- Real estate wholesaling: defined
- What's new in wholesaling
- Tips on wholesaling real estate
- Step-by-step guide to wholesaling real estate
First Things First: Defining Real Estate Wholesaling
Real estate wholesaling involves an intermediary, the wholesaler, who enters into a contract with a property seller, then finds a prospective buyer willing to pay a higher price. The profit for the wholesaler comes from the difference between these two prices.
Real estate wholesaling is an excellent investment strategy for beginner real estate investors. In wholesaling, you're the middleman. You find a seller, get a property under contract, then flip it to an interested buyer. Your earnings? The difference between the price you contracted with the seller and the price the buyer pays. It's a fast-paced, thrill-a-minute gig that's not for the faint-hearted.
What's New In Wholesaling Real Estate
Some of the knowledge bombs on this episode;
- No Risk, All Reward: How you can use a battle tested “No-Risk Strategy” to find qualified leads, secure contracts, and close deals, fast!
- Fear Factor: Our guest’s daily mindset hack that every real estate investor needs to adopt to escape hardships, gain momentum, and build an investing business that can weather any storm.
- Right People, Right Process - If you’re hiring your first team members, then you’ll want to arm them with these specific tools. (most growing real estate investors miss this step and pay for it later…)
- Transaction Coordinator: How this position boosts a new real estate investing business by accurately auditing calls and tracking closings. Hint: hire someone in this position, asap!
- Start The Clock: Copy this strategy to train your cold call team to get a property owner interested and get it under contract in under 7 minutes << you need to hear this if you want results…
- Similar Housing Pricing Strategy: Want a quick and dirty rule of thumb trick for pricing? Targeting zip codes with cookie cutter style homes might be a fast solution.
- Target on Assignment: How much our guest expert expects to earn on each contract (and the bare minimum to accept before you say no and walk away…)
- Brilliant Strategy #1: Our guest expert tells you why to consider using a different title company in each market.
- Brilliant Strategy #2: Why you should use a “runner” in each market to facilitate your inspections.
- Don’t Burn Your List! How to mail your list every day and keep them interested… (preventing list burn out is crucial for your business!)
- And much, much more…
Tips On Wholesaling Real Estate
1. Get Your Hands Dirty: Sourcing Prime REI Wholesale Properties
In the REI wholesaling world, you're as good as the properties you flip. Your job is to sniff out the underpriced, the undervalued, the diamonds in the rough. This is no time to be squeamish. You need to get your hands dirty.
So where do you find these deals? Dig through property listings, attend auctions, track foreclosures. Keep an eye on emerging neighborhoods, upcoming development projects. The best REI wholesale properties don't just fall into your lap. You need to do some serious treasure hunting.
2. Don't Be a Wallflower: The Importance of Marketing in REI Wholesaling
Once you've contracted a property, it's time to put on your marketing hat. But understand this – you're not just peddling a contract. You're selling a dream, an opportunity, a ticket to prosperity.
You've got to be vocal, visible, unmissable. Leverage real estate lead gen websites, social media, email blasts, real estate forums. The wider you cast your net, the bigger your haul.
3. Stay on Top of Your Game: Picking the Best CRM for Real Estate Wholesalers
Picture this: you've got a gold mine of leads but can't keep track of them. Nightmare, right? That's where a Customer Relationship Management (CRM) tool steps in.
The best CRM for real estate wholesalers isn't just a fancy address book. It's a weapon, a tool that helps you stay organized, follow up effectively, and close deals faster. A robust CRM should offer lead tracking, task management, and deal analytics.
Obviously we're a little biased - but Realeflow's CRM is the ultimate CRM for real estate wholesalers.
4. People Matter: Building Strong Relationships in REI Wholesaling
At its core, REI wholesaling is a people business. It's about building relationships, establishing trust, creating value. It's about connecting with sellers, buyers, and fellow investors.
Be there. Be reliable. Be generous. Create value, offer assistance, provide solutions. Remember, your network is your net worth.
5. Stay Hungry, Stay Foolish: The Journey of Learning in REI Wholesaling
The world of REI wholesaling is dynamic, ever-evolving. To stay ahead, you've got to be curious, flexible, open-minded.
Keep an eye on market trends. Participate in seminars. Immerse yourself in books. Join online real estate communities. Knowledge is power, and power is profit.
6. Walk the Talk: Taking Action in REI Wholesaling
So, you've armed yourself with knowledge. Now what? Now comes the fun part – action. In REI wholesaling, you can't be a spectator. You've got to be a player.
You need to be relentless, dogged, unstoppable. Knock on doors. Follow up on leads. Negotiate like a seasoned diplomat. In this game, there are no second place medals.
7. The Full Monty: The New Way of REI Wholesaling
Okay, you've got the knowledge, the tools, and the attitude. But knowledge without action is like a guitar without strings. Sounds cool, but can't play a tune. Now is the time to get your hands dirty.
REI wholesaling isn't a nine-to-five gig. It's an all-in, full-throttle adventure. You've got to eat, sleep, and breathe wholesaling. You have to be persistent, resilient, and a little bit crazy.
You need the tenacity of a marathon runner, the sharp eyes of a hawk, and the smooth talk of a radio host. You need to chase leads like a bloodhound. You need to negotiate deals like you're bartering for the last bottle of water in the desert.
In the world of REI wholesaling, there's no room for second best. You need to push yourself, challenge yourself, reinvent yourself. You need to set the pace, not just keep up with it. You need to be the leader, not the follower.
8. Embrace the Grind: The Secret Sauce to REI Wholesaling Success
Every journey has its bumps - and there are plenty of pros and cons to wholesaling that will give you the ride of your lifetime. But remember, a smooth sea never made a skilled sailor. Every setback is a stepping stone. Every failure, a lesson in disguise.
In REI wholesaling, you'll face roadblocks. You'll face detours. You'll face dead ends. But you can't let that stop you. You've got to use it to fuel your fire.
9. Read The Fine Print: The Legal Aspects Of Wholesaling
Different municipalities and states have different laws regarding wholesaling, so it's critical that you look into that. For more on the legal aspects of wholesaling, check out Legal Wholesaling Part 1 and Legal Wholesaling Part 2.
A Step-By-Step Guide To Wholesaling Real Estate
Hunting Down the Eager Seller
Begin by knowing your market and scouring it for motivated sellers. These are people who want to offload their property quickly, often due to reasons such as financial strain or a pressing need to move. You can source wholesale leads from MLS listings, utilize local ads, online platforms, real estate agents, and even word-of-mouth to find these sellers. Leave no stone unturned - the hungrier you are, the more deals you'll find.
Establishing the Initial Connection
Reach out to the motivated sellers you've identified. This is not the time for passivity - take the initiative, make the call, send the email, knock on the door. Remember, communication is key in this business. Be personable, be understanding, and be prepared to listen to their situation. Building rapport and trust can be the make or break in securing a deal.
Crunching the Numbers: Repair Costs & After-Repair Value (ARV)
You must conduct a detailed evaluation of the property, considering both current condition and potential. Calculate the cost of any necessary repairs, renovations, or improvements. Then, determine the After-Repair Value (ARV) - the potential future value of the property after these repairs. This gives you a clear financial blueprint for your potential deal. The closer your projections, the closer you are to making a great deal.
Mastering the Art of Negotiation
Negotiate a sale price that leaves enough room for profit after considering repair costs and ARV. Remember, you're not just negotiating - you're selling your solution to the seller's problem. Show them why selling to you at your price is their best option. Be assertive but fair, always keeping your profit margin in mind.
Securing the Deal: Contract Signing
Once you've negotiated terms agreeable to both parties, put everything in writing. Sign a purchase and sale agreement with the seller. This contract will detail the property, purchase price, and terms of the deal. Be sure to include an assignment clause in the contract, allowing you to transfer the contract to a buyer.
Unearth the Perfect Buyer
Now it's time to find an end buyer interested in your deal. Use your real estate network, advertise the contract through appropriate channels, and leverage online platforms. The more people who know about your property, the better. Remember, time is money - the faster you can find a buyer, the better.
Negotiating the Deal with Your Buyer
Once you've found your buyer, negotiate the terms of the contract assignment. This includes the assignment fee that you will earn as the wholesaler. Aim to strike a balance that ensures a good deal for your buyer while maximizing your profit. Your negotiation skills come to the fore again, so use them to your advantage.
Sealing the Deal: Contract and Title Transfer
The final step in the process is to complete the assignment of the contract to your buyer and facilitate the transfer of the property's title from the seller to the buyer. Wholesaling has its fair share of legal hurdles, and engaging a real estate attorney or title company to ensure the transaction is legal and smooth (you can check out even more about legal wholesaling here). Once the deal is closed, you'll receive your assignment fee. This is the sweetest part - it's where you see your vision become reality and your hustle pays off.
So, get out there. Start hustling. Start grinding. Show the world what you're made of. Because in the world of REI wholesaling, there's only one rule – do it with passion, or not at all.