Category: Wholesale

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Wholesale Wholesaling

Every Wholesaler’s Ultimate Guide to Driving for Dollars

Man driving.
Source: Why Keifrom Unsplash.

You know that boarded-up, overgrown property you drive by every day? Other wholesalers see those, buy them for a low price, and sell it at a higher price point to investors willing to fix the property up. You can do the same—the scouting method called Driving for Dollars.

Scour the streets from behind the wheel of your car, and seek out hidden opportunities in real estate! In this article, we’ll look at why driving for dollars is a good wholesaling strategy, how it works, plus tips on how to make your driving for dollars an organized process.

What is Driving for Dollars?

Real estate wholesalers who drive for dollars comb through neighborhoods looking for distressed or neglected properties from the back of their steering wheel. Once they see a potential property, they’ll cold-contact the owner to see if they’re willing to sell (i.e., a motivated seller). If the owner’s willing to sell, the wholesaler puts them under contract and then finds  an investor to purchase and rehabilitate the property.

The driving for dollars strategy is an excellent, no-brainer way for wholesalers to seek out potential properties and seal more deals. With a watchful eye and a bit of savvy, you could uncover hidden gems and pocket some serious profits by, very simply, driving around.

What Should You Look Out for While Driving Around?

Driving for dollars focuses on distressed homes that present the possibility to be sold under market value. But, what does “distressed” actually mean? Here are the 3 criteria that qualify a property as such:

#1 Physical Damage

Physical house damage represents the most important kind of distress that you’ll look for. While you’re driving around the neighborhood, look for obvious signs that the property is run-down in any way, like:

  • Broken windows
  • Boarded-up doors and windows
  • Damaged driveways
  • Damaged roof
  • Messy garden or yard

Clear signs of distress qualify a property for your list of potential properties to wholesale. Take notes and photos (if appropriate) of these signs so you can look back at them when you need to.

#2 Outdated Design

A house may be outdated if the interior or exterior design isn’t aligned with the current trends. Outdated designs can range from something simple like unpopular wall colors, unmentionable carpet in the kitchen or laundry space, or seriously unsightly popcorn ceilings that have to be removed for health reasons.

For interior designs, you’ll have to ask for permission from the owner to enter the premises. Once you get in, it’s as simple as keeping an eye out for outdated details.

#3 Owner’s Situation

An owner’s financial or other life situation might be a distressing issue that motivates them to sell an inhabited or uninhabited run-down property for below market value. The owner’s situation might not be something you can quickly see on a drive-by, so make note of physical signs of property distress first and use them as clues to learn more about the owner’s situation.

For example, if the house is a rental property, the owner might not live in it and could be too busy to deal with maintenance. They might want to avoid going through the hassle of selling the property and wholesaling could be an easy solution to get rid of it for quick cash.

Want to Make Driving for Dollars a Lot Easier?

Driving for dollars is a great way for beginner wholesalers and experts alike to invest in the market, but it takes time and patience. It can be difficult to keep track of every street you’ve driven on and every house you’ve seen.

Several apps designed to guide and organize driving for dollars are available on the market—the most notable of which is called PropStream.

The PropStream driving for dollars app is designed to make driving for dollars a straightforward process. The app’s features narrow your search according to your preferred filters to save you time on your drive.

PropStream driving for dollars app provides: 

  • Property results up to 50 miles away: Filters for specific property criteria
  • Filtered property information: Narrows your search by lot size, year built, home features
  • Multiple Listing Service (MLS) statuses: Tells whether the property is on or off the market, for how many days it’s been listed or off-market, and if the listing is below the market price
  • Pre-foreclosure or bank-owned: Removes properties listed as pre-foreclosure or owned by a bank, whether you’re interested in that or not

If you want a more flexible drive looking for distressed or vacant homes, another PropStream feature, “just drive,” gives real-time and recordable route directions. You can even tap on properties around you to see the property’s detail and save the listing for future reference.

Overall, PropStream helps you keep your freestyle property searches organized.

Drive for Dollars, Find the Right Property, and Profit

Driving for Dollars is undoubtedly a valuable skill to add to your real estate wholesaling repertoire. Whether you’re looking to make some quick cash or engage in some long-term projects, the effort that goes into driving for dollars can yield great rewards.

If you’re dedicated and have a sharp eye for detail, you’ll properly assess potential properties to wholesale and identify deals that fit your criteria. So get out there, keep that eagle eye on the street, and you’ll land a lucrative deal before you know it.

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Wholesale Wholesaling

Which Comes First in Wholesaling: Cash Buyer or Property?

Source: Scott Graham from Unsplash.

Wholesaling can be challenging, but you’ll close deal after deal if you have the right approach.

You might be wondering, though, should I prioritize getting cash buyers or finding a property first?

On the one hand, if you have cash buyers first, then you already have potential clients lined up to buy your property.

On the other hand, if you have a property to sell, then you’re left with just finding the right buyer to close the deal.

Is one better than the other? Let’s consider both sides.

What Happens When You Get a Cash Buyer First?

Believe it or not, finding cash buyers in your area is easier than you think, because there are a lot of sources that teach you how to do it.

The plus side of focusing on building your buyer list first is that, when you have a cash buyer first, you now have a guide on what kind of property you are looking for. Ask what your buyer is looking for, their purpose, price range, etc.

After interviewing your client, this will help narrow your search criteria. You know where to look and if you should scout for a commercial space or a residential unit. When you get back to your client to pitch a potential property, you have more chances of closing a deal, since you already know what they want.

Having a buyer first is also an advantage because you can ideally close quickly once you find the right deal. And the quicker you can close deals, the more deals you can do (read: the more money you can earn) each year.

What Happens When You Get Property First?

It’s easy to find buyers if you’ve found a great deal. Nobody declines an excellent real estate investment opportunity, after all. You only have to get the property under contract and you’re free to market or sell it to any of the potential buyers in your list.

That being said, here are few marketplaces and strategies you can pursue to find great properties:

  • Attend REIA Meetings: REIA stands for Real Estate Investors Association, where investors support and help each other via group and individual meetings. These meetings offer information, ideas, and networking within the industry. For example, this blog you’re reading is from REIA of Oakland, where we help anybody who’s interested in investing in Oakland County.
  • Online Paid Ads: There are 5.16 billion and 4.76 billion internet and social media users worldwide, respectively, which means using digital ads opens the door to better reach. Connect with your target audience through paid ads. You can set up ads through social media or Google.
  • Online Marketplaces: Facebook marketplace and eBay are great examples where you can list your property online. Although, you have to make sure that you do your research to ensure that you don’t violate any real estate policies on the platform.

Some people say print ads are still relevant. But we beg to differ. It’s a complete waste of time if you ask us, even if 82% of consumers trust print ads when making purchase decisions—in reality, nobody pays any attention to them, especially for major purchase decisions like real estate.

Newsflash: It Doesn’t Matter Which Comes First

I hate to break it to you, but ultimately, it doesn’t matter which you start with. Because finding good deals and serious buyers are the two biggest challenges of wholesaling real estate in general. Neither one is easy, and both are essential.

It takes time and experience to find good deals on the market. So what you really have to do is build your property portfolio and cash buyer list at the same time. Once you’ve mastered the art of finding good deals and have a broad network of cash-in-hand buyers, the rest will be relatively smooth sailing.

Do you agree that finding a good deal is the real challenge? Or do you think building a buyer list is tougher? Let us know in the comments below. And don’t forget to sign up as a member, so you can attend our upcoming meetings for more tips on real estate investing.

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Wholesale Wholesaling

Real Estate Wholesaling Contracts: What Should You Include to Guarantee Success?

Source: Photo by Romain Dancre from Unsplash.

The Wholesaling Contract is the bread and butter of real estate investment, and key clauses can make or break the deal.

Some key clauses in the contract serve as pillars that ensure the document is airtight and that you’re protected against sale issues—without these key phrases, the whole sales cycle could be ruined, and famed returns could be lost.

Whether it’s your first time handling a real estate deal or you’re looking to improve your current system, this article is for you. Here are the key elements real estate investors should include in their wholesale contracts for a successful real estate deal.

What You Should Include in a Wholesaling Real Estate Contract

A Wholesaling Real Estate Contract is a legally binding agreement that sets the terms of the sale between the wholesaler (that’s you, a sort of middle person) and the seller. Having a written understanding between parties helps avoid any disputes and misunderstandings.

There are two critical parts to a wholesaling contract: the assignment contract and the purchase agreement. Here are the roles they play and what you, the wholesaler, should include in each section:

Part 1: Wholesale Real Estate Assignment Contract

The Wholesale Real Estate Assignment Contract is the first part of the Wholesaling Real Estate Contract. It transfers your right to purchase a property to potential buyers. Once you and the seller enter an equitable conversion, you’ll draft an Assignment of Real Estate Purchase and Sale Agreement.

The Assignment of Real Estate Purchase and Sale Agreement is an assignment of ownership from the seller to the home buyer and outlines that the new buyer assumes ownership of the home and absorbs all responsibilities. The agreement should contain a copy of the original purchase and sale agreement you had with the seller and outline all the terms, conditions, contingencies, prices, payment terms, and stipulations involved in the transaction.

When this first part of the agreement is signed, the wholesaler typically gets a portion of the wholesaling profit as a deposit. So, only after closing the deal will you receive the remaining balance.

Part 2: Wholesale Real Estate Purchase Agreement

Now, the second part is the Wholesale Real Estate Purchase Agreement. The document is built of several moving parts, but don’t let that scare you—the Wholesale Real Estate Purchase Agreement’s purpose is housed in the basic information. Here are the crucial clauses you should focus on:

  • Who’s involved? List your name and the seller’s and buyer’s names.
  • What’s the asset? Give a description and address of the real estate being sold and purchased.
  • What’s the deed type? Specify the type of deed that comes with the real estate sale.
  • What’s the condition of the property? List the condition of the premises, including the physical state of the structure, existing damages, and areas that need repairs.
  • What’s the purchase price and financing? Record the agreed-upon price and financing terms, including where the deposits will be held.
  • When’s the closing date? Write the date when the real estate transaction is finalized.
  • What happens when the buyer can’t purchase? Include a financing contingency for the buyer to back out if they aren’t buying in cash and can’t obtain the required financing.
  • What happens when the buyer doesn’t like the property? Include an inspection contingency for the buyer to cancel if they’re not satisfied with the results of a property inspection.
  • What happens when the buyer can’t get title insurance? Include a marketable title option so the deal can be called off if the buyer cannot obtain title insurance.
  • What happens if someone breaches an agreement? Include buyer and seller default clauses that detail what happens if one of them defaults on the sales contract.
  • What happens if the real estate gets damaged before closing? Include a clause for risk of loss and damage to protect the buyer if the property is damaged while under contract.
  • What are the additional charges? Include accounts for utilities, property taxes, and other additional charges required by the state.
  • What property details should be disclosed? Disclose any information that challenges state and local laws or that you otherwise feel could be misunderstood. For example, if the property has lead-based paint, you can make a statement about it in the contract.
  • What are the legalities? Include the standard addenda or legal language at the end of the contract, and mention any additional agreements made after the initial signing.

Clauses and protections help to shield you from liability. Moreover, understanding what each clause means before signing off prepares you for any contingencies that may arise in the deal down the line, helps establish trust among parties, and improves your wholesaling reputation.

Of course, there are plenty of contracts that you can download online. But they aren’t foolproof—not until you’ve got a trusted real estate attorney to double-check them for you. Your contract must guarantee you’ll get what you expect from the deal without stepping on anybody’s toes.

Wholesale Contract: The Key Elements Unlock Success

By understanding the role of the Wholesale Contract and its key elements, you can protect yourself and ensure a smooth transaction for all parties involved. And, if you’re not sure where to start, we can help.

Join as a member today , and we’ll ensure you receive an invitation to our next meeting to learn more about wholesaling from us directly. And in the meantime, sign up for our newsletter to stay updated on everything happening in the world of real estate investing. See you soon!

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Wholesale Wholesaling

How and Why You Should Set Up Recurring Rent Payments for Your Tenants

Source: Photo by Mika Baumeister on Unsplash.

Collecting rent can be one of the biggest hassles of owning rental property. Not only do you have to keep track of when rent is due, but you also have to chase down tenants who are late on their payments.

Wouldn’t it be nice if there was an easier way to collect rent? Well, there is.

You can set up recurring rent payments so that your tenants’ rent is automatically deducted from their bank account each month. Not only does this make things more convenient for both you and your tenant, but it can also help ensure that you always get paid on time.

In this blog post, we’ll explain how to set up recurring rent payments and the benefits of doing so. By the end, we hope you’ll see just how easy and helpful an automatic rent payment system can be.

Why Set Up Recurring Rent Payments

As a landlord, having a reliable, predictable source of income is essential. That’s why automating recurring rent payments can be so beneficial. Here are a couple of benefits:

  • On-time payments: Your tenants will have their rent deducted from their bank account automatically each month. This means that you won’t have to worry about chasing them down for late payments or collecting checks in person.
  • Electronic processing: All payments are made electronically and on the same day each month, saving you the hassle of manually entering tenant information into your accounting software. Most systems can handle automatic payments for you with just a few clicks.
  • Incentivize recurring payments to encourage sign-up: Some payment processing providers include a discount function so you can offer incentives to your tenants for signing up for recurring payments. This can be a great way to encourage more people to use the system, making rent collection easier for you.

Protect your cash flow, and you’ll protect your investments—isn’t that the only thing that matters?

How to Set Up Recurring Rent Payments

Setting up recurring rent payments is relatively easy, and it’s worth taking the time to do so. Here are the steps you’ll need to follow:

  1. Choose a payment processing provider: Decide which payment processor you’d like to use. Some popular options include PayPal, Stripe, Square, and Apple Pay. Each company has its own set of fees and features, so take some time to compare them before making your decision.
  2. Set up an account: Create an account and link it to your bank. This will allow payments to be transferred directly into your account on the rent due date.
  3. Collect tenant information: Collect some basic information from your tenants, such as their name, address, bank details, and rent payment amount. Ensure that all information is accurate and updated before proceeding with the setup process.
  4. Set up automatic payments: Set up the automatic payments for each tenant in your system. This typically involves entering their bank details and setting the payment amount and frequency (e.g., monthly).

Once you’ve completed these four steps, you’re good to go. Sit back and wait for the payments to come flowing in. Your well-deserved cash flow is on its way.

Best Tools for Recurring Rent Payments

We recommend the following payment processing providers for their ease of use and excellent security:

  • Avail: This landlord software is owned by Realtor.com and helps you streamline rent collection (even if you don’t work with a property manager). Avail allows upcoming payment scheduling by automatically reminding tenants before the due date. Tenants who split the rent with their roommates can also divide the bill accordingly.
  • Apartments.com: Previously known as Cozy, this tool automates rent collection and monitors all rental payments from one dashboard. You’ll see everything in one glance. The platform also sends reminders to tenants, just like Avail.
  • Buildium: If you have 50 or more properties in your rental portfolio, Buildium is your best bet. The software can set up recurring and one-time payments for tenants to pay online or offline, where the funds are transferred in a few minutes instead of a few days.

There are others, too, like Zillow Rental Manager, Rentec Direct, TurboTenant, PayRent, and ClearNow. Whichever platform you choose, you can rest assured that rent collection will take care of itself.

Automatic Payments, Automatic Cash Flow

Setting up recurring rent payments is an easy way to make collecting rent more convenient for both the landlord and the tenant. Not only does it help ensure that your rental income is always on time, but it can also save you time and money in the long run.

We hope this blog gives you a better understanding of how to set up recurring rent payments and why it’s a good idea to do so.

If you have any questions or need help getting started, join us as a REIA member today[1]  and attend our upcoming meeting[2] ! We also have a newsletter[3] , so you’re never out of the loop.

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Wholesale Wholesaling

Pro Tips on How to Wholesale Real Estate in an Uncertain Market

Source: Usman Yousaf on Unsplash

Every real estate investor knows how volatile the market can be. It’s not as crazy as stocks or crypto, but the real estate investment environment isn’t completely protected against shifts.

For example, the International Monetary Fund recently announced that they’ll be more aggressive on funding now. So, combined with the uncertainty we see in the economy, bond yields increased, directly correlating to a rise in mortgage rates for the real estate market.

But even with things like this, you can still invest in real estate and come out victorious.

How? Well, try wholesaling properties.

Real estate wholesaling is finding a deeply discounted property and then selling it to another investor, usually for a quick profit. And since you’re not the one who’ll fix it up or hold on to it for the long term, you don’t need to worry about market conditions as much.

Of course, wholesaling has its challenges in an uncertain market. But knowledgeable wholesale real estate investors deviate them easily—simply as they know how to play the game. Read on to know!

1. Increase Your Lead Conversion Rate

Finding motivated sellers is key to a real estate wholesaling business. You must constantly find people who need to sell their properties fast (usually because they’re facing foreclosure or divorce), as they present an opportunity for you to swoop in and make an offer.

In an uncertain market, looking for motivated sellers should be easy, as more people want to sell their homes quickly to free up cash. You can find them by networking with real estate professionals, driving around neighborhoods with distressed properties, and more.

But it’s not just about finding motivated sellers; it’s also about increasing your conversion rate:

Number of deals closed / Total number of motivated sellers = Conversion rate

The higher your conversion rate, the better you can weather any uncertain market storms. You already spend so much time and money on marketing and generating leads; you’ll do yourself a favor by optimizing your closing process to convert more leads into closed deals.

Continue to find motivated sellers, and improve your chances of closing deals with them.

2. Get Your Financing in Order

If you’re going to wholesale real estate, you need to have your financing in order before you start looking for properties. Getting your ducks in a line is important because, most of the time, the properties you’ll find will require some form of creative financing, like using:

  • Hard money loans: Loans based on property’s value instead of the borrower’s creditworthiness
  • Private money loans: Loans from private investors if you can’t qualify for traditional financing
  • Partner with another investor: Pooling resources together with a partner to finance a property

If you don’t have your financing set up beforehand, it’ll be hard to take advantage of these opportunities when they come up, especially when dealing with uncertain market conditions simultaneously.

For example, if the market crashes and you’re trying to get a loan from a bank, they’ll be much more hesitant to give you the money. Whereas if you have a hard money lender lined up, they’ll be much more willing to finance your deal.

3. Know Your Numbers

In an uncertain market where things can change rapidly, you need to be extra conscious of unnecessary business costs harming your cash flow. Are you spending too much on lead generation? Can you do without the tech subscriptions? Have an honest conversation on how you can keep expenses down to protect your cash flow in an unstable market.

Moreover, know your numbers well enough to make quick and sure deals without costing you dearly. Things like being clear on your maximum offer price, estimated repairs, and expected profit margin all play into the success of your wholesaling investment opportunities.

Say the market crashes and property values drop significantly—you’ll find yourself in a situation where the property is worth less than what you paid, depleting your chances of any profit margin. Only by knowing your numbers well can you adjust accordingly and still come out ahead.

4. Have a Plan B

Having a plan B when wholesaling real estate is always a good idea. And in an uncertain market, that truth is all the more true, where things might change quicker than you expect. There’s always the possibility that something could go wrong, whether it’s the deal falling through, the market taking a turn for the worse, property values dropping significantly, or all of the above.

So, what should your Plan B be? Well, that depends on your situation.

But some things you might want to consider include: having another property lined up to sell, having extra cash on hand in case of emergency, being able to lower your prices to sell, or partnering with another investor to share the risk. The bottom line is to be prepared for the worst, while expecting the best.

Being Certainly Profitable in Wholesale Real Estate Investing

By following the tips we’ve outlined in this article, you can ensure that your business is as resilient as possible to market fluctuations. So whether you’re a seasoned investor or just starting, remember to increase your lead conversion rate, get your finances in order, know your numbers, and have a plan B.

With these strategies, you’ll weather any storm and continue making money by wholesaling.

Do you need more help? Then, get a membership, subscribe to our newsletter, and join our upcoming meeting! We’ll discuss key industry trends and expert tips—you wouldn’t want to miss out.

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Wholesale Wholesaling

What Happens After Getting A Property Under a Wholesale Contract?

Source: Photo by Gabrielle Henderson on Unsplash

Real estate wholesaling is all about finding bargain-priced properties, getting them under contract and reselling them to investors or other interested buyers.

The main difference between a regular purchase contract and a wholesale contract, is that the wholesale contract allows the wholesaler to sell the contract to another buyer before actually owning the property. Theoretically, this allows the wholesaler to have little to no money to wholesale properties.

But what happens after you get a wholesaling contract signed? You still have a few steps to go before getting paid, so let’s go through them.

1. Send the Contract to the Title

You’ll need to send that contract to your title company to keep them in the loop. If you don’t know any companies, just search for one online and ask them to see if they work with wholesale investors like you to handle assignments.

Once you find the ideal title company, email the contract to them along with the seller’s contact details to collect any additional information they need. Next, you’ll have to coordinate with the title company to get your earnest money to them—often around $100 or more, depending on how good the wholesaling deal is—via mail, drop off, or courier delivery.

2. Take Photos and Videos of the Property

Next, you’re going to reach out to the seller and schedule a day for you to document the home. This task is often done when you meet the seller at the property to negotiate and sign the contract.

If the seller is hestiatent, assure them that you’re only doing so to have records of the property and so you can show the home to prospective buyers.

You have to take photos of every room, the front of the house from the streets, the backyard, the kitchen, the bathrooms, the HVAC unit, the electrical box, and even the roof if you can raise the camera high enough. The more photos you have, the more information you can provide your buyers.

Also, tell the seller that you’ll return with a contractor, so you can get a bid right away to start construction and renovations on the day you close immediately—time is money in the real estate game.

3. Send the Deal Out and Find Buyers

Now that you have the contract and photos, send the deal out to find cash buyers.

You can email blast with the likes of MailChimp, or manually go through your buyers’ list to find potential individuals for the specific property. You can also reach out to other wholesalers to see if they have any buyers that might be interested or go through real estate Facebook groups to find more prospects.

As you find buyers, ensure that you provide them with the asking price, after repair value (ARV), estimated repair cost (ERC), lot and living square footage, link to photos and videos, and a way to submit their offer. Once buyers start reaching out, proceed to vet your buyers.

4. Vet the Buyer and Walk Them Through the Property

You must ensure that buyers are legit and won’t waste your time. You can ask for the last three or five properties they’ve flipped. Ask for the addresses, look at the tax records, and check if their name or their LLC was on that property. That way, you know that they flip properties.

Then, get the buyer to sign and send the assignment to the title company. Ensure that the buyer will also deposit $500 (or any other amount) in earnest money.

We suggest you collect the earnest money before they check out the property so you have some leverage in the deal and lessen the chances of them backing out. However, this isn’t always possible and may only work if the buyer already trusts you as a wholesaler.

Once that’s done, you’ll have a buyer locked into the deal. Of course, you’ll need to ensure that they have the funds to purchase. So we recommend that you get in touch with fellow wholesalers, check their backgrounds, and directly ask them to know their situation.

5. Wait for the Deal to Close

Here comes the easy part: Waiting for the deal to close.

Stay in touch with both the seller, the buyer, and the title company to assure all parties that everything is going smoothly. If anybody needs anything, you’ll also be able to get them the information right away. You’ll also have to connect the buyer to the title company so they can set up the closing process.

Now, if the buyer ghosts you and becomes unresponsive (or takes too long to deposit the money),  then you’ve got a problem. We suggest that you move on and find a new buyer, because they might waste your time and give you the runaround, killing time and the deal in the process. You only have a certain amount of time to get the property sold—exit before it’s too late.

Keep Moving Forward, Keep Closing Deals

Ultimately, your goal as a real estate wholesaler is to find a property, vet the buyer, and sell the deal. The process we’ve outlined should give you a good idea of how to go about doing that.

Of course, there will be bumps in the road. But if you have a solid system in place, you’ll overcome them easily. Also keep in mind that this is a fast paced business, so it’s important to always be moving forward.

Don’t hesitate to join as a REIA member today! We have regular meetings and newsletter publications to give you all the help you need to become a successful real estate wholesaler today.

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Wholesale Wholesaling

6 Tips on How to Wholesale Real Estate in a Recession

Source: Usman Yousaf on Unsplash

Real estate investors are now finding out that sales prices and rents don’t always go up. It’s not as unstable as blockchain, the metaverse or crypto—but the real estate investment world isn’t completely protected against economic shifts.

The Federal Reserve is expected to continue to raise its overnight rate until inflation is brought back to acceptable amounts. These increases have a negative impact on bond prices, including mortgage-backed securities, which has caused mortgage rates to spike.

Of course, wholesaling has its challenges in an uncertain market.

That being said, knowledgeable wholesale real estate investors navigate them easily—simply because they know how to play the game. So, here are our 6 tips for experienced wholesalers and new ones alike to keep in mind.

1. Increase Your Lead Conversion Rate

Finding motivated sellers is key to a real estate wholesaling business. You have to constantly find people who need to sell their properties fast (usually because they’re facing foreclosure or have inherited a property they don’t want to maintain), because they present an opportunity for you to swoop in and make an offer.

In an uncertain market, finding motivated sellers should be easy, as more people looking to sell won’t be able to find buyers. You can find them by networking with real estate professionals, driving around neighborhoods to search for distressed properties, and more.

But it’s not just about finding motivated sellers; it’s also about increasing your conversion rate:

Number of deals closed / Total number of motivated sellers = Conversion rate

The higher your conversion rate, the better you can weather any uncertain market storms. So, it may be time to cut your marketing budget or at the very least, refocus it on the most motivated sellers. Continue to find motivated sellers, and improve your chances of closing deals with them.

2. Focus on Landlords

Typically when it comes to wholesaling, you’ve probably been selling most of your deals to house flippers. Well, they’re going to have challenges selling in a recession, so they won’t be buying as much from you. Luckily there is another market out there you can target. Landlords.

S, instead of selling to house flippers, you can replace them with landlords.

Now, remember if you’re selling to a landlord means that you’re selling to another investor. In other words, you’re going to have to be savvier and convince that you’re a reputable wholesaler.

3. Know Your Clients’ Numbers

Many wholesalers don’t care about how their clients run their numbers, but that’s a rookie mistake. Because when you think about it, helping their business succeed is just as important as making your own real estate wholesaling business succeed.

So, to stand out from the competition you need to start taking note of your client’s numbers—not just your own. Helping your clients by providing more services is how you stand out and attract new clients. That way, you’ll have a much stronger relationship with them.

4. Have a Plan B

Next, you may want to either consider doing some flips yourself or becoming a landlord. For that, you’ll need to sort your financing, look into flipper insurance, and a lot more depending on how you pivot your business model.

There’s always the possibility that something could go wrong, whether it’s:

  • The deal falls through
  • The market is taking a turn for the worse
  • Property values are dropping significantly

Or a combination of all of those factors. So, make sure you have another plan when wholesaling doesn’t work out.

5. Get Your Financing in Order

If you’re going to wholesale real estate, you need to have your financing in order before you start looking for properties. Getting your ducks in a row is important because, most of the time, the properties you’ll find will require some form of creative financing, like using:

  • Hard money loans: Loans based on property’s value instead of the borrower’s creditworthiness
  • Private money loans: Loans from private investors if you can’t qualify for traditional financing
  • Partner with another investor: Pooling resources together with a partner to finance a property

If you don’t have your financing set up beforehand, it’ll be hard to take advantage of these opportunities when they come up, especially when dealing with uncertain market conditions simultaneously.

For example, if the market crashes and you’re trying to get a loan from a bank, they’ll be much more hesitant to give you the money. Whereas if you have a hard money lender lined up, they’ll be much more willing to finance your deal.

6. Know Your Numbers

In an uncertain market where things can change rapidly, you need to be extra conscious of unnecessary business costs harming your cash flow. Are you spending too much on lead generation? Can you do without the tech subscriptions? Have an honest conversation on how you can keep expenses down to protect your cash flow in an unstable market.

Moreover, know your numbers well enough to make quick and sure deals without costing you dearly. Things like being clear on your maximum offer price, estimated repairs, and expected profit margin all play into the success of your wholesaling investment opportunities.

Say the market crashes and property values drop significantly—you’ll find yourself in a situation where the property is worth less than what you paid, depleting your chances of any profit margin. Only by knowing your numbers well can you adjust accordingly and still come out ahead.

Being Certainly Profitable in Wholesale Real Estate Investing

By following the tips we’ve outlined in this article, you can ensure that your business is as resilient as possible to market fluctuations. So whether you’re a seasoned investor or just starting, remember to increase your lead conversion rate, get your finances in order, know your numbers, and have a plan B.

With these strategies, you’ll weather any storm and continue making money by wholesaling.

Do you need more help? Then, get a membership, subscribe to our newsletter, and join our upcoming meeting! We’ll discuss key industry trends and expert tips—you wouldn’t want to miss out.

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Wholesale Wholesaling

How Much Should Real Estate Wholesalers Offer on a House?

Source: Photo by Medienstürmer on Unsplash

As a real estate wholesaler, you always look for the best deals to offer your clients. But how do you know how much to offer on a wholesaling agreement? And what factors should you take into account when negotiating with the motivated seller before they lose interest?

Let’s discuss what you should consider when deciding how much to offer on a property.

Cost Considerations for Real Estate Wholesalers

In general, wholesale real estate investors should aim to offer around 50-70% of the property’s “After Repair Value” (ARV). By doing so, you leave room for them to make a decent profit after necessary repairs and improvements.

However, you also have to consider:

  • The market conditions in your area
  • The condition of the property
  • Your own investment goals and objectives

The costs of repairs and improvements can vary widely depending on the scope of work required. In some cases, getting away with a lower offer may be possible if you are confident that you can complete the repairs yourself at a low cost. Conversely, if the property requires significant work, you may need to increase your offer accordingly.

Ultimately, the amount you offer on a property will come down to your risk tolerance and goals.

For example, if you’re looking to make a quick profit, you may need to offer less than 50% of the ARV. However, if you’re willing to take on more risk (and potentially hold the property for a more extended period), you can offer a bit less. It’s up to you to decide what works best for your business.

4 Tips on Wholesale Real Estate Investing

To wholesale a house, you need to find a property worth more than what you offer to pay for it. Here are 4 tips to go about wholesale real estate investing:

  1. Do your research. As we mentioned, it’s essential to know the local market conditions and the estimated ARV of the property before making an offer. This will give you a good starting point for negotiation with the motivated seller.
  2. Don’t get emotionally attached. It can be easy to get emotionally attached to a property, especially if it’s your first deal. However, it’s important to remember that this is a business transaction and you should approach it as such.
  3. Know your numbers. To make a smart offer, you must know your numbers. Have a clear understanding of the estimated costs of repairs and improvements, as well as your expected return on investment (ROI). Once you have all of this information, you can start to play around with different offer prices until you find one that makes sense for your business.
  4. Be prepared to walk away. If the sellers are not willing to budge on price, be prepared to walk away from the deal. There’s no point in overpaying for a property, even if it started as a potential opportunity to reap great returns.

Making an offer on a house can be a tricky business, but if you follow these tips, you should be able to negotiate a fair price that works for both parties involved.

Offer the Right Price for the Right Real Estate Wholesaling Business

When wholesaling a house, it’s key to find the balance between offering too much and not enough. You want to make sure that you are making a profit on the property, but you also don’t want to scare off potential sellers with an unreasonably high offer. By doing your research and understanding the market conditions in your area, you should be able to come up with a fair offer that leaves everyone happy.

Become a REIA member today! Join our upcoming meeting and sign up to our newsletter to stay ahead of the real estate wholesaling game in your area. Equip yourself with the knowledge that’ll bring you to wholesaling success—one property at a time.

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Wholesale Wholesaling

Wholesaling Tips: How to Wholesale Empty Land Instead of Houses

Vacant land in Downtown Detroit
Source: Zillow

Empty land is a valuable commodity. In some parts of the country, it’s worth more than homes—simply because there’s always a market for land for building a new structure or something else.

It’s also easier for wholesalers to find buyers for vacant land than for houses, as there is less competition in the market for land deals. As a result, you’ll find better deals on properties ripe for development than those with established homes.

So, if you want to learn how to get into this small real estate niche, we’ve got tips to get you started in the wholesaling process.

5 Steps to Wholesale Empty Lots

We’ve all seen those empty gravel lots in our neighborhood. But now, you’ll see them as more than just a pile of dirt. Instead, they’re an opportunity. While the land is valuable everywhere‌, some lots are worth more than others—highly sought after by the buyers you want to attract.

So, here are 5 ways you can start wholesaling land:

1. Look for Developing Areas

Look for areas that are being developed or zoned for development, as it’ll give you a good sign of where the market will move to in the coming years.

You can attend city council meetings to get a sense of which areas are being approved for rezoning or development variances. Search online for local land auctions—being good indicators of where the market is moving, and scan MLS listings for “raw land” or “vacant land” to identify hotspots.

2. Research the Title and Zoning

Do your due diligence when researching a piece of property. Check the title to see if there are any liens or encumbrances, and ensure that the property is zoned for the type of development your buyers have in mind. It’s also essential to determine if easements or rights-of-way could affect your prospective buyer’s development plans.

3. Get a Professional Opinion

Before making an offer on a piece of property, it’s always a good idea to get a professional opinion. Have a real estate attorney look over the contract, and have a land surveyor assess the property to determine its potential uses. You can also use the information to market the land to potential buyers.

4. Make an Offer

Once you’ve decided that a piece of property is a good fit for your portfolio, it’s time to make an offer. When making an offer on vacant land, it’s important to be realistic about the value of the property and the costs of development.

Remember: It may take longer to sell vacant land than it would to sell a finished home in some areas, so you’ll need to take the additional waiting time into account.

5. Close the Deal

With a buyer now confirmed, close the deal using a professional team to help with the process. Ensure that all the necessary inspections have been conducted and that the property is free of any environmental hazards, secure the appropriate permits for development from the local municipality, and verify that the title is clear and there are no outstanding liens or encumbrances on the property.

Turn Empty Lots into Enticing Deals

Next time you walk by an empty lot, remember that it’s more valuable than you think. By following these steps, you can successfully wholesale vacant lots in no time. Just remember to be patient, do your research, and work with a professional team to get the best results.

Want more real estate advice?

Join REIA as a member today! Or attend our next meeting so you don’t miss any important information—just like this article. If you don’t have the time to spare, sign up for our newsletter instead to get content delivered right to your email address.

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Wholesale

How to Get Your First Wholesale Deal in 30 Days

Man handing keys and a toy home to another person
Source: Fortune Builders

Are you interested in real estate wholesaling? Great!

But are you ready to start now?

Many would-be real estate wholesalers are afraid of the risks that this industry is notorious for. After all, who would want to pour their time, money, and effort into a project that’ll take months or even years to see returns?

Well, you’ve come to the right place because, in this article, we’ll walk you through the whole process of how to get your first wholesale deal in just 30 days. From finding the property to negotiating its price and closing the sale, we’ll give you the exact steps you need to take so you don’t waste any time committing rookie mistakes.

Ready? Let’s dive in!

1. Find a Property: 8 Days

The first step to landing a wholesale deal is to find a property you can acquire at a discount. This stage of the process will usually mean finding distressed properties that have motivated sellers, which you can easily find via the following techniques:

  • “Driving for dollars” or going around your area to spot vacant and abandoned properties
  • Checking tax lien or foreclosure records to find homeowners that are desperate to sell
  • Placing bandit signs in high-traffic areas that contain a short message and your contact details
  • Direct mailing or sending out postcards and flyers to potential sellers
  • Leveraging your network by joining real estate investment clubs and associations
  • Checking expired listings for properties that weren’t sold by the date specified in the contract 

Finding distressed properties and motivated sellers will take some time but don’t let this challenge stop you from trying to succeed in this industry. Keep in mind that real estate wholesaling is all about generating leads––the better and faster you get at doing so, the more you’ll become successful.

2. Negotiate for the Right Price: 5 Days

Once you’ve found potential properties, negotiate with the seller to determine a good price.

As a real estate wholesaler, the money you make will depend on how well you negotiate. Moreover, you can’t be too selfish while negotiating. Instead, you have to create and reframe the situation for the seller to see the benefits of agreeing to a lower price.

Your goal is to find the sweet spot price that’s low enough for the seller to approve, but high enough for you to generate a hefty fee without struggling to find a buyer.

If you aren’t confident in your negotiation skills, consider taking a seminar, reading books on the subject, or working with a trusted friend who has experience in real estate wholesaling.

Pro tip: Pay close attention to your tone of voice, body language, and behavior throughout the entire transaction, as it’ll indirectly affect the property’s selling and a purchase price as well—tampering with your potential profit. 

3. Find Buyers for Your Property: 10 Days

Once you’ve got a good price with the seller, it’s time to find potential buyers. Doing this may seem like an insurmountable challenge, but thanks to the Internet, it’s now easier than ever. Here are a few tips:

  • Create a website: Showcase your past work and customer testimonials so it’s easy to get new sellers and buyers to trust you. You can create simple websites with WiX or WordPress, or get in touch with a web developer friend to help you out.
  • Scan forums and social media: Online forums, wholesaling Facebook groups, and social media platforms are also rich sources of potential buyers. So join groups dedicated to helping people find their next home, and establish your trustworthiness and expertise as a real estate wholesaler there.
  • Work with agents: Ideally, you want cash buyers that wouldn’t need a loan to purchase a home, so the transaction is quicker and easier for you. The best way to find them is by working with real estate agents, as they’ll usually have a list of financially capable buyers.
  • Cold calling: In the real estate industry, cold calling is one of the most effective ways to find potential buyers. Reach out to your current connections and find out if they know someone on the market for a new property. Then, give those prospects a call to explain your deal.
  • Put up bandit signs: Another popular method of lead generation, bandit signs are poster-sized signs that contain an attention-grabbing message and your contact details. For a better shot at success, place them in high-traffic areas, like shopping malls and busy streets.

As challenging as this stage may be, know that there are many tried-and-tested strategies that will help you out. By leveraging your existing network and being creative with your methods, you’ll have a list of potential buyers in no time at all.

4. Close the Deal: 7 Days

After receiving confirmation from your buyer, you can now officially start closing the deal. Now, real estate wholesaling relies on short-term funding and compressed timelines, which means you’ll have to pay close attention to every part of this process to make sure that nothing goes wrong.

There are two types of contracts in real estate wholesaling. The type of contract you choose should largely depend on your risk tolerance and how fast you want to close the deal:

  • Assignment Contracts: Find a buyer and sell them the contract without buying the property yourself, so you won’t have to put down any of your own money. This entire process can take as long as a week to complete.
  • Double Close Contracts: Buying the property and immediately selling it off to a buyer will give you bigger profits as the two parties won’t know what you bought and sold the property for. This process usually takes longer and can even last a few weeks.

Each type of contract has its own set of advantages and disadvantages so evaluate your situation before picking which one to go with. For instance, assignment contracts may be simpler and quicker but they also mean that both parties will know how much you’re making on the deal, which doesn’t give you a lot of negotiating power.

On the other hand, double-close contracts may mean more anonymity and privacy, in terms of the profits you’ll potentially walk away with. However, the process takes longer, is more complicated, and involves financial risks. With this type of contract, you’ll have to pay closing costs two different times—-when you buy the property and when you sell it off.

There isn’t a right or wrong type of contract to execute. Rather, the best option will depend on your risk appetite, financial assets, and how much you ultimately want to earn on the sale.

One Month Richer with Real Estate Wholesaling

Real estate wholesaling relies on short-term funding and compressed timelines, which means you’ll have to pay close attention to every part of this process so nothing takes too long. Ultimately, your goal is to have strong negotiation skills and the determination to find people looking to purchase the property.

If you can do these things fast and effectively, you’ll be reaping significant wholesaling profits within 30 days—we guarantee!

If you want more tips on navigating the world of real estate wholesaling, subscribe to our email newsletter. You can also check out our website, where you’ll find the date of our next meeting and an application form to become a member of REIA.

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