The real estate industry welcomes and values diverse applicants. No paperwork or applications are required. There will be no in-depth interviews. There is no clock in sight. Zero formal education is expected of applicants. To some extent, that is possible.
The road to Real Estate success is a winding one. Problem-solving is how we learn and grow as professionals. The more problems we find… greater our level of education. As we get more knowledge,… the greater our level of success. When we solve one set of problems, we create new ones. Thus… We progress as a species.
The irony of this whole procedure is… We tend to wait until we face a problem before implementing a remedy. The answers are always in the air…, but we don’t see them since our needs aren’t pressing. When a need or problem arises, we often look far and wide for a solution, even though the answer has been sitting right in front of us the whole time.
A Real Estate Entrepreneur’s development should include profiting from the wholesale Real Estate Market. It answers numerous issues that you may currently or will likely face in the future. It’s a fantastic resource, but most people will never learn about it or, even worse, have no need for it. And everyone can access it. Continue reading to learn how to begin reaping the benefits of this powerful resource instantly.
My preferred wholesale real estate business description is the “Buy Low – Sell Low” market. You go out and acquire (through option, contingent contract, or outright purchase) control of Real Estate (a home) at a price and on terms that increase its value in the eyes of a different investor. This is possible “Buy and Hold” investor… commercial retailing… the Retail and Rehabilitation Industry… rental-purchase companies… or engaged in Wholesale trade.
You’re getting in at the bottom and out at the bottom of the market. Absorbing a new set of skills on the fly. A $500 difference is possible here. $2,000… $10,000… “or more” Not bad, given the speed with which these transactions can be finalized… and usually without risking any of your cash. Our discussion of this topic will continue… First, though, let’s look at something everyone already knows.
The automotive sector is one with which most of us are already familiar. This is a must for us. In most places in the United States, having access to an automobile and the ability to operate one are necessities. Cars generate a lot of revenue. In this sector, you’ll find firms that… dealers in distribution… dealer gangs… etc.
Cars produced by the Manufacturer are all sold at the same price. Distributors purchase vehicles at wholesale prices from the Manufacturer and resell them for a profit. Dealers buy autos from Manufacturers, who then sell them to Retailers, who sell them to Customers.
Everyone knows there must be a profit at each stage of this process… or the whole structure will fall apart. One way of looking at Distributors and Dealers is as Wholesalers. Though on a variety of degrees. The new-car industry is particularly capital-intensive because… This setup is relatively isolated. One can only gain entry by paying for it. Assuming you’re even allowed access.
The rules change slightly when dealing with used automobiles. Starting a used-car dealership doesn’t have to break the bank. A dealer in pre-owned cars sources his stock from numerous suppliers. As an auction buyer, he… He is a buyer of new-car lots of trade-ins. He shops at retail stores like everyone else and purchases from many Used Car Dealers. A remarkable network of wholesale buyers and sellers is the backbone of any thriving used-car dealership. The retail market determines prices at this tier, considering what the final consumer will pay.
It’s been over 30 years since I bought a brand-new car. There are a lot of things about the Used Car Market that I enjoy. To begin, I can save a ton of money by acquiring a gently used car that is just two or three years old but still in excellent condition. As soon as the tailpipe leaves the pavement, every vehicle is technically a used one. Second, working with Used Car Dealers is a pleasure for me. Whenever I make a purchase or a sale, I pick up new information.
Comparing the wholesale of houses to that of automobiles reveals several parallels. It’s true… You could learn a lot if you used these techniques. Moving quickly is the key to success in any wholesale setting. You won’t make as much as you would if you put in the effort… and assume the resulting danger… to distribute your product to stores.
As for wholesale… You must keep in mind… You aren’t aiming for a grand slam. He hits a home run… get on base… Successfully reaching base. Being greedy is not allowed. You must provide the buyer some room to turn a profit. It’s true… maintain a thriving market… Your purchaser needs to turn a profit. You need to be the one who initiates lucrative business deals.
Conversely… whenever you shop… The Seller must also reap some benefits from the transaction. If you shop in bulk… You should always be business-ready. The most significant value you can provide is the absence of worry. Making offers promptly can help you accomplish this goal… Keeping in close contact in a timely fashion… handling the particulars… is drawing to a close! Remember… when acquiring real estate at a wholesale or near-wholesale price… The cost should be of little concern. You need to go above and above for your customers.
1. You are finding more bargains than you can purchase regarding time, energy, or money.
2. You are taking on more commitments than you can handle financially or emotionally.
3. There is no alternative way to maintain your current standard of living without changing jobs.
4. You’re broke, man… or an easily accessible means of financial support.
5. You are interested in Real Estate investing but wish to avoid dealing with tenants.
6. You are on the right track with your acquisition plan, but more cash would be nice.
7. You need to quicken your program of acquisition.
8. You’re thinking about changing your way of life.
9. You are sick and tired of banking issues.
10. You’re sick and weary of constantly needing money.
11. New shoes are needed for the infant.
The Rules Of The Game Are As Follows…
Okay, the phone finally rings. What you’re dealing with is a property seller. You talk to them on the phone to see if it’s worth your time to meet with them, and then you make that decision. At the meeting, they decide to sell you the house at a steep discount in exchange for immediate cash. You pull out your signed copy of your Real Estate Contract (I’ll teach you how to make your own!).
Well… In the same way that you’ve successfully sought out potential Sellers… You’ve also done well in your efforts to find Wholesale Buyers. You have developed connections with other investors who share your interest in off-market home purchases. You have interrogated them on their purchasing standards and turnaround time. The stage is ready.
You decide to make some phone calls. Fast Eddy: “Hey, Joe. I’ve got what you’re looking for… but you’ll have to move fast. When can I show it to you? As soon as possible? Great! I’ll be buying to pick you up in 30 minutes. We can have lunch while we’re out.
Joe is fond of the home. He’s willing to pay $20,000 in cash for it. The purchase price per your agreement is $17,500. Put another way; your gain is $2,500 (revise figures to meet your market). You’ll spend the day off shopping for food and relaxing. Very good!
This is much easier than it sounds. There’s a good chance you know other investors willing to buy. You can trust them because… partners in trade… competitors… confidants… etc. They are either in the process of purchasing… or wish they could afford to acquire.
Please have a chat with them. Learn the needs and wants that drive their purchasing decisions. Just what would they shop for? So, what exactly wouldn’t they spend money on? Is cash payment an option? Do they have a solid network of banking contacts? If they find the right deal, is it possible to close quickly? And now for the most crucial inquiry of all…
Will they fixate on your salary? If you bring them profitable business, of course. Basically… You’re asking people to do business with you. I kid you not… Some people are off-limits for commercial transactions. Find this out ahead of time… and proceed to the next person. Many investors would be grateful for your assistance in finding properties. You should collaborate with these companies.
1. Sign up for a Real Estate Investors Club in your area. A club like this can be found in almost any major city. Seek advice. All the clubs nationwide are listed for free in Creative Real Estate Magazine (call 619-756-1441 for subscription information; annual subscriptions cost $72; ask about discounts). To find local clubs, visit the National Real Estate Investors Association’s website (www.NationalREIA). If your city doesn’t have a group like this… think of starting one. They’re a great way to meet new people and spread the word. This is a beautiful opportunity to meet other investors and learn who you can and cannot do business with.
Advertise in the newspaper. I’m at a loss for words. Why don’t you… Affordable Handyman Services, 969-6969. / Property in need of repair; urgent cash sale; (969) 696-969… or Extremely Discounted, Urgent Sale, Cash Buyers Only, 969-6969. The point is made. Make a newspaper ad that you would answer if you saw it… provided you were looking for a good deal, of course. Leaving town, need to sell quickly, fantastic price (969-6969). Well… You may soon be leaving town. Away from work… If you could find another investor to buy this house from you, you’d make a nice profit.
Find wholesale buyers before you even find a property. Seek potential wholesale buyers immediately. Wholesale is successful because… with reasonable assurance… that a home might be sold quickly even before you commit to buying it. This can be sped up by establishing connections with retailers on a wholesale level.
Once you’ve signed a contract to buy or exercised an option to buy a home, you can… Maintaining your current standing should be your top priority. If you think the Seller is playing poorly, you should… in other words… sell to a third party while your agreement is still active… You may file your official claim with the County Recorder’s Office (or equivalent) in your area.
There are a few approaches to take here… Your agreement could be made a recordable one if… But then everyone would know exactly what conditions you’re buying under. In a negotiation, this could be a deal-breaker. Submitting a Memorandum or Affidavit to Show Possession of a Contract to Buy or Option to Buy… together with the property’s official description… should be sufficient to alert the public of your intent to acquire the land.
This… as a result… invalidates the title for any potential buyers. For the Seller to deliver an excellent and marketable title, some arrangement (payment, perhaps?) would need to be made with you. This self-defense strategy is low-cost and straightforward to use. Don’t forget to sign off with your contact details.
Being forthright and honest is probably your best defense… sincere… maintaining open lines of dialogue with the Vendor… following through on your promises… in a brisk tempo of closure. The longer you stall a deal, the more it will cost you. There is more potential for issues to emerge.
Please don’t think I’m attempting to frighten you. Just thought I’d make sure you were aware of it. This has always worked for me. Try not to worry. (Ouch!) I prefer to work with Sellers who come to me with a problem I can help them with. Which I am grateful to have solved for them. I put faith in my intuition… intuitive response… a great deal. It lacks scientific rigor…
Nevertheless, it serves its purpose. If you have doubts about a transaction… To avoid further conflict, I shift my focus. I don’t want to deal with… as do not you. However, if the potential for gain is high… a sense that something isn’t quite right… Keep your ground… also, hurry up!
Okay, now is the time to use your transaction engineering expertise. Suppose you’ve followed all the rules and done everything right. We have located a willing vendor… achieved an agreement on the price and terms of the purchase… put it on a Purchase Agreement. Found a Distributor… reach an agreement… then it’s time to wrap things up. Do what?
It is crucial at this stage to deal with an experienced Closing Attorney or Escrow Company. But I’m jumping the gun here. Let’s start by considering our choices.
First, you might allow your wholesale buyer to take over the contract’s closing. Pay somebody to take your place, and they will. In principle… So far, so good. But… There will be some degree of freedom surrendered on your part. Just not my cup of tea… but a practical substitute.
Second, you could fulfill the contract terms and… …and in the distant future… finalize a deal with a wholesale customer. Closing skills are necessary for this. But… If you lack the financial means to end… It’s now impossible to do so. This is a last resort that I will employ solely if the resale cannot be completed on time… plus I’m not opposed to being the property’s owner. Still… not my preferred approach.
Third, you might complete the acquisition and sale at the same time. Several approaches exist for accomplishing this. Closing with the Seller is possible…, then, with the purchaser. There are two last remarks… Two actions. You might also start with the Buyer’s closing. The Seller could issue a deed to the Buyer without going through you. Therefore, avoiding the title chain… and two final remarks… a letter from the vendor to the buyer… as well as one from you to the purchaser. One option is to seat everyone at the same table. Perhaps you might put physical distance or time between them.
Choice 3 appeals to me because it eliminates my need to close. There is no need for me to dip into my savings. Why should I, anyway? It’s a waste of time since the Buyer must nonetheless secure finance. I’m a fan of the “direct deed” method. You are not needed at all in the line of succession. Liability issues are inevitable. , especially since it’s not required. Many deals I’ve closed have occurred between face-to-face parties, such as the Seller and the ultimate Buyer. However, I like to keep them apart for the most part.
In all honesty, the situation is… No one needed to be present. The postal service may handle this… with the closing attorney receiving all paperwork and remitting cash. You need to take charge and steer this operation. Use whichever method you find satisfactory. Employing a competent Closing Attorney or Escrow Agent will significantly increase the likelihood of a smooth transaction.
Add wholesaling to your current business model. Do not be avaricious. Maintain a constant effort to find new Wholesale Buyers. Don’t waste your time trying to do business with a loser. Make it a place where money can be made. Don’t let a shortage of funds prevent you from trying your luck. It is not necessary to play. Find a Closing Attorney or Escrow Company that can handle several closings without causing you any unnecessary headaches. Don’t go for the jugular with every business transaction. Attempt to get on base.
And… Always be very transparent about your intent to profit from the deal. This is essential information for the Seller to have upfront. This is of the utmost significance!
The wholesale trade is a lucrative one. If you need money fast, this is a fantastic option. And the best part is… Everyone has access to it.
For over 27 years, Scott Britton has been a successful buyer, seller, and investor in single-family homes. Visit this link for a free copy of our extensive Real Estate Investors’ Resource Guide.
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