What is wholesaling real estate

HOWTOWHOLESALEREALESTATE STEPBYSTEP

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Table ofContents

What is Real Estate Wholesaling?

Is WholesalingReal Estate Illegal?

How to Wholesale Real Estate

Generate Motivated Seller Leads

Pre-ScreenSellers

Make AnOer toPurchase Property

EstateWholesaler

Wholesale real estate: Many people are ready to dumpthe 9 to 5 grindandjoin the worldof real estate investing

If you ' ve just discoveredthis magic,you may be wonderingto yourself "what is wholesalingreal estate"? This isn't acommon phrase that you hear in the news or in general conversations This article will explain what wholesalinghouses means,andgive you some basic information about how to wholesale houses

WhatisRealEstateWholesaling?

Real Estate wholesaling is aspecializedmethodfor buyingin every real estate market Some might refer to this as flippinghouses The process involves negotiatingadiscountedpurchase price on aproperty,and signingacontract with the seller Once the wholesaler andthe seller agree andafter all the contract has been signed,the wholesaler can assign his interest in the property to anew buyer for afee

Buyer of areal estate wholesale deal are typically alandlords or rehabbers Rehabbers rely on wholesalers to locateddistressedproperties for them at discountedprices so they can focus more on their business model

IsWholesalingRealEstateIllegal?

Real estate wholesalingis not illegal as longas it's done correctly You must have asignedreal estate purchase agreement with the current owner of the property Then can sell your interest to another person for afee The fee can be any amount that you andthe new buyer agree to

HowtoWholesaleRealEstate

Learninghow to become areal estate wholesaler can be adauntingtask There are many dierent coaches andreal estate mentors out there who teach dierent methods of structuringcreative real estate transactions. Moreover,the basic process of wholesalinghouses can be summarizedin 5 simple steps:

Here is the breakdown of the 5 simple steps to follow when wholesalingreal estate GenerateMotivatedSellerLeads

The ability to generate quality seller leads is where the real estate wholesale deal begins Execute a marketingcampaign that targets property owners that may be distressed(ie foreclosure Probate,and absentee owners)

Motivation is what will drive the seller to sell the property at adiscount price Moreover,without motivation from aseller,you'll findyourself beatingadeadhorse This will cause frustration to anewbie wholesaler, andmay even drive you to give up

Pre-ScreenSellers

Pre-Screen Sellers thoroughly to determine their motivation. Have aseries of questions ready to ask your potential sellers Listen for motivatedseller trigger keywords

More often than not,the person respondingto your marketingwill not be the right person for your real estate wholesalingprogram Not every seller is aqualifiedlead

Without an underlyingREASON to sell the house,andaneedto get ridof the house,you’re not goingto be able to get adeal If you want to shorten the pain of this inevitable problem that all new real estate investors will have,I highly recommendpracticingyour listeningskills When you can understandthe seller’s reason for selling,you can helpthem solve their problem

TipsforPre-ScreeningMotivatedSellersforWholesaleRealEstate Stay in control of the conversation

If the sellers start tellingyou how beautiful their house is,andhow much money they've put into over the last 50years,they're probably not your motivatedsellers They have an emotional andmonetary attachment to their property,andprobably just needto call aRealtor Discover their emotional reason why identifyingthem as motivatedsellers,then you can poke at it duringyour negotiations

Inquire about any outstandingmortgage balances

MakeAnOertoPurchaseProperty

Make the seller an oer that will work for both of you This means the seller receives aprice at closingthat they are happy with andyou buy the property cheapenough that you can assign your contract for aprofit That’s awin-win agreement

In today's competitive market,you may have to oer the seller ahigher price than your competitors,in order to get the property lockedup This means takingless of an assignment fee Since your contracts are such short term agreements,you'll be able to make aquick check andmove on,even if you do have to pay ahigher price

FollowUpwithSellers

If your seller doesn't accept your purchase price oer the first time,don't consider them dead. Follow up with every seller that you ' ve made an oer to Create astrongfollow-upfunnel that will convert sellers months down the roadwithout spendingany additional marketingdollars

Follow-upmarketingcampaigns can include direct mail,phone calls,text messages,emails,andretargeting on Social Media

ClosetheDeal

Secure your position in this transaction by gettingthe seller to sign your real estate contract for the lowest purchase price possible Use asimple,all-cash as-is purchase andsale agreement When you get to this point,you’ve gotten through the most dicult part of awholesale transaction Now you can market the contract andassign it to acash buyer HowtoWriteaRealEstateWholesaleContract

Writingareal estate contract can be intimidating,especially for anew real estate wholesaler The agreements usedin the business are typically very short andsimple without alot of contingencies Moreover,you can findStandardPurchase andSale Agreements at your local oce supply store

Listedbelow are the essential elements of awholesale contract:

BuyerandSellerName

As amatter of fact Both the buyer(s) andseller(s) name must be listedon the contract The parties must be 18 years of age or older andbe of soundmind The signatures of all parties involvedmust be presentedon the contract

The Property address must be listedon the real estate contract When possible,also include the legal description This can usually be foundonline in the property appraisers database or on adeed

PurchasePriceandEarnestMoney

The purchase price that was agreedto by the buyer andseller must be indicatedon the contract If there is monetary consideration (earnest money deposit),that amount must also be listedon the contract

ContractExpirationDate

All real estate wholesale contracts must have an expiration date This is the date that both parties agree to perform by,or the settlement date This can be negotiatedbetween the seller andthe buyer For a wholesale deal,the expiration date is typically 10-30days

BestMarketingListsforWholesaleRealEstate

The key to asuccessful real estate business is learninghow to generate motivatedseller leads There are some core lists of people that you can target to findthe sellers that are willingto work with you Once you can generate the right leads,you're potential deals will be plentiful

Probates

Divorces

Delinquent Property Taxes

Quit Claim Deeds

Code Violations

Landlords who are EvictingTenants

HowtoFindBuyersforYourDiscounted Properties

Investors that will buy your contracts from you are typically people who own rental properties and rehabbers (fix andresale). Their exit strategy is completely dierent that yours. This makes for an excellent business relationship Astrongreal estate wholesaler keeps alist of qualifiedcash buyers

Here are some ways to locate cash buyers:

FacebookGroups

There are hundreds of Facebook Groups that are full of cash buyers If you join these groups andthe members in the groupget to know you through social networking,you’ll have agreat pool of buyers to sell your wholesale properties to

Craigslist

Craigslist has a“Real Estate for Sale” classifiedsection where you can post your properties Dependingon where you love,you may or may not have to pay asmall fee to post your listing Moreover,when potential buyers respondto your ad,you can start buildingyour cash buyers list

Website

Setupawebsite that is exclusive usedto collect buyer leads andpresent deals to your wholesale buyers Usingaleadcapture form andoeringexclusive peeks at deals before they’re marketedto the public is a great way to buildabuyers list Drive trac to your website through direct mail,social media,social media groups,andcar magnets

LocalREIAMeetings

There’s aplethoraof cash buyers at the local real estate investor meetings Attendthe meetings andcome preparedwith information about the properties (contracts) that you have for sale

Realtors

There are plenty of real estate agents who work with cash investors,both local andout of state buyers Search for these Realtors online andbuildrelationships with them If you buildin enough profit into the deal, you’ll be able to oer acommission to the Realtor by helpingyou sell your contracts However,be sure the Realtor that you chose to work with understands real estate wholesaling

ExplainingRealEstateWholesalingtoASeller

Sellers are very savvy in today’s market They are familiar with real estate wholesalingandif you’re working with the right seller,are acceptingof it Moreover,the best practice when it comes to sellers is to be totally transparent about your role in the transaction

Be honest with your seller andexplain the process,the risks,andthe rewards Let the seller know your intention is to assign your interest to another buyer The right sellers will get on board

DoYouNeedaRealEstateLicenseTo WholesaleRealEstate?

As amatter of fact areal estate license is requiredto buy or sell aproperty for someone other than yourself andbe compensatedfor that Moreover,as areal estate wholesaler,you’re sellingyour interest in the real estate viathe contract that you have with the seller It’s similar to obtainingamortgage,andthen the mortgage company sells your loan o to another company

#7 -Access to the MLSfor Comps andMarket Data

#6 -Ability to Findyour Own Deals (REO's,motivatedsellers,etc)

#5 -Ability to List Your Own Deals (contracts,rehabs)

#4-You will know the laws of your state

#3-You can fill income gaps with Realtor activity income

#2-You can refer leads for areferral fee

#1 -Eventually become abroker andopen your own oce (for the ambitious only)

CanYouReallyMakeMoneyWholesaling Houses?

Wholesalingreal estate can be very lucrative In fact,it's one of the easiest business models to make fast money There's plenty of misconceptions about how " easy " it is to get started One of the biggest challenges is gettingthings o the groundandclosingyour first deal

Learningthe business is like learningany new trade Firstly,you start with the basic concept andthen start fillingin the details Eventually,it becomes secondnature andyou can do your work with your eyes closed

TheMindsetofaRealEstateWholesaler

There seems to be acommon mindset for those who are successful in the real estate wholesalingbusiness Once you have establishedthat this is areal business andit needs to be treatedas such,you can really start diggingin

ConsistencyistheKeytoSuccess

Whether you are brandnew to the real estate wholesalingbusiness or have been in it for years,you should know that consistency is the key to success Moreover,once you get your system runningthen it's imperative to keepit runningin order to keepdeals comingin

HowMuchMoneyCanYouMakeWholesaling RealEstate?

The amount of money that you can make as areal estate wholesaler depends on how much time and money you have to invest in your business The first year may be your lowest reportedyear of income, without $50,000andit shouldincrease from there Many wholesalers easily earn as much as $1,00000000 per year

WhatisanAssignmentFee?

An assignment fee is the amount of money that the buyer pays to take over the position of the real estate wholesaler in the contract This amount can be apercentage of the purchase price,or aflat fee It is negotiatedbetween the buyer andthe seller of the contract The assignment fee can be paidat the time the interest is sold,or at closingas aline item on the Settlement statement

HowtoGetStartedWholesalingRealEstate

When you’re ready to get startedas areal estate wholesaler,the first stepis to construct amarketingplan The goal is to start generatingleads Motivatedsellers are the lifeline to your success Direct mail,Pay Per Click Advertising,bandit signs,andcoldcallingare just afew methods you can use to start generating leads

To beat the learningcurve,you’ll want to enroll in atrainingcourse or findareal estate mentor Either of these can helpeliminate some of the common mistakes that new real estate wholesalers make (like oeringtoo much for aproperty)

HowtoWholesaleRealEstateWithNoMoney

If you don’t have any money to fundyour marketingcampaign,you can oer your time to an experienced wholesaler in exchange for mentorship Similar to an internshipyou can do certain tasks for abusy wholesaler like takingphotos of houses,andmarketingproperties in exchange for some valuable knowledge

Drivingfor dollars,coldcallinganddoor knockingis another way to get startedwithout any money However,this isn’t the best business model,since it will be hardto sustain once you start gettingbusy with sellers andclosings Make it apoint to shave agoodportion of profits o of your deals to invest back into your business

WhatisVirtualWholesaling?

Virtual wholesalingis when you’re areal estate wholesaler that is doingbusiness in an areaother than that of which you live Moreover,most of the research,communication andtransactingis done viathe internet Many wholesalers of real estate have hadgreat success doingvirtual wholesalingin multiple markets YourFirstDealIstheGameChanger

There are pros andcons to beingin the wholesalingbusiness It's alittle challengingat first,but Once you close your first deal andthe money is in your bank account,your life will change forever You'll have the validation that you needto continue the journey andmaster the trade

Watch this video about my first deal that I closed it literally changedmy future forever

Top3MistakestoAvoidWhenWholesaleReal Estate

Everyone makes mistakes when they're first startingout as areal estate wholesaler We have to learn to grow andearn more money Here's alist of some very common mistakes that care made in the real estate wholesalingbusiness Usually,mistakes are made by newbies Sometimes the same mistake happens over andover

1.Don'tSpendTheMoneyUntilit'sintheBank

It's very common to want to start planningon how you'll spendthe check once you get it Be sure that as a matter of fact the deal has been closed,fundedto all parties before it can be consideredas aclosed transaction

2.AlwaysCollectEarnestMoneyDepositfromYourBuyers

If the buyer ties upyour house for 14,21,or even 30days,andthen doesnʼt close,he will be in default He will lose his earnest money deposit Be sure to collect an amount that is acceptable to you shouldthis happen

3.Never,EverTurnOYourBuyingMachine

Keepingyour marketingrunningautomatically in the backgroundat all times will helpyou keepan endless supply of motivatedseller leads,hot deals,andbigchecks The best way to ensure that Wholesaler's lead generation machine is well oiledandalways runningis to hire avirtual assistant to get things done!

Create amonthly marketingcalendar andassign the tasks to your Virtual Assistant to make sure that the marketingcampaigns continue to run,even when you ' re not there or don't feel like workingthat day

Every successful wholesaler shouldtake the time to educate themselves on the basics,andon the advancedtechniques that can be appliedin the business The Total Access Pass covers everythingyou needto become amaster

6commentson“HowtoWholesaleRealEstateStepbyStep”

EdwardCheeksays:

do i get acontract to sell or have them sign aoer to purchase then have them sign an assignment?

Reply

TracyCaywood says:

at Who are you referringto when you say "them"?

Reply

melissa says:

at wow,what avaluable resource your website is I'm havingfear of puttingahouse under contract without havingasolidbuyer,I have potential buyers,but nothingconcrete Any suggestions

Reply

TracyCaywood says:

at Real estate deals fall apart all the time There is aremedy for what happens if you breach the contract The seller gets to Keepthe Earnest money Deposit be sure to readthe blogpost about Earnest money Deposits

Reply

Jamilecolinsays:

What’s agoodway to findbuyers? Are bandit signs worth it? Andafter you make aoer andget them under contract do you sendit to the title company then or after you finda buyer

Reply

PropertyMOB says:

at

Thanks for those great questions,Jamile!! All of the answers can be found in the total access pass training https://propertymobcom/product/total-access-pass-to-property-m-ob-academy/

Reply

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