and mgnt fees are about 30%. We end up with a little under $1300 each month from this. These houses after rehab are now worth $30K to $40K a piece. So in one year, just with these houses, our net worth increased $100,000. Pretty exciting if you ask me and this is what I want to show you how to do.
UPDATE: In the last 6 months (July – Dec) we flipped another 46 houses for a $97,000 profit after all acquisition and marketing costs. Was able to rehab a few more houses from some the profits and increase our net worth by another $100,000 and increased our cashflow by another $1000 per month. You get the idea… doesn’t take too long to build wealth using this strategy which is the ultimate goal here.
The very first thing I like to know when I buy houses is the market. No matter what market you are in, prices for homes will vary. For this training, we will be focusing on entry level homes because our goal is to quickly flip these properties to investors or rehabbers so you can make some quick cash. Since this is where the majority of buyers are, this is where we are going to focus.
It’s important that no matter what market you invest in, you should know there are hot spots. Meaning there are certain areas that sell really well and others that might take longer because the neighborhoods are less desirable. Instead of worrying about where the hot spots are, just know where the undesirable neighborhoods are, it’s much easier that way.
You don’t want to invest in neighborhoods that are war zones. I don’t care how good the deal is, you will always be better off investing in the best neighborhoods, even if you have to pay a little more. I’ll share some examples with you in the upcoming lessons of why this is so important.
Once you know the market, you can start locating properties. You can do this several different ways. For most of you, I’ll assume you work during the day and simply don’t have the time to drive neighborhoods all day. So you have to be creative and get others to do it for you, which I will show you how to do. There are lots of different methods of finding great houses to invest in which I will cover.
One of the options I’ll cover may require you to invest “out of state” but the great part is that you can do it all from your computer. It’s how I do a lot of my investing now because everything is all online and there are some amazing deals in areas where I don’t live and where you probably don’t live either. (The 91 examples above are all properties out-of-state) So I will show you how to expand your reach and find some great deals out of state.
After you’ve found the property, then you need to analyze it. You need to determine it’s value so you can make an offer. This is the main reason why most people never invest in real estate. They can find deals all day long, but they have a fear that once they buy it, they may never be able to sell it. So I’ll be spending a lot of time here showing you how this is done the right way, to really minimize risk.
Next you’ll need to run comparables, estimate repairs and really find out the value of the property, so that way when you make your offers, you will feel very confident you are getting a great deal and shouldn’t have any problems selling it quickly to an end buyer. Make sure when you are comparing properties you are comparing similar properties, same age, square footage, exterior, beds, baths, etc.
The next step in the process of wholesaling is obviously making the offer. There are some very specific rules you need to follow when making your offers so that if there are other offers competing with your offer, you have a better chance of getting the deal, even if your offer is lower. There are even ways to eliminate a lot of your competition so that you’re able to find these deals before your competition even knows they exist.
The idea behind wholesaling is buying a property low and then selling it low so you can walk away with a profit. Another fear for many who are just getting started is the money. How do I fund this deal once my offer has been accepted? The old days of using end buyers money to fund the initial purchase just doesn’t exist anymore. You need to have money to fund the initial transaction and then you can flip to your end buyer. So how is this possible for those who don’t have money?
The good news is that there are lots of people who do have the money and are looking for people who can find great deals. Believe it or not, these people are not hard to find either. They are just looking for a solid return. Private money exists everywhere once you know how and where to find it. Private money can even be as simple as friends and family. There are also other creative ways like hard money and transactional funding which we’ll talk about as well.
Once you have the deal and have the funding, the next step is finding the end buyer. This is not hard either. You should start today building a buyers list so you can capture buyers who are interested in great deals. This should actually be one of the first things you do as an investor and you should never stop building your buyers list. There are lots of different ways to build a buyers list which I will cover in more detail as the training goes along, in fact it might be the next lesson so that way you can start building your buyers list TODAY.
Again, I just wanted to give you a quick overview to begin with so you know what to expect in the upcoming weeks.
The last thing you will do is close the deal. Not much is involved here because the title company will do most of the work. In fact, you may not even need to show up at closing, unless you want to. The title company will handle everything. Then you take your check to the bank.
That’s the overview to wholesaling properties. I will break everything down so you know exactly how everything works and feel confident doing some deals. Once you do it a few times, it will become 2nd nature to you. You’ll know exactly what to do and you’ll eventually be able to eliminate your fears. So, I hope you are excited to learn more. I’ll be sending more training your way.
If you have any questions or comments, please leave them below.