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Wholesaling

Wholesaling

REI eTutor

What is Wholesaling?

Buy at a discount. Sell at a discount

Wholesaling

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Benefits of Wholesaling

No money down investing

Earn cash today

Easiest method to enter the real estate market

Wholesaling

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How to Make Money WholesalingEquitable rights

Allows you to market propertyProperty is marketed to investors (rehabbers)

or landlordsMoney is made between your purchase price

and end-buyer’s purchase price

Wholesale

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How To Make Money Wholesaling

Two methods to close wholesale dealsAssign your contract

Have a double closing

Wholesaling

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Assigning Your ContractWhat is a contract assignment?

Assigning your right for someone else to buy the property.

Original contract should contain the language “and or assignee”

All contracts are assignable unless otherwise stated.

Wholesaling

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Assigning Your ContractBenefits

No closing costs Simple one page assignment

Pitfalls Everyone involved in the transaction knows your

profit

Wholesaling

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Double ClosingTitle company of law firm handles both

closingsYour close with the end buyer firstYou then close with the sellerYou are handed a check for the difference

Wholesaling

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Double ClosingIs this legal?

Yes!Benefits

Profit is hiddenPitfalls

Cost of the closing

Tip: Only use in situations with a large profit margin and have a title company or law firm lined up ahead of time.

Wholesale

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How to WholesaleStep 1: Locate a Seller (Not a Property)Step 2: Analyze the LeadStep 3: Make an OfferStep 4: Property InspectionStep 5: Contract (Negotiation)Step 6: Find a BuyerStep 7: Closing

Wholesale

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Locate a Seller (Not a Property)Goal is to find a motivated seller

Properties are not motivated Properties are no good if you can’t find the seller

Psychology of the Seller Why is the person selling the property What are his/her needs

Wholesale

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Locate a SellerBandit signsWebsiteCraigslist adsE-lettersYellow Letters

Wholesale

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Analyze the LeadDoes this property have wholesale potential?If yes:

What are the estimated repair costs What is the As Repaired Value (ARV) What would an investor pay for the property?

Your offer must be lower than what the investor would pay.

Wholesale

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Analyze the LeadIf no:

Would this home be worth rehabbing? Would the seller be interested in owner financing? Would the seller be interested in a lease option?

Wholesale

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Make an OfferDepending on the property, have an offer

available for each type of scenarioIf your offer is rejected:

Find out what amount they are looking for If realistic

Adjust your profit if you feel the property can sell fast Perform a property inspection to see if the numbers

can be adjusted Always mail a written offer to the seller even if rejected

Wholesale

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Property InspectionWe highly recommend inspecting the

property either during or immediately following the offer phase. Why? Avoid wasting time with sellers who are not that

motivated.What to look for?

Structural damage Roofing repairs Curb appeal potential Interior cosmetic repairs

Wholesale

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Property InspectionLook for:

Illegal additions Placement of electrical and gas meters Functionality of floor plan

Wholesale

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Property InspectionTake tons of photosTake 30 to 50 photos

Outside angles Every room Every closet All damages

Two Purposes You never want to revisit a property to double check

something Can email pictures to potential buyers

Wholesale

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ContractPresent the seller with a contract when:

Verbal agreement of offer or Mail a contract if offer is denied but the seller is motivated

***Use Our Contracts as a Sample Only***Avoid losses by having your contract reviewed by

an attorney. We are NOT lawyers Contracts may have to be worded differently depending on

your location

Wholesale

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Find a BuyerBuyer’s lists are important!

Don’t have one? Start one today!If you have a buyer’s list

Put together an email package Property location Photos (Interior and Exterior) Comps

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ClosingInterview title companies or law firms for

closingsMake sure they do double closings so you

have this option available.Enjoy the profits from all of your hard work

Conclusion

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REMEMBEREvery Offer Does Not Result In A Deal But

Every Deal Is The Result Of An Offer