Landlording can be a lucrative business, but it also comes with its own challenges. That’s why it’s essential to minimize the learning curve as much as possible and get tips from those who have been in the business for a while. You don’t have to take the trial-and-error approach if you already know the “secrets” and tricks to landlording successfully!
Read on to know the four expert tips for successful real estate investing.
Make It Difficult for Rental Advertising Scammers
Unfortunately, there are a lot of rental property scammers out there—especially on Craigslist. One of the common scams is where other people will steal your real estate listing, use the property information and photos, and replace the contact details with their own numbers and email addresses.
Attract interested tenants
Say that they’re “currently out of the country” and can’t turn over the keys to them
Have the tenants hire a locksmith to change the locks themselves
Collect rent money and security deposit
Then disappear into thin air. You’ll be left with clueless tenants you didn’t get to screen, and a rental property you can’t rent out without telling the scammed tenants to go.
How can you avoid these scams?
Be proactive and mark your photos with your phone number and contact information. Scammers won’t take the extra time and effort to remove your watermarks; they’ll skip over your listing and look for other opportunities elsewhere.
Another tip is never to publish the actual address of your home. Instead, use the nearest cross streets to give tenants a good indication of where your property is without revealing the address to scammers.
Be Attentive and Creative in Screening Tenants
The ultimate goal of screening tenants is to ensure they are responsible people who’ll pay rent on time, maintain your property well, and abide by all the clauses in your lease agreement. In other words, the best way to avoid bad tenants is by having a good screening process.
Here are our pro tips on how to screen them:
Assess their cleanliness: Walk them to their car. Take a peek at how clean or dirty their car is inside. Chances are, if their vehicle is filled with garbage (like this poor vehicle), they’ll treat your rental home the same way, too. Their car is a reflection of what’s to come for your home. Or even do a surprise visit to their current residence – how it looks is how your property will look after they move in.
See if they have pets: Don’t ask if they have animals, because they can easily say no to that. Instead, ask how many animals they have—indicating that you already know they have pets and you only want to know how many of them there are. Make it a bit harder for them to lie.
Moreover, don’t believe anybody who says that their animals will “live somewhere else”. All too often, those animals will only live elsewhere for a while before moving into the home.
In other words, make it slightly more difficult for them to hide secrets from you. By checking their car and assuming that they have pets, you’ll get more honest answers out of the applicants, making it easier to decide if you want to accept them as your tenants or not.
Be Cautious in Accepting Upfront Payments Covering Multiple Months
Receiving upfront rent payments may seem great for you. You get to secure the money earlier without having to chase tenants for payments every month. However, take note of the following:
Is it legal? State and landlord laws might have a maximum upfront rent payment allowable, while some will require you to pay interest on it. Ensure that you’re familiar with the laws before accepting any upfront rent.
Why can the tenant afford it? Did they come upon some money and want to ensure that it goes somewhere necessary before they spend it irresponsibly? If that’s the case, they might not have a stable income or employment to afford the home in the first place.
Of course, there are exceptions to these situations. If you’re renting out to students, for example, the parents might pay upfront rent so their family won’t have to worry about paying monthly rent anymore.
Have a Thorough Lease Agreement
You may be tempted to use online lease agreement templates so you won’t have to create one from scratch. However, barebones templates won’t do much in protecting you or your investment property.
Plus, there are specific state and local landlording laws that you’ll have to consider in your lease, and other rental-specific rules that you’ll want to have (e.g., regarding smoking, pets, or painting the home’s interior). These are things that generic templates won’t guarantee or cover.
Instead, everything you want the tenants to know should be included in the lease agreement, so use online templates only as a guide to creating your own document.
Once your attorney approves the draft, sit down with your tenant and go through the entire thing. Don’t assume that they’ll read the agreement on their own—most of them will skim through it and call it a day. You’ll end up with tenants that will likely forget your rules, creating many problems down the line that could’ve been avoided in the first place.
Ensure that they know and understand your rules by having them put their initials at the start of every paragraph or sign every page of the agreement as confirmation. If anything unfortunate happens in the future, the tenants won’t have any excuse to say that they didn’t know the rental lease guidelines.
Pro Tips for a Successful Real Estate Investment Business
There are many other pro tips that you can learn from experts. Knowing these secrets is the best way to ease yourself into the rental business, become a great landlord for your tenants, maintain your real estate property, and protect your monthly cash flow for investment success.
Become a successful landlord today! Get in touch with me or my team at Logical Property Management.
We’ve been managing properties for more than two decades now, and have more tips and tricks to share for a thriving rental property business.
Websites like Airbnb, VRBO, and Homeaway have made it easy for short-term rentals to gain popularity among real estate investors today. In Michigan specifically, you’ll benefit from the growing short-term property market, generate a higher return on investment compared to traditional rental properties, and quickly find new guests thanks to online booking platforms.
Michigan is one of the hottest real estate markets in the nation today. The only thing left is to know which city to purchase your short-term rental in, which we’ve listed below.
We based our list on two key factors: high cash-on-cash returns and rental income. They contribute the most to your short-term rental investment success, which is why we’ve based our list on the two factors.
Disclaimer: All the figures below come from Mashvisor, AirDNA, and Zillow reports.
1. Traverse City, MI
Traverse City is the largest city in Northern Michigan and the largest producer of tart cherries in the nation. In 2012 alone, more than 3.3 million visitor trips were made to this city, resulting in $1.18 billion in direct spending toward its tourism sector.
Guests come here to see the grapevines at Traverse Wine Coast, swim in deep freshwater lakes, and grab a cold one in many craft beer spots. Traverse City is a rustic, charming small city filled with artists, craftsmen, and musicians that contribute to its rich local communities.
Typical Home Value: $416,822
Home Value Increase: 25.4% year-on-year
Cash-on-Cash Return: 7.13%
Rental Income: $4,572
Rental Growth: -16% quarter-on-quarter
Capitalization Rate: 7.13%
Occupancy Rate: 65.37%
Active Rentals: 1,310
Rental Channel: 46% Airbnb, 24% Vrbo, 30% listed on both
2. Grand Rapids, MI
Grand Rapids is one of the fastest-growing cities in the nation, attracting travelers interested in art museums, galleries, and competitions. Its tourism industry has also been growing for ten consecutive years from 2009 to 2019, thanks to economic growth and an evolving, diversified community.
Guests come here to visit the John Ball Zoological Garden, Belknap Hill, Gerald R. Ford Museum, Van Andel Museum Center, Frederik Meijer Gardens & Sculpture Park, and Grand Rapids Art Museum. There are also countless craft beer spots, as craft beer is the leading tourism driver in Grand Rapids since 2013.
Typical Home Value: $308,077
Home Value Increase: 17.6% year-on-year
Cash-on-Cash Return: 5.42%
Rental Income: $3,029
Rental Growth: 4% quarter-on-quarter
Capitalization Rate: 5.42%
Occupancy Rate: 68.79%
Active Rentals: 438
Rental Channel: 78% Airbnb, 9% Vrbo, 13% listed on both
3. Lansing, MI
Lansing is Michigan’s capital city that attracts traveling families all year round. The city welcomes around 4.8 million visitors every year which fuels its strong tourism industry.
Here, they can visit the Michigan State Capitol with a cast iron dome, the Michigan History Center that details the state’s past, Potter Park Zoo with more than 160 species of animals, Impression 5 Science Center with interactive exhibits, and the R.E. Olds Transportation Museum for unique and vintage cars.
Typical Home Value: $142,780
Home Value Increase: 14.6% year-on-year
Cash-on-Cash Return: 8.66%
Rental Income: $2,556
Rental Growth: 8% quarter-on-quarter
Capitalization Rate: 8.66%
Occupancy Rate: 65%
Active Rentals: 212
Rental Channel: 74% Airbnb, 8% Vrbo, 18% listed on both
4. Dearborn, MI
Dearborn is a historic destination for travelers worldwide. In fact, it is home to Michigan’s leading tourist attraction, The Henry Ford—the nation’s largest indoor-outdoor American history museum and entertainment complex. Henry Ford alone attracts around 1.6 million visitors every year.
Apart from The Henry Ford, guests can also enjoy Greenfield Village, Arab American National Museum, the Henry Ford Estate, the Islamic Center of America, the Automotive Hall of Fame, and more.
Typical Home Value: $214,291
Home Value Increase: 16.4% year-on-year
Cash-on-Cash Return: 7.48%
Rental Income: $2,469
Rental Growth: 19% quarter-on-quarter
Capitalization Rate: 7.48%
Occupancy Rate: 61%
Active Rentals: 63
Rental Channel: 64% Airbnb, 22% Vrbo, 14% listed on both
5. Kalamazoo, MI
Kalamazoo is known for being the home of the US Tennis Association Boys 18 & 16 Championships for the past six decades, but it’s also the manufacturing domain of Gibson Guitars, Checker cabs, Kalamazoo Stoves, Kalamazoo Sled, Kalamazoo Corset, and Shakespeare fishing gear.
Guests can immerse themselves in the youthful energy and cultural spots in Kalamazoo, such as the Kalamazoo Institute of Arts, Kalamazoo Valley Museum, Gilmore Car Museum, Air Zoo, Bronson Park, Arcadia Creek Festival Place, and Kalamazoo Nature Center.
Typical Home Value: $215,027
Home Value Increase: 14.4% year-on-year
Cash-on-Cash Return: 7.31%
Rental Income: $2,759
Rental Growth: 8% quarter-on-quarter
Capitalization Rate: 7.31%
Occupancy Rate: 70%
Active Rentals: 151
Rental Channel: 78% Airbnb, 9% Vrbo, 13% listed on both
4. Short-Term Rentals, Long-Term Success in Michigan
Take your pick from the list above and start investing in Michigan short-term rentals! All the areas we’ve listed are profitable areas for you to take advantage of local tourism industries.
As long as you conduct property rental investment analysis and create a comprehensive income sheet, you’ll be on your way toward investment success in Michigan.
The list doesn’t end here. We’ve gone ahead and evaluated the rental property opportunities in every Metro Detroit city and neighborhood, too. Head to our Deep Dive series to find more hotspots in Michigan.
It’s no secret: wholesaling can be a lucrative real estate investment method to earn a profit with minimal capital. On average, you can make around 5-10% of a property’s market value if you wholesale an undervalued home—that means you’re looking at a profit of $10,000 to $20,000 with a $200,000 home if you can get it under market value!
However, getting a slice of this pie does not come easy. Contrary to popular belief, real estate wholesaling takes a whole lot of skill, patience, and elbow grease.
For example, you need to find a property with a motivated seller, then find a buyer for it, coordinate all the paperwork required, complete the deal as soon as possible, and repeat everything again. You also have to simultaneously grow and maintain your buyer’s list so your business doesn’t come to a halt.
In other words, there’s a lot to keep track of when dealing in wholesaling.
But there is a solution to it: Make a list! Just like most projects in life, it’s easier to streamline the wholesale process if you have a checklist to guide you. That’s why we’ve written this ultimate checklist for wholesaling real estate—perfectly designed to help wholesale investors like you.
The Wholesale Checklist
Having a guide to the step-by-step requirements of a wholesaler can make the entire procedure easy as pie. But we do understand that not all of the things we’ll mention below will apply to you, so we advise that you focus only on the things that are most relevant to you.
Let’s get to the checklist!
A. Select a Market
Have you selected a market? Have you checked the trends of the current market?
Selecting a prime market can land you a hot deal. You want to find a market where there isn’t too much competition but is still highly coveted. In other words, try to find a balance—buyer markets that are on an upward trend without much competition to deal with.
Take for example Burlington, N.C. There’s a total of around 57 thousand brokers in North Carolina—far smaller than states like Florida with 212 thousand. But, the real estate market in Burlington, N.C. is booming right now. In fact, it is the 2nd most lucrative market in the US with listings only lasting an average of 35 days on the market.
You can only identify potential markets like these if you’re familiar with real estate market trends, so here is a quick jump-off point to get started:
Reference the MLS listings to get an idea of current trends in real estate prices.
Look for how long listings stay on the market. The less time on the market, the faster the turnaround for properties, and the better the situation for you.
Additionally, it’s important to know the median price of properties sold, so you know what you’ll be working with. For instance, in Burlington, it’s $295,000.
Once you’ve chosen your ideal market, you can move on to the next step in the checklist.
B. Build a Buyers List
Have you built your buyer’s list? Have you found any willing buyers in the area?
You’ll need a robust buyers list for a steady stream of good deals. Your goal is to continuously generate and follow up with the leads in that list so your wholesale investment becomes a growing business.
Create an online marketing campaign. Use social media and other platforms to get the word out on your name to build a potential buyers list.
Use customer relationship management platforms (CRM). Creating accounts on CRM platforms like Hubspot or Zillow can increase your reach to interested buyers.
Take note of buyer contact information and criteria. Make a note of the budget of your potential buyers and their contact info. When you find an appealing property, you can reference your list to see if the property coincides with the budget of one of your contacts.
By having an established and growing buyers list, you can increase the reach of your wholesale business which can lead to more deals and profits.
C. Look for Motivated Sellers
Once you’ve accomplished the first 2 steps, you can now enter the meat of the wholesale process: Finding a motivated seller with a property that coincides with the criteria of your interested buyers.
Now, in the industry, you’ll notice that distressed properties are popular for real estate wholesaling. There are 2 reasons for this: It’s easier to convince sellers to let go of their unkempt homes, and it’s easier to secure a larger discrepancy versus market price.
Use social media to create a marketing campaign for yourself.
Create a dedicated email address and/or phone number to screen incoming leads.
Once you’ve found a motivated seller. You then must hash out your wholesale contract.
D. Create the Wholesale Contract
Having found a motivated seller, you now need to finalize the wholesale contract. When creating the contract, you need to make it clear to the seller that you’re not buying the property.
You need to establish that you’re only finding an interested buyer for the seller.
Given that, be sure to establish the terms of what will happen if you fail to find a buyer. For example, you can set up an earnest money clause that will act as a guarantee. This clause will protect you and the seller in the event of failing to find a buyer. You will hand over an earnest money deposit that will act as a contingency that will be returned to you once the wholesale is complete.
Then, you need to find a buyer for the property.
D. Look for an Interested Buyer
Once the details of the wholesale contract have been decided, you then need to find a willing buyer. Be sure to thoroughly scope out the property to make it easier to find buyers.
For example, take photos of the property that shows potential buyers exactly what it looks like without having them visit the home. Additionally, take note of important details such as the number of rooms, the size of the property, and the overall condition of the property.
Once you’ve gathered all the necessary information, you should then do the following:
Send the property report to targeted buyers on your buyers’ list. Ensure that you send the property only to the buyers with the perfect criteria—or you lose their trust in the long run.
Like insurance, you can get in touch with local wholesalers to market to their own buyers. This expands your coverage, helps you grow your network, and makes it easier for you to sell.
Once you find a willing buyer, you can then move on to the contract turn-over.
E. Assign the Contract
With a willing buyer, you can then move on to assigning the contract. Here are the basic steps to remember when assigning a contract to a buyer:
Receive the amount necessary to purchase the property from the buyer.
Collect your earnest money deposit from the seller.
Turnover the buy and sell contract of the property to the buyer.
Enter into a new assignment contract with the buyer and collect your wholesale fee.
Contact an escrow company to complete the deal after the arrangements have been made.
Once the buyer has the contract, you can move on to the final step of the wholesale process.
F. Close the Deal
The escrow company will now oversee the process of transferring the property to the end-buyer. During this phase, you should keep in touch with the escrow company to get updates on the progress of the sale.
Once the sale is completed, the escrow company will turn over your assignment fee, and your wholesale will be completed.
Follow this Checklist to Make Your Wholesale Easy
Getting into wholesaling unprepared can be a recipe for disaster, and we don’t want that—not when real estate wholesalers already tend to have a bad reputation because of newbies making rookie mistakes!
But with the use of a checklist, you can avoid many of the pitfalls of wholesaling, increase your odds of landing a wholesale deal, feel less stressed with conducting your business and reap continuous profits from the many deals you’re scoring.
Take our list and make it your own! Good luck in your venture and feel free to comment on any other concerns you have in the comments section below.
Getting better at house flipping can be an essential tool for becoming a successful flipper. Gathering info from books and other resources helps expand your knowledge in the flipping game. Plus, learning from experienced flippers can give you a huge leg up against competing flippers.
But, you don’t have to limit yourself to books. These days, Youtube is a great learning tool. In fact, 7 in 10 Youtube users use the platform to learn. And it goes without saying, that you can gain a wealth of real estate tips from Youtube.
To help you get an upper hand in the house flipping game, we’ve collected 5 of the best Youtube channels to learn from.
5 Best House Flipping Youtubers
If you’re tired of reading books on real estate, well then Youtube is a great resource for getting the latest and greatest tricks in the house flipping business. But, you don’t want to just learn from some random Joe Schmo. You want to learn from someone with a wealth of experience.
That being the case, we’ve sifted through Youtube’s content library to find the best house flipping channels.
Joining the platform in 2008, Lex Levinrad is a veteran of the Youtube landscape. Not only that, but he’s also a veteran of the flipping game. According to Lex, he’s flipped over 1000 houses throughout his flipping career. Currently, he has 17 thousand subscribers and has a total of over 2 million channel views.
The Lex Levinrad channel will help fill gaps in your flipping know-how. For instance, his video on flipping a fire damaged property. In it, he gives tips about the pitfalls of buying a fire-damaged house and what repairs to focus on.
With the Lex Levinrad channel, there’s always something new to learn about flipping houses.
The HouseBarons channel is run by brothers Dave and Rich. They’re quite successful as Youtube creators considering their channel has garnered over 13 million views in its 10-year lifespan. Add to that, the HouseBarons gathered a healthy following of over 38 thousand subscribers.
On the HouseBarons channel, you’ll get find a large vault of very specific tips and tricks. Take, for instance, their tutorial on fixing a faulty door. After all, creaking doors that open by themselves might be something you don’t want to show potential buyers during a property tour.
All in all, the HouseBarons Youtube channel can be a great wellspring of knowledge.
If you’re just beginning your journey in the house flipping business, the Real Estate Investing Tips for Beginners Youtube channels can be a great instructor. The channel has over 720 videos that cover a wide variety of topics for investing in real estate. It has just a bit over 50 thousand subscribers and uploads regularly.
The channel has a series of videos dedicated to house flipping. There’s even a guide for how to start flipping with just $10 if you’re on a tight budget. From house flipping to wholesaling, you can learn a ton of real estate tips from this channel.
Learning from experienced flippers is a valuable experience that can’t be replaced. But some experts forget how to talk to beginners and can drown you in jargon. Thankfully, The Friendly Flipper channel makes this easy. With over 130 videos dedicated to house flipping, you’ll learn a ton and it’s all easy to digest content.
The Friendly Flipper host a range of videos from interviews with fellow flippers to flipping progress vlogs. For instance, in his latest series of videos, you can follow the entire progress of a flip over the course of just 7 days.
When you subscribe to The Friendly Flipper, you’ll get a great guideline for flipping houses.
Finally, BiggerPockets is one of the biggest channels on this list. In fact, it has nearly 900 thousand subscribers to date. And with over 2.3 thousand uploads, you’ll have a lot of content to digest.
On the BiggerPockets Youtube channel, you’ll get the full breadth of what it takes to be successful in the real estate business. While the channel covers the entirety of the real estate market, it isn’t lacking when it comes to house flipping. For example, one of their most successful videos is a series that goes through the house flipping process from start to finish.
Between securing funding to looking for the right property, you can learn a lot from BiggerPockets.
Expand Your House Flipping Knowledge with Youtube
There are a lot of avenues to explore when it comes to learning about house flipping. From reading a book to listening to experienced flippers recount their journey, you can pick up tips from almost anywhere. With this list, you can easily turn on a video to learn a little more every day.
Follow these 5 channels, and you’ll gain enough flipping knowledge to gain an edge over other flippers.
When conducting wholesale deals, contract negotiations become an everyday occurrence in your life. This means that if you aren’t knowledgeable about the requirements and details of wholesale contracts—you can end up losing a deal.
You have to be exceptionally familiar with contracts to be a successful wholesaler, which is why we’re writing this article to dive deep into the key paperwork you’ll need. Nail these on the head, and you can navigate through the world of real estate wholesaling with ease.
What is A Buy and Sell Contract?
Otherwise known as a purchase agreement, this is the contract you enter with the seller of the property. It acts as a legally binding agreement and outlines the terms of the offer between a buyer and seller in real estate transactions.
Your job as the wholesaler is to act as a middleman and find a willing investor to buy the property. That means to need to know how this is the contract permits them to purchase the home. Once you find a buyer, this contract transfers from you—the wholesaler—to the buyer.
The content of the buy and sell contract should have the following:
The date of the agreement
The name of the seller/individuals listed on the property’s title
The buyer’s name
The earnest money deposit.
The total purchase price of the property
Closing date and transfer of title
Escrow and closing fees
The buyer can be assigned to pay the fees
Or it can be the seller
Or they can pay equally
Or they can pay their respective escrow and closing fees
Signatures of you and the sellers
Date of signature
This list isn’t exhaustive, but these are the most relevant things you should pay attention to in buy and sell contracts. As long as you have these covered, you should be good to go.
Note that your buyer will also thoroughly examine the agreement before getting into the deal with you. As such, it’s best that you know your way around these contracts well enough to answer their questions and successfully close the sale.
What Is A Seller’s Disclosure?
The State of Michigan requires a seller to complete and sign this disclosure to accompany any and all purchase transactions. It’s meant to protect a buyer from seller misrepresentation about the condition of a residential property.
Since most sellers aren’t aware of this form, you’ll want to keep a copy with your buy-sell contracts. Do NOT ever complete the form though, for a seller—legally they must complete it.
The next one to know is an assignment agreement.
What is An Assignment Agreement?
An assignment agreement is a real estate contract that transfers your rights and responsibilities listed in the purchase agreement to your investor—the new buyer. Often, this can also be referred to as an “Assignment of Real Estate Purchase and Sale” agreement.
After signing this contract, the buyer will take over the purchase agreement, and you’ll be awarded an assignment fee. Only you and the buyer will receive copies of an assignment agreement since the seller is not involved in completing an assignment contract.
An assignment contract needs to contain the following:
The agreed-upon assignment fee
The assignor’s name
The assignee’s name
The date of agreement on the purchase contract
The names on the purchase agreement
Location of the property
Assignee to pay the security deposit in escrow
Signatures of you and the buyer
Date of signature
Once the assignment contract has been signed and fulfilled, the investor will then take over the purchase agreement. After that, the buyer closes on the property and you’ll be awarded your assignment fee.
Wholesaling Contracts Made Easy
There’s a lot of paperwork that comes with wholesaling in the real estate business. If you get in over your head and gloss over every other contract you get into, you can end up losing your wholesale deals—or worse—alienating your potential buyers.
If you ask us, it’s just not a risk worth taking if you want to grow your wholesaling business.
With our help, you’ll have a good idea of how the contracts you’ll be dealing with regularly are done. If you need more help with wholesaling paperwork, feel free to reach out to us!
Have any questions about wholesaling contracts? Let us know in the comments below!
Consistent lead generation is paramount to your success in the real estate wholesaling business. Finding a seller begins the wholesale process while finding a buyer closes the deal.
However, generating valuable leads does not come easy.
Even when you already have a long list of leads, you’ll still have to trim it down to the quality ones. After all, you don’t want to have just any leads—you want to garner high-quality leads to close more deals. And this can only be achieved by mastering the methods for consistent lead generation.
In this article, we’re going to tackle some real estate lead generation ideas so you can keep growing your buyer’ list. By having consistent growth in your buyers’ list, you can be confident that you’ll keep closing wholesale deals—and keep your income stream flowing.
6 Ways to Generate More Leads
Generating leads in wholesale real estate requires diligence. That said, even a wholesaler’s time and effort are an investment. To ensure that your work pays off, you’ll have to work smart—not hard.
For example, if your current method isn’t giving you the desired results, you need to try different lead generation strategies. Remember what Albert Einstein said, “Insanity is doing the same thing over and over and expecting different results.”
And you don’t want to fall into that frustrating trap.
So, consider using these wholesale lead generation strategies to fill up your list, so you can spend time closing more deals.
1. Multiple Listing Service (MLS)
The Multiple Listing Service is an exclusive online database for licensed real estate agents, featuring properties available and sold on the market. What’s great about this is that it can automatically send leads to your inbox, among many other perks. More importantly, this real estate lead generation strategy is completely free—as long as you find access to it.
Another benefit of this is that it can also connect you to other real estate investors in the market. As you grow your buyer’s list, you can also grow your business network.
Still, using MLS requires some dedication to be effective. Since a lot of agents use this strategy, posts can easily get lost among thousands. You’ll also need to go through many real estate leads until you find quality ones.
So, yes, MLS comes with a few challenges. But, it’s comprehensive, affordable, and convenient—making it a terrific real estate lead generation method.
2. Leverage Networking
Connecting with other real estate investors and helping each other out can keep you consistently closing deals. Now, some wholesalers are looking for sellers while others are looking for buyers. But by pooling together your resources, you can establish a mutually beneficial relationship.
Nevertheless, this setup requires you to split profits. You’ll earn a bit less, which means you need more leads to compensate. This strategy is still great for growing your buyers’ list, as well as your network, so the pros outweigh the cons.
Apart from the real estate community, you can also look at your personal network. You never know which one of your friends or family members is looking to invest in. A quick post on social media sites or asking around might seal you some great—unexpected—deals.
In other words, think out of the box and use your current network to generate wholesaling leads.
3. Cold Calling
This method is a popular one, as it kills two birds with one stone. By cold calling, you use your existing leads to generate new ones.
The idea behind this is that people with similar interests usually gather together. Similar to how there is a network of wholesalers, there is also a network of buyers. So, take advantage of your current connections to see if they know others who are interested in your deals, even if they aren’t interested themselves.
Once you’ve identified some prospects, give them a quick call. Then, keep all of these individuals in mind and remember to follow up whenever you have something to offer. You can then continuously assess which ones are willing to make a deal, giving you very high-quality leads more willing to make a deal with you.
4. Drive for Dollars
Driving for dollars is a tried and tested strategy for real estate lead generation. There are many leads out there in the world—and sometimes all it takes is a quick drive around town to spot the right signs, literally. Yes, your car’s mileage will increase, but so will your buyer’s list.
Many real estate investors are also renters. In other words, you might find a house with “for rent” signs and contact details.
Once you see these potential clients, give them a call to ask if they’re investors looking for properties. Investors are always looking for the next opportunity, so you might just get lucky and land on a willing prospect. And even if the person is an agent, that still works, because they might be looking for properties on the market as well.
5. Real Estate Agents
If there’s anyone that’s knowledgeable about the local real estate market, it’s the real estate agents.
If you’re considering doing future investments in a certain area, a real estate agent can help you start. Real estate agents can be very helpful in building your buyers list and growing your own network. When you’re investing in a new area, they can help you close your first few deals by linking you to local sellers, investors, and properties in the local market.
Once you gain a grasp of the local market, you can start doing deals on your own. Alternatively, if you establish a good business relationship, you can even consider becoming long-term business partners. Real estate agents won’t only help you grow your buyers’ list, but they can help you land consistent deals.
6. Bandit Signs
Bandit signs are poster-sized signs with a short, direct message and contact details. You usually see a dozen of these signs near a property, often in high-traffic areas like local markets, shopping malls, and busy streets. It’s a common practice in real estate since it’s an effective form of real estate marketing.
After all, leads can come from all sorts of places. And this method is a great way for you to cover multiple areas and expand your reach. Also, it’s usually quite affordable to put up bandit signs making this a more cost-effective way to strategically grow a buyer’s list.
Real estate wholesaling takes time, effort, and commitment. As a wholesaler, you have to strategize, think ahead, and be ready to face challenges head-on. Yes, generating wholesale leads does take a lot of work. But if you do it right, all that hard work pays off. The more leads you generate, the higher your chances of closing deals.
With these strategies at your disposal, you’re now ready to generate consistent leads to propel your real estate wholesaling journey to the next level.
Got tips of your own or stories to share? Let us know in the comments below!
As COVID-19 slowly loosens its grip on our society, Airbnb’s popularity is reemerging from the ashes.
While the company saw a 72% drop in its services at the height of the pandemic, Airbnb is now seeing an increase in bookings once more, thanks to significant restructuring.
With this post-pandemic growth, short-term rental landlords are now looking at ways to optimize their vacation rental business to take advantage of the boom. And, more importantly, stand out from the competition.
One of these techniques is using multiple Airbnb accounts for your various properties, as we’ll see in this article. Of course, there are a few things to keep in mind, but the strategy proves to be a great way to show up more in Airbnb’s search results, increase your property’s visibility, attract more guests, and secure more bookings.
Let’s take a closer look.
Can I Have Multiple Airbnb Accounts?
You may be thinking, “Is it even legal to list the same property on multiple Airbnb accounts?” After all, you don’t want to go against any of Airbnb’s rules and regulations and risk getting banned altogether. The company can track single IP addresses or cross-reference your contact information to prevent its users from having multiple accounts
Since they do regularly crackdown on users trying to flood Airbnb listings with the same property, we advise against it. However, if you have multiple properties, then you can have a different account for each different property.
While it is a lot more work, it can be alright if you are operating an Airbnb business with different properties in vastly different areas. We’ll explain why you might do that in a bit.
Of course, if you don’t want to deal with multiple accounts for your listings, consider posting your properties on multiple platforms instead of just Airbnb. There are plenty of other options today like VRBO, Booking.com, and TripAdvisor. You can even try social media sites like Facebook and Instagram to expand your reach.
Next up, let’s explore the situations where you can have multiple Airbnb accounts.
When Should I Have Multiple Airbnb Accounts?
As we said, Airbnb doesn’t allow users to manage multiple accounts for the same listings. Although, managing multiple accounts for other situations can be beneficial for your short-term rental properties. Keep in mind, this advice is for people with multiple properties.
Now, here are a few reasons why you might need multiple Airbnb accounts, you can:
Have separate accounts for the properties that are in different locations. They’ll have unique addresses that will help potential guests see that your rentals are in a specific area, rather than thinking you’re spread across multiple locations (and might not have expertise in the local area). Plus, if you have Superhost status and get a bad review on a different property, it won’t affect your status on your other accounts.
Have separate accounts if you’re running a property management company. This way, your team can oversee several properties across the Airbnb platform. You can have one account for guest bookings and another for hosting services, although this might complicate things for your team.
As you can see, there are some cases where you have multiple Airbnb accounts. But, make sure that you are always following the rules on the platform, so you don’t get banned and miss out on additional income.
How Can I Manage Multiple Airbnb Accounts?
Now, managing multiple Airbnb accounts isn’t easy. You’ll have to figure out a way to do the following across different accounts, logging in and out of each profile to:
Stay on top of your messages and communication with guests
Update your calendar to avoid double-bookings
Change your prices, post new information, or pick new photos for your listings
It’s a lot to do, but you can use smart tools to streamline daily property management operations and control the many aspects of your short-term rental business.
Here are a few ways to do so:
Hire a property management company to handle properties on your behalf. Get in touch with us if your short-term rental properties are in the Metro Detroit area!
Use a vacation rental software solution like AirGMS to automate operations.
Bring in a co-host to double your workforce and combine Airbnb techniques.
Follow these tips to help you take care of multiple Airbnb accounts and lessen your chances of going against Airbnb’s rules. Additionally, having a property management company or co-host means you’ll be logging in to Airbnb via different IP addresses, which helps your case.
Level Up Your Airbnb Strategy
Take the time to consider whether you can manage different Airbnb accounts and if it makes sense for your portfolio of short-term rentals. The better you plan for it, the greater the chances of your properties ranking higher in Airbnb’s search results—being more visible to potential guests.
Once everything is running smoothly, you can sit back, relax, and watch your bookings increase alongside Airbnb’s post-pandemic revival.
Got any thoughts on this listing strategy? Comment down below, and let’s get a conversation going.
Creepy old mansions may be a nightmare for most people, but they’re hidden gems for a house flipper. These oldie-but-goodie properties are examples of how distressed properties have great value within them, giving real estate investors opportunities to gain massive flipping profits.
Why are there distressed properties in the first place?
Well, there are a lot of reasons why a home could become neglected. Here are a few examples:
The home could’ve been a foreclosed home left to someone as inheritance, but it’s located far from where the person currently lives. The home left behind will often go into probate for a year, during which time the new owner cannot touch it. That means it’ll sit for a year, quickly deteriorating.
The home could’ve gone through a natural disaster like a flood or tornado, and the owner doesn’t have the funds to repair it. It’ll also sit there rotting away.
The home could’ve been a rental that a tenant trashed and the landlord can’t take it anymore—not bothering to fix the home up again.
The home could’ve been owned by a hoarder with low income. They pay taxes, sure, but they don’t have the money, skill, or energy to keep the house in good condition.
Any of these situations leave many homes neglected and, eventually, distressed. However, while these homes are someone’s problem, they’re certainly your investment opportunity.
Here are a few reasons you should buy distressed properties, and how you can find these lucrative deals.
The Flipping Opportunity with Distressed Properties
To understand how the concept works, we need to first discuss how a home becomes a distressed property. So, here’s what usually happens:
Owner Hardship and/or Neglect: Owner of a property loses their job, becomes ill or perhaps relocates. They may also inherit the property.
Property Deteriorates: The issues above lead to the property falling into disrepair. At a certain point, potential buyers either don’t want to take on the repairs or can’t get a standard mortgage on it due to the poor condition.
Cash Opportunity: At some point the homeowner will try to sell the property. Or maybe a motivated flipper can convince them they should sell. Either way, they will have to sell at a discount due to the lack of market demand for the property when it’s in poor condition.
Situations like these give you opportunities to buy properties at a low price. These distressed properties are ideal for flipping because they’re rundown homes with tons of hidden value. Yes, they’re cheap because they’re in poor condition, but the lack of market demand will drive the market value even lower than the cost of repairs.
The Risks and Benefits of Flipping Distressed Properties
Now, while the benefits of flipping distressed properties sound exciting, there are certain risks you’ll need to consider before committing to one. Here’s a chart to help you see the full picture:
The benefits are great, but the risks are inevitable. By anticipating the potential issues that sometimes arise with distressed properties, you’ll be ready to handle high-risk, high-reward fix-and-flip projects without a hitch.
Ways to Find Distressed Properties
You won’t find “distressed property” a common label in the real estate industry. Instead, you’ll need to think more strategically about how to find situations that will have motivated sellers.
Thankfully, there are several ways to seek out distressed properties. Here are some of them:
Drive For Dollars: Select a neighborhood and look for homes with obvious signs of neglect. These can be signs like multiple notices on the front door, peeling and faded paint, an unkempt yard, broken windows, or uncollected mail.
Access the Multiple Listing Service (MLS): If you can find a way to access the MLS (say, if you have a real estate license or a friend who can help you), you can find distressed properties with remarks like, “handyman special” or “fixer upper”. The longer the property stays in the MLS, the higher the motivation of the seller.
Find Foreclosed Properties (REOs): Peruse REO and bank-owned properties to find good opportunities. Lenders and banks aren’t in the business of keeping properties, and want to get rid of these non-performing assets as soon as possible. They will likely sell the homes to you at a discount.
Identify Homes with Delinquent Mortgage Payments: You can find public records of delinquent mortgages at your local courthouses. Individuals who can’t pay their mortgage are likely willing to sell their home to avoid foreclosure.
You can also try to find motivated sellers with delinquent property taxes, as they’re likely behind on mortgage payments as well.
Consider Probate Options: You can visit the probate court to find properties left behind by situations such as divorce or death in the family. In some cases, the family left behind might not want the home. That said, keep in mind that you’ll need a special process to make an offer, since the property will be sold through an executor or attorney.
Get in Touch with Out-Of-State (OOS) Owners: Whatever the reason is for them moving to another state, some homeowners struggle to maintain the properties they can’t visit often. The result is distressed properties with highly motivated sellers. You can identify these people through direct mail or networking.
Check City Records for Code Enforcement Tickets: A property getting numerous tickets for neglect is a sign of an owner not taking care of their property and may be interested in selling.
Distressed properties are the perfect choice for house flippers since your goal is to acquire undervalued properties with the highest flipping profit. By buying valuable properties at a low price point, you’ll set yourself up to gain a large margin for a profitable fix-and-flip project.
What is your experience with buying distressed properties? Do you have any tips on successfully flipping them for a high profit?
Like everything else, the real estate industry has drastically changed during the pandemic. The combination of people trying to avoid foreclosures and digital transformation allowing every real estate investor to tap markets nationwide has resulted in the rise of virtual real estate wholesaling—a trend that is likely to continue post-pandemic.
In fact, the National Association of REALTORS® said 51% of home buyers today found their home online—more than they do through real estate agents! This means there are many people out there who are willing to buy and sell homes online. Therefore, the virtual wholesaling process is an opportunity for you to take advantage of the digital transformation happening in the real estate industry.
Are you interested in becoming a virtual wholesaler? Here’s what you need to know.
The Benefits of Virtual Real Estate Wholesaling
Virtual real estate wholesaling follows the same idea as traditional wholesaling, except your involvement is completely done through digital means. Using digital technologies such as emails, digital signatures, and online databases, you can close wholesale real estate deals without showing up in person.
Here are the three biggest benefits of this arrangement:
Expand to Multiple Markets: You can venture into multiple new markets without increasing your costs, making your wholesaling business scalable. Operate in the hottest markets, grow your buyers list, and even use digital marketing strategies to expand your business.
Save Precious Time: It takes weeks to visit all the properties you want to wholesale. With virtual wholesaling, however, you can check out multiple locations in a day. Chat with motivated sellers and make blind offers in varied investment areas easily.
Build a Virtual Team: You can build a virtual network to operate your wholesaling business online. Bring in real estate agents, virtual assistants, contractors, and vendors to help you analyze and close deals in all the markets you want to sell in.
All of these real estate investing benefits sound great, but can you really operate without physical appearance? Let’s take a look.
The Steps to Virtual Real Estate Wholesaling
Here are the points in the home buying process when physical presence is typically required:
Scouting areas with real estate agents
Negotiating with motivated sellers
Inspecting and conducting due diligence
Estimating the repairs
Your goal is to turn these points into digital processes. How?
Use Websites to Find Profitable Areas: Use Mashvisor’s heat map for analysis. As they say, in the real estate industry, it’s all about location, location, location. You won’t need to meet with real estate agents when you can do initial research yourself.
Use Websites to Connect with Sellers: Instead of elbowing your way through the MLS, Mashboard provides homeowner data for you to contact the potential seller. Through this tool, you can get their property address, email address, and phone number to start negotiating.
Use Virtual Walkthroughs: Browse through Zillow and you’ll see properties that offer virtual tours. If the property you’re eyeing is there, book a digital tour to simulate a walkthrough and check the property out. If the property doesn’t have a virtual tour, you can tap your virtual wholesaling team to conduct due diligence.
Conduct Real Estate Analysis: Once you find a good deal, conduct real estate investing analysis to ensure that the after repair value (ARV) and estimated repair cost (ERC) is favorable to market prices. Run comps for the ARV through Zillow or Redfin, and use online calculators by Home Advisor or Kukun to get the ERC.
Use Digital Apps to Sign Documents: Got yourself a wholesale deal to close? Download Docusign and DotLoop to sign the real estate contract electronically, send it through email, and get the property under contract without any physical contact.
Lastly, collect your wholesaling fee either by including it as a line item on the settlement statement, or having the buyer send you a check. Either way, you can do this without meeting anybody in person.
Becoming a virtual wholesaler allows you to tap into lucrative markets with tremendous flexibility and agility. As our world evolves into a highly digitized system, virtual wholesaling is your opportunity to take advantage of digital transformation and get ahead of your competitors—expanding your wholesaling business in all possible locations.
Any other tips or tools for virtual real estate wholesalers?
Remember Carlton Sheets—that real estate guy who was always on TV in the late 1980s?
He was a legend in the industry, and one of the key influencers who popularized real estate wholesaling. He had a course on wholesaling that customers took through a toll-free phone number, where his iconic line encouraged people, “You can get started in real estate with no money!”
Sheets isn’t as famous nowadays, but the excitement he created for wholesaling is still alive and well. He inspired many people then and now to get involved in real estate wholesaling even if they didn’t have any background in it.
While the process can differ from case to case, the typical wholesaling procedure goes like so:
People get into wholesaling because it sounds so simple, but they don’t realize how difficult it is. While all beginners will face common pitfalls and inevitable challenges, our goal is to equip you with the knowledge to tackle them, head-on.
Read on to learn the seven things beginner wholesalers should know before getting started!
1. Generating Wholesale Leads is Harder than You Think
Most people read about real estate wholesaling and think it’s easy, as there’s little capital involved in the investment. However, research shows that most real estate agents fail in their first year because they can’t find enough good deals or buyers.
The reality is that generating wholesaling leads is difficult. And, like new real estate agents, most new wholesalers don’t have a network and don’t spend enough time building one.
Beginner wholesalers will typically call all their friends and family, get a deal or two, and immediately exhaust their options. Relying on friends and relatives isn’t a scalable strategy, so many wholesalers get through their first year and quickly fizzle out.
That’s why the most important thing to know as a new wholesaler is how to generate deals and build a pipeline that provides a consistent flow of deals.
Here are six of the ways you can generate wholesaling deals:
Make time to drive by neighborhoods and find distressed properties
Make your own website or Facebook page to get inbound deals
We’ve gone over the details of these methods in our article about finding wholesaling dealsif you want to know more about the specifics of each one.
Once you get some momentum going, you can also hire an assistant to help you make offers, find listings, and close deals.
With your deal generation system set up, the next step is to learn how to analyze the deals properly, because…
2. Analyzing Deals Correctly Will Make or Break Your Success
Wholesalers need to position themselves as expert deal finders who make buyers’ lives easier. Your goal is to build a good reputation for yourself and establish your business towards growth and expansion.
To do so, you’d need to learn how to properly analyze wholesaling deals and become a master in creating value for buyers and investors.
Here’s how to accurately analyze your deals:
Determine the After Repair Value (ARV): Run comparables (comps) in the area using websites such as Zillow or Redfin to see how a property will be worth AFTER it’s been fully renovated (AKA the “after repair value”). Comps are the properties within ¼ – ½ a mile of your property that are of similar size, type, beds/baths, and age, and have sold within the last 6 months.
Here’s the formula for determining your ARV:
Evaluate the Estimated Repair Costs (ERC): As properties for wholesaling are often distressed, you need to understand the rehabilitation costs to know whether or not a particular property is really a good deal or not.
Here are some quick tips for estimating the repair costs accurately:
Finalize the Ideal Purchase Price (The 65% Rule): After determining your ARV and ERC, you’ll now calculate the ideal purchase price for your investment property. You can use The 65% Rule to compute this, where the formula is as such:
The 65% Rule is the wholesaler’s adaptation of the flipper’s 70% Rule—a rule of thumb that tells the flipper to purchase properties at a maximum price of 70% of its ARV. As a wholesaler, you can have a 5% difference that enables you and the buyer to make a profit—especially when you’re selling to flippers. Investors are likely to steer clear from a price that is more than 65% of the ARV (minus the ERC).
Keep in mind that the opposite is true: if you don’t know how to analyze properties and offer great deals, you will struggle with building your reputation and growing your network of buyers and investors.
3. Having the Right Documents and Contracts is Key
Wholesaling is basically buying and selling contracts, so getting this part right is pretty important! However, a LOT of new wholesalers don’t even have the appropriate paperwork in place before getting started, and that can lead to them getting burned.
Let’s take a look at the key factors a wholesale contract needs to have:
The Wholesale Real Estate Assignment Contract: This is the legal document that makes it possible to transfer the right to purchase a property from the wholesaler to an end buyer. Once you and the seller enter an equitable conversion (making the eventual buyer the owner of the property once they sign the contract), you need to draft an Assignment of Real Estate Purchase and Sale Agreement:
The Assignment of Real Estate Purchase should have a copy of the original purchase and sale agreement between you and the seller, informing the end buyer of all the terms, contingencies, conditions, and payment terms involved in the deal.
The Sale Agreement should say that the buyer will purchase the home from the seller and assume property ownership—effectively absolving you from all responsibility.
The Wholesale Real Estate Purchase Agreement: There are many components in this agreement. The Wholesalers Toolbox have shared their templates to get you started on your contracts and agreements. There are also other sources you can find on the internet, just make sure that include the parts highlighted in this sample:
Make sure you have all of this in place before finding your first deal so you don’t waste time or end up scrambling to pull the documents together when an opportunity comes along.
4. Keep Your Profit Margin Private by Following the Double Closing Technique
The double closing technique in wholesaling is a popular strategy, because it allows you to keep your wholesaler fee private. In other words, it lets you hide your profit margin. You won’t have to explain to potential buyers about the price differences between your contract and the seller’s, thus saving you the headache of being cut out of the transaction.
This method contrasts with contract assigning because you won’t have to purchase the property—you only facilitate the transferring of contracts. In a nutshell, the technique is closing two independent deals that happen almost simultaneously, sometimes within a few hours or weeks. One of them is with the property’s original seller, and another is with the end buyer.
As the wholesaler in both these transactions, you need to treat them as individual deals with their settlement statements:
Statements with the seller are referred to as HUD-1, and outlines the purchase price you have negotiated and settled on. HUD-1 includes any prepaid interest charges, homeowners’ insurance fees, title insurance, property taxes, and closing agent fees.
Statements with the buyer identify the final purchase price you have agreed to sell the property. This deal is contingent on the first closing with the original property owner.
For more information on this technique, you can visit here. But simply put, the process goes like so:
It’s not rocket science, but it does take a lot of leg work. There is also the stress of indecisive parties, people backing out suddenly, and aligning the schedules of everybody involved in the deal.
The double closing technique is a good alternative to contract assigning, especially when used as an exit strategy. Of course, you would need to put “more skin in the game” by taking legal possession of the property for all of five seconds, but if contract assigning doesn’t work, double closing can increase the chances of a deal transpiring.
5. How to Turn Any Lead Into a Deal
Now, how do you handle “imperfect deals” or deals that seem tough to profit from?
The good thing about real estate investing is that there are many ways in which you can still make a profit. As long as the seller is motivated, you can find a way to make money off the property.
For example, if the seller owes more than the house is worth (i.e., upside down in the mortgage), you could find a lender that will agree to wholesaling the property as a short sale. These deals are rare but entirely possible.
Here are two nontraditional ways to wholesale a short sale property:
Buy in a Land Trust: This agreement is where a Trustee agrees to hold the property title for the benefit of other parties, known as the Beneficiaries. The name you’ll put in the purchase contract is the Trustee (the primary buyer). The buyer will then submit copies of the trust documents to the bank, as lenders will require the buyer’s LLC documentation to be submitted along with the offer. Once you get to closing, the beneficial interest of the trust gets assigned to the end buyer for a wholesaling, assignment fee.
Create an LLC: You can also create an LLC with the end buyer (typically costing anywhere from $100 to $500), buy the property as an LLC, and sell it to the end buyer. The LLC’s name on the short sale approval letter will not change when the buyers change hands, and you’ll still charge a wholesaling fee.
Alternatively (and, if you ask me, the better way to earn money from real estate long-term), you can take ownership of the property and turn it into a cash flow generating rental. Thus, you’ll extend yourself into becoming a rental property investor—and still make money off the property.
6. Adapting to Shifting Markets is How to Scale & Sustain Your Wholesaling Business
Just like any other business, you need to stay updated with market shifts that affect your business. Real estate is a dynamic industry that requires you to spot market trends early, collect relevant insights, and adjust the way you conduct your wholesaling business constantly.
Take the recent pandemic, for example, that changed the industry for years to come. We noticed four trends for wholesalers to keep watch of to stay successful in 2021 onwards:
Work-from-home Becoming Mainstream: Many office workers move out of dense cities and into residential areas with more freedom and space. Wholesalers, therefore, need to pay more attention to the rural areas where buyers are now increasingly interested in.
People Upgrading Their Current Homes: With the pandemic forcing people to stay indoors, people are now willing to invest in comfortable homes with larger rooms, backyards, bigger patios, and more. Wholesalers need to pay attention to the evolving preferences of homeowners and their heightened attraction to certain home features.
More People Purchasing Homes: Interest rates hit an all-time low in 2020, and the forecast for 2021 reflects similarly. With these low mortgage and interest rates for properties, people want to own homes more than before. While wholesalers will have a harder time finding properties, determined wholesalers that do secure homes will sell faster and at top dollar.
Decrease in Housing Inventory: Given the ongoing transmission of COVID-19, people have put off selling their houses to minimize contact with strangers. Competition within the housing market then increases—decreasing the chances of wholesalers getting properties at a discount. Nevertheless, it also makes exiting deals much easier and at a higher profit—where supply is low, demand is high (due to low mortgage rates), and home prices are soaring.
The pandemic might be a one-time thing, but disruptions and changes will always happen in the industry. The only thing constant is change—which means wholesalers should stay updated!
Wholesaling real estate is deceptively easy… And it is if you know what you’re doing.
With these in your back pocket, you can be just as excited as Carlton Sheets about real estate investing. You’ll have the knowledge required to truly become a successful wholesaler and “start on your own path toward financial independence” today.