1 of 10 - How to Wholesale Real Estate*******

I feel like the first post in this series should be powerful, direct, and catchy. That is why Wholesaling is the first topic. It is one of the easiest ways to begin investing. Think about it...there is a way you can start investing in real estate without having to buy any properties, without having to get a loan, without having to use your own money, without having to quit your day job, and without a lot of risk. All it takes to become a wholesaler/bird dog is some knowledge of your market, some investor contacts, and some desire. It is as easy as that. I know it sounds too good too be true...just remember this is not an info commercial. I will not be asking you to buy anything. Just read on and learn.

First, what is wholesaling? When you think of wholesale you think of buying a product in bulk for a cheaper per unit price and then selling each unit individually at a higher price. You think of Costco, right? Well when it comes to real estate that is not the definition of wholesaling. You do not, and I repeat, do not need to buy properties in bulk and resale them. No. Don't even think about it. That is what developers do. Not you, a beginning investor. What is referred to as wholesaling in the real estate investor world is this. You will be a middle person, similar to wholesaling a product. You will find a deal, put it under contract, and then find an eager investor who will take over the contract for you. Sound complicated? It really isn't. Let's break it down.

1. Before you start ever looking for a deal you need to do two things, not necessarily in this order: join a real estate investment club and find a good title. A good title company is one that has experience working with investors. How do you know which title company is a good one? You go to your local investment club meeting and you start asking around. Talk to as many people as possible, asking as many questions as possible. You see, a great deal doesn't come around every day so when one does you need to be prepared to act on it. Being prepared consists of not only having a title company, but also a real estate agent, list of investors, and anything else you need to feel comfortable moving the deal along. Once you know what title company will work with you and you know some people who are looking to buy properties. Then you have to find a deal.

2. Finding a deal can be the most difficult and time consuming part of the process. There are many ways to find deals. You can read my other article about how to find deals in any city you live for more useful tips and hints. Do your homework and find a property that has a lot of equity and that will have positive cash flow. Later in this series you will learn more about positive cash flow. Without these two things no savvy investor will want to buy your property. Once you find the deal, the next step is to get it under contract.

3. Getting the property under contract solidifies your rights to buy or assign the property. As a wholesaler you will assign your rights to another investor who will buy the property. You will not have to buy the property unless you reall really really want to. Your goal is not to buy a property though. Your goal is to find someone who will take over the contract and close on the deal. You will only get paid if the deal closes. This means you need to provide the assignee (buyer) with all the information you can upfront so that there won't be any reason for the deal to follow out of escrow. Getting the deal under contract may take some of your own money, but it is completely negotiable. You can give as little as a dollar if the seller will accept that.

4. Find a buyer. Once you have the property under contract, by the way, the longer you have the better. Most contracts will say 30 days but that is negotiable as well. If you can get the seller to sign a contract that give you 45, 60 or even 90 days then the better for you because that is extra time you will have to find a legitimate buyer. Once you have the contract it is time to contact your potential buyers. The best way is to create a simple, clear, informational packet that you can email to all your contacts. By doing this you are saving everyone time and you appear to be more professional. You can also use Craigslist, the newspaper, or any other means to sell the property. Remember if you don't find a buyer or the buyer doesn't close on the property than you will not get paid.

5. Close the deal. Once you find a buyer who will take over the contract, you assign that person the rights to the contract. They are not the legal owners of what the contract offers. Your work isn't done though. You should do everything you can to help the buyer get the information they need to close on the property. Once the deal is closed the title company will get you paid. In post 2 of this series you will learn how you get paid. Just know that the money will come from directly from the title company. As long as the property closes you are guaranteed a check.

Sounds pretty simple, right? Well it is and it isn't. Once you get one done though it will get easier and easier. Pretty soon you will have built up enough capital (money) to start actually buying properties, if you want. I know a girl who is in college right now and made over $200,000 just by wholesaling. She has learned how to do it and so she just keeps on doing it. All it takes is a little desire and know how and you are on your way to make some good money as a beginning investor. Just think how many deals would you need to do to quit your day job? Probably not very many!

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