Wholesaling in real estate is an entire business in itself and generates super-fast profits, usually without ever acquiring the title on the property. It’s not uncommon to pick up a check at closing, with the seller and buyer present at the same time. Many times I have earned thousands of pounds within two or three days of finding a deal. Successful people in the wholesale business are accomplished at locating good deals and marketing them – primarily to people who are in the rehabbing and retailing business. The first purchaser is willing to take a smaller, fast profit and leave the larger profit to an investor with the time and money to buy, repair, and sit on the house until it’s sold.
Some people are making a good income by buying and then reselling immediately only once or twice a month. These deals require no money, no credit, and no bosses. Believe me, if you locate a deal, someone is waiting to buy it from you.
Finding bargains for bargain hunters is the easiest and quickest way I know to pick up a check for at least 5000. The whole process shouldn’t take more than 15 to 20 days from the beginning to the end. Following are some tips for wholesaling:
1. Don’t pay too much. Remember, you’re selling to bargain hunters. Leave them plenty of room to make a profit or you won’t find a buyer. That means they should net at least 20 percent of the sales price after all expenses.
2. Your only exit is to sell for all cash quickly. Make sure your buyers can get the cash and aren’t relying on bank financing. Don’t allow buyers to learn banks won’t finance junkers at your expense. If a buyer can’t close in 15 days or less, find another buyer.
3. Use an assignment of contract and let your closing agent collect your fee.
There’s really not that much to learn about wholesaling. It’s an easy real estate business. Many people are doing one to ten deals a month and netting a decent earning. Some make more on one wholesale deal than most people make in a year on their job.
Ages ago, people lived in elaborate and magnificent castles that were often protected by moats. A moat is a wide, deep ditch dug around a castle to prevent enemies from overtaking the castle. By surrounding the castle with water, moats served as an effective deterrent and provided the castle with the security it needed to prosper.
Today, many of us live in our own plain and simple financial castles that are much more vulnerable than the castles of yesterday. Not only do our financial castles not have any sort of moat for financial security, many real estate investors do not know how to build a moat to accumulate wealth and retain it.
Why do most people today not have a financial moat? Why no financial security? Why are most people so financially vulnerable? We live in a culture that has brainwashed us into thinking that we should be paid per hour of work.
If you are like most people, you have to work for a living. If you don’t work, you don’t get paid. You see, most people have linear income. So while linear income may be the way most people earn their paychecks, it is also the reason many of us cannot afford to retire. This type of income continues only as long as you continue to work.
1. If you are an attorney, you get paid whenever you represent a client. If you don’t provide legal services, you don’t get paid.
2. If you are a teacher, you get paid when you teach our children. If you decide not to teach, you dont get paid.
3. If you wholesale or retail houses, you get paid when you flip a house to another investor or sell it to an owner occupant. If you quit wholesaling or retailing houses, you don’t get paid.
The real test is that if you are let go by your employer as I was in June 2002, your income definitely stops. After almost 30 years of working for security for different companies, I was left out in the cold in the middle of summer. I discovered I was not secure; I only had the illusion of security. Working for a company is fine, but you must understand it will never give you security.
That’s how linear income works. You receive income when you work. Usually you earn just enough income to pay your bills. When your income stops, youre on the brink of disaster. In fact, if youre like most folks, youre no more than two or three paydays away from a serious financial catastrophe.
OK, so how do we start to build the moat that will provide us with financial security?
You start digging a ditch around your financial castle with residual income. A complete change happens when you start earning residual income. Residual income means you continue to earn money for a long time. When you do something right just one time, you get paid over and over again for what you did.
a. If you write a hit song, you get a small royalty every time the song plays on the radio.
b. If you write a book that becomes a best seller, you receive a regular royalty check from your book sales.
c. If youre already a multi-millionaire and had a few million to invest in quality stocks and bonds, you now get a regular dividend check.
Residual income sounds nice, doesn’t it? Unfortunately, most people have trouble developing a residual income.
Why?
We can’t sing or write music. We don’t know the first thing about writing a book, much less how to go about having it published. And I really cant remember the last time someone came up to me and told me they had a few million pounds sitting in their checking account waiting to be invested.
However, there is hope.
There is another way to develop residual income. Theres a way to get monthly checks so that we can do the things we want in life. So that we can achieve our dreams. And best of all, almost anyone can develop this residual income that will give you the financial moat you need to accumulate and retain your wealth.
It was only after my wife asked me how many properties I had kept for ourselves at the end of 2004 that I realized that my buy and sell plan was making us very good money, but it would not make us wealthy. I realized I had to keep buying and selling properties to keep making the money. So I launched a strategy that complemented our buy and sell strategy. The approach is to buy properties at substantial discounts, rehab the properties, and then rent them out. And the best part is that the tenants pay for my properties. Once the properties are paid for, I will continue to have rental income for the rest of my life.
But what about tenants and toilets, you ask. Well, everything has a price and youll have problems with your tenants. But you have options. You can (a) develop a system to minimize your problems with tenants, (b) retain a realty management company to deal with the tenants or, (c) offer seller financing to your tenants so they become owners and they no longer call you.
Personally, I like the buy and hold strategy for two principal reasons. First, I continue to accumulate assets or rental properties. Second, I will continue to receive residual income for the rest of my life whether I continue to rent the properties or elect to use a seller financing approach so I deal with a buyerowner and not a tenant.
The more properties you accumulate, the more residual income you receive. And the more residual income you get, the wider and deeper the financial moat you will build for yourself. The wider and deeper your financial moat, the more difficult it will be for circumstances to penetrate your financial castle. You will have the security you need to truly prosper.
House Flips How to Find Those Wholesale Real Estate Properties
The wholesale real estate property business can be difficult to penetrate successfully, especially for those entrepreneurs with little or no experience with the always-changing real estate market. Even with the various dips and changes in the real estate market, the market for wholesale real estate has always been around and probably will be around for as long as real estate is bought and sold. Even in the worst (or best) of real estate markets, there always seems to be a group of enthusiastic people who are looking to make money by buying real estate at a deep discount and then turning around to sell it for much more than what was paid the first time around.
The number one fundamental principle of the wholesale real estate market is to sell properties for as low a price as possible, and then turning around to sell it at a much higher price. This is a proven way to make a tidy sum profit, and it has proven successful for many real estate investors. The best real estate wholesale buyers will scout around the market when the market has plunged to all-time lows. These smart real estate investors then go on to fix up the property and then turn around to sell it at a much higher price than what it was purchased for. When a real estate investor purchases a wholesale real estate property, they will first make all the necessary improvements. This can range from a few touch-ups here and there to a full revamping and renovation. The real estate investor can then choose whether to rent the property out, or go ahead and sell the property.
In order to successfully operate within the world of wholesale real estate, it may be possible to make some arrangements and investments. For instance, one of these arrangements may include hiring a property locator. Many wholesale real estate companies will hire an individual known as a property locator. The property locator can be put in charge of handling many aspects of locating the best opportunities in the wholesale real estate market. The property locator is most commonly charged with finding, identifying, evaluating and securing real estate properties at wholesale prices. When the property locator finds something that suits the interests and tastes of the real estate investor, they will present their finds to the investor. Then, if the real estate investor is interested in what the property locator has found, the investor will purchase the property. Then the investor can fix up, change, rent out, or sell the property at a price that allows them to make a substantial profit from the investment.
You may be wondering how commissions work in the wholesale real estate market. There are generally two ways in which commissions are handled in the wholesale real estate market. In the first scenario, the property locator is paid a flat, one-time commission when the investor first purchases the wholesale property. The second way that commission is handled is in the following way. The property locator may get paid a percentage of the profit once the wholesale property has been sold. That is, the amount that the property locator receives has to do with the profit that is made from reselling the property.
Maybe you are wondering exactly what a property locator does, besides seeking out information about real estate that is new on the market. The property locator is also responsible for negotiating the discounted rates on purchase opportunities in the name of the real estate investor. What factors does the property locator use in order to evaluate a wholesale retail property? The property locator should definitely examine the after repair value (ARV) of the property, along with calculating the cost of repairs necessary, and the wholesale property rice.