Category: Wholesale

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Wholesale Wholesaling

Responding to Seller’s Objections to Wholesale Offers

Caption: Image byAnnika Wischnewsky on Unsplash

You’ve made your offer to a seller. You did your due diligence and made a great offer, and they have some objections. How you respond could make or break this deal. Understanding the seller’s objections and how to respond is crucial to obtaining the assignment contract.

Making the Initial Offer

Having a thorough offer will help you justify your offer. Include a detailed market analysis that includes comparable properties in the area that have sold within the last year to back up your proposal.

Add a list of your transaction costs. Being transparent about your costs will help you justify your offer price and show them the expenses you pay within the purchase price.

Being upfront and honest will go a long way in making the seller see your offer as genuine and lead to increased trust.

Seller Objections

Sellers voice objections for multiple reasons, below are the most common. Your understanding and response to their objections can help persuade them in accepting the offer you have on the table.

  • I’m Just Not Ready

The seller is procrastinating. They want to sell the house, they just need a nudge in the right direction.

Suggestion: Explain you’re there to close the deal and be respectful. Do not be condescending! They were interested in selling and you wanted to buy the property. Remind them time is money for both of you, the sooner they sign the sooner they will have the money they need. Have everything they need to sign at that moment. As you speak, hand them the pen and the contract. Worse case, set a followup date with them.

  • Why Should I Trust You?

Sellers may need reassurance about your credibility due to all the online scams and warnings..

Suggestion: All you can do is be patient, be confident and perhaps share addresses you’ve previously wholesale.

  • I Need to Think About This a Bit Longer

The seller may not be serious.  Your number one goal should then be to find their “hot button” and what motivates them. Reinforce how selling the home will benefit the seller. Remind them about the contracted time agreement and you would hate to see them lose the opportunity to get the assignment. Be empathetic but firm.

Caption: Image by Bruno Guerrero on Unsplash
  • I Think You Are Low Balling Me

The seller wants the best price possible, but you do too. Ask why they feel you are low balling them. Go over the numbers in your proposal to justify your offer. Reassure them you are offering the best price you can. Use your transaction analysis as your proof.

Remind the seller that you can close quickly with no inspections or other delays. Again, focus on their motivation! You can even ask them, “Do you want to list with an agent and wait 6 months or close with me in 6 days?”

  • I Need to Run This By My Significant Other (or someone else)

They wouldn’t be this far into the deal if they hadn’t already discussed it with their significant other (or someone else. This is just another delay tactic for them to solicit other, hopefully higher, offers.

First, ALWAYS be sure to confirm who the decision-maker is before making an offer. You may even want to confirm this over the phone before setting an appointment. If they still stall, you may have to play hardball with them and tell them your offer is only good until you leave. 

  • There are Other Buyers Interested in the Property

Just another stall excuse to solicit higher offers.

Again, your options are to find their motivation and focus on that or play hardball.

  • What Makes You a Better ChoiceThan Someone Else

Sometimes sellers are emotionally attached to a property. Maybe they grew up there or often visited and have fond memories. The only way to overcome emotional objections is with empathy and establishing rapport. This can be time consuming, so be prepared. 

Keeping Your Eye on the Prize

At the end of the negotiation, you want to walk away with an assignment contract. Listening to the seller and using some psychology to understand a seller’s objections and how to respond can  help persuade your seller that the offer you made is exactly what they need. Being empathetic, respectful, and professional and having a thorough market analysis, can be the solution to your seller’s financial objections.

REIA of Oakland members receive a monthly newsletter, industry-leading resources, and informative monthly meetings. If you haven’t taken advantage of what they offer Michigan property investors, contact them today and become a member!

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Wholesale Wholesaling

Some Sellers Are ALWAYS Desperate: Tips To Wholesale Metro Detroit Real Estate in 2023

A hand holding house keys with a door behind.
Source: Maria Ziegler from Unsplash.

The market is constantly changing and in the real estate industry, so you have to adapt to stay ahead of the game. As a real estate wholesaler, you have to know what’s happening in the market you’re operating in—the market isn’t the same playground as it was last year.

In this article, we’re looking specifically at Metro Detroit’s real estate market scene. We’ve provided new tactics and strategies to help you leverage current market trends, allowing you to serve potential clients to the best of your ability—and, of course, make really good profits.

Real Estate Wholesaling in Metro Detroit 2023

Higher prices and mortgage rates make buying properties a little more difficult for buyers. They’re no longer in a buy-buy-buy state of mind, being more careful with their purchases this year. So the median home sale prices in Metro Detroit are almost 7% down from last year, and inventory has risen 36%.

Median home sale prices in Metro Detroit.
Source: Axios Detroit.

Still, even with property prices dipping overall, the Metro Detroit market is still hot in several cities, where prices are stable and properties are selling over asking price, according to Crain’s reports. These “hot markets” include St. Clair Shores, Westland and Ypsilanti Township. Other markets to look out for are also Canton Township, Wixom and Sterling Heights, Novi, and Ann Arbor.

Experts are predicting that the market will skyrocket in demand, competition, and property prices in the near future, especially if the market follows typical trends that we’ve seen in past years.

In other words, we’re expecting Metro Detroit to become a seller’s market this 2023, where the demand will exceed the supply. There’ll be many interested buyers, but the inventory will be low. That said, buyers will be willing to spend more for a property, and they won’t have that big of a negotiating power. There might even be bidding wars that’ll drive up the property’s price!

For wholesalers, this is both good and bad news. The good news is that buyers will clamor over the deals you get. They’ll have a harder time looking for properties to purchase, so they’ll look to middlemen like you to get the job done. The bad news, of course, is that the sellers will have the upper hand, and you might find it challenging to find below-market-price properties to make a wholesaling profit.

So, what can you do this year to continue reaping profits in 2023?

4 Expert Insights to Successfully Wholesale Real Estate This Year

With everything that’s happening in Metro Detroit, we’ve come up with our top tips you can do to stay profitable amidst the twists and turns. These are based on our own experience, being experts in Metro Detroit real estate for over two decades (and counting!).

#1 Prioritize All-Cash Buyers

There is one type of Metro Detroit buyer that you can’t do without in today’s market: an all-cash buyer.

Because of the rising interest rates, you’ll have a challenging time convincing buyers to purchase homes on credit. Metro Detroit is already one of the lowest mortgaged cities, with only 1,700 mortgages given in a city of 670,000 people in the previous year.

So look for liquid buyers who, when they offer all-cash, will likely win the homes they bid on. All-cash purchases often hasten the homebuying process and make a seller more confident in the transaction.

Cash is king, that’s why platforms like Knock, Opendoor, Divvy, Homeward, and Ribbon Home offer cash guarantees to prospective homebuyers. Prioritize all-cash transactions to turn a faster and easier profit.

#2 Focus on the “Starter Home” Market

Expand your buyer’s list with new audiences. For example, the City of Detroit is identified as one of only four large U.S. cities where renters could recently afford a property. Renters actually make 31% more than the income they need to buy a “starter home”, so there are a bunch of locals seeking to purchase instead of renting a property.

Bar chart about cities where renters could afford a starter home.
Source: Point2homes.

So have your pulse on the market to know which areas are affordable and perfect for entry-level housing, including the ones with distressed properties and foreclosed listings below market value. Having excellent “starter home” deals allows you to potentially capture a large pool of clients—especially since half of the city’s population is currently renting and dreaming of owning a property.

#3 Build a Solid Reputation

Wholesalers often get flak as meddling men. But the reality is that you’re a key middleman. Closing a deal on the market is not just about buying and selling—it’s about the finer details. When equipped with proper knowledge and skills, real estate wholesalers should be seen as expert deal-finders.

So, know your stuff when finding property and dealing with buyers. Don’t fall into the trap of:

  • Overestimating the ARV (After Repair Value): You need the skills and data to properly analyze comps. Avoid overestimating the retail value of the home, or buyers will either overpay (and never work with you again) or simply turn you down (and also never work with you again).
  • Underestimating the ERC (Estimated Repair Costs): You’re not a flipper, which means you might unknowingly work with dishonest contractors. Buyers could end up uncovering hidden property issues they didn’t budget for—staining your reputation.

Apart from brushing up on your technical know-how, get to know people in your industry and keep your name in the game by attending local REIA (Real Estate Investors Association) meetings. Keeping your network active will help you save time and money in the long run, allowing you to seal more deals.

If you have the resources, also build a website, social media presence, have targeted advertising, and keep sellers updated with the latest industry trends—anything to put your name out there and be top-of-mind. You’ll get way more visibility this way, building a good reputation in the scene.

#4 Restrategize Your Marketing Efforts

Following the earlier thought, develop a strong marketing strategy and personal branding for yourself. Nowadays, it takes more than pasting your name on a bus bench to get prospective clients.

General rule is to put effort into high value leads, such as individuals that want to buy or sell actively and aren’t casually browsing. Move your marketing money where you can regain and profit from it, too.

Imagine being a prospective seller who wants to get a property off his hands, and he begins by Googling “selling my home quickly in Metro Detroit”. Chances are, he will land on generic real estate websites. Some businesses might not even be in Metro Detroit. But if you come out with a unique value proposition and get straight to the facts, that’s cost and time savings on one lead. Same goes for buyers.

And don’t stick solely to online channels! Capitalize on your home court advantage.

Call up the Metro Detroit title office and see who has purchased or sold homes, preferably in cash in the last 5-10 years. Also attend foreclosed property auctions to scout investors that need guidance on the legwork involved, and keep an eye out for sellers that are renovating or flipping their properties.

Real Estate Wholesaling in Metro Detroit: Go Big or Go Home

We’ll likely see the market increase in demand, competition, and property prices this year. With Metro Detroit becoming a seller’s market soon, you’ll find an influx of interested buyers clamoring over deals, but you’ll also have to deal with sellers that have the upperhand.

So prioritize all-cash buyers, focus on starter home areas, build a solid reputation, and restrategize your marketing monies to ensure that you’re more than profitable this year.

Join us as a REIA member and attend our upcoming REIA meeting, and sign up for our newsletter and stay informed with the latest news—it’ll help you be successful in your wholesaling endeavor.

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Wholesale Wholesaling

3 Successful Real Estate Wholesalers You Should Learn From Today

Source: Photo by Jud Mackrill on Unsplash

Are you struggling to make headway in the world of real estate wholesaling? Don’t give up! Learning from the experience of successful wholesale experts can give you the inspiration you need to move forward.

These trailblazers share their knowledge and expertise on everything from marketing to investing strategies. Follow their advice, and you too can turn your wholesale business into a profitable endeavor.

#1 Kent Clothier

Kent Clothier, CEO and founder of Real Estate Worldwide (REWW), is a visionary leader in the real estate industry. His expertise in generating high-quality prospects has led to the purchase and sale of over 4,000 properties, and his commitment to revolutionizing the industry has helped over 55,000 clients achieve their real estate goals.

Source: Realty411

Real estate wholesalers looking to improve in the industry can learn from Kent’s success. Through REWW’s educational platforms, he shares his perfected systems and processes for generating high-quality buying and selling prospects.

Kent’s vision for better technology and resources has led to REWW’s success, and he shares his knowledge and experiences through videos, podcasts, and a book. REWW Academy’s certification course teaches innovative marketing channels for wholesale real estate, allowing wholesalers to learn from the best and earn the title of Certified Real Estate Wholesaling Specialist.

#2 Carlos Reyes

Carlos Reyes is a first-generation US immigrant who left his corporate job in 2015 to pursue his dream of building his own real estate investment business. With the help of his partner, Sal Shakir, Carlos quickly built a successful business that generates six figures monthly from multiple markets across the country.

Source: Official Carlos Reyes website

Carlos not only achieved great success as a businessman but also worked to empower others to achieve their own goals and dreams in real estate investing. He shares his knowledge and wisdom on topics such as wholesaling, marketing, and investing strategies via coaching and educational seminars nationwide.

Carlos offers a Real Estate Investing A to Z Bundle, which includes three comprehensive courses, covering wholesaling, maximizing profits, and virtual wholesaling. In addition to courses, Carlos also has podcasts and videos that feature other leaders in the industry sharing their experiences.

Through his coaching and educational resources, Carlos Reyes is a valuable source of knowledge and inspiration for wholesalers who want to improve their skills and succeed in real estate investing.

#3 Alex Joungblood

Alex Joungblood, the founder of the Wholesaling Houses Full Time Facebook group, is a real estate investor with 19+ years of experience. He has completed $35 million worth of real estate transactions, scaling his business from wholesaling to renovations, new construction projects, and small developments.

What makes Joungblood stand out is his belief in using real estate to become financially independent, allowing you to spend more time with family and less time trading hours for dollars.

Source: Alex Joungblood website

Joungblood offers mentorship services to help aspiring investors find their first deal or scale up their business for more profits. He shares his experiences and expertise through his Facebook group and coaching programs. By learning from Joungblood, wholesalers can gain insights on finding discounted real estate investments, building a successful real estate business, and achieving financial independence.

His success story is an inspiration to many, and his willingness to share his knowledge to help others achieve their goals makes him an excellent source for wholesalers looking to succeed in the industry.

Is There a Better Way to Learn Than From the Best?

Experienced investors’ knowledge and expertise are essential to wholesaling real estate successfully. Fortunately, professionals like Kent, Carlos, and Alex offer their insights and advice to help novice investors increase their chances of success.

By utilizing their strategies, anyone can learn how to wholesale real estate effectively and reap the rewards of this profitable endeavor. Stay updated on industry news by subscribing to our newsletter!

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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.

Categories
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.

Categories
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.

Categories
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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