It"s All About the Wholesale
Wholesale Profits With Limited Risk Minimal Risk + reward = profits.
It's a simple formula for success, but if you're ready to baby step towards becoming a true investor, wholesaling should be your next step.
The key to your success as a wholesaler is in finding people who are motivated to sell their homes.
A lot of people may want to sell, but they shouldn't be your focus.
When a seller isn't financially under the gun they are more inclined to hold out for the perfect offer to come in.
The best deals are those that come from people who for one reason or another have determined that a quick sale is in their best interest.
Abandoned properties are excellent targets for your initial steps into wholesaling.
They usually have distressed owners and these properties are usually in far from pristine condition.
Even if the neighborhood is somewhat desirable, you'll be less likely to face stiff competition when buying one of these properties because most buyers are interested in houses that are ready to live in.
When you're wholesaling you actually put a property under contract yourself and then assign that contract to an investor interested in purchasing and rehabbing the property.
Before you get too carried away and start indiscriminately putting houses under contract, you should give some thought to how you're going to dispose of them.
Without an exit strategy, you'll be required to close on the property.
To keep this from happening, build a list of possible buyers for your properties.
If you're thinking you won't be able to find buyers, think again.
Your local REIA is loaded with investors foaming at the mouth for good investment properties.
If you buy smart and at the right price, you'll have no trouble finding buyers for your contracts, assuming that the deal you have available makes sense to the investor.
In addition to your REIA, you can let the power of the internet help you find buyers for your contracts.
Craig's List and other real estate investing websites have lists of investors wanting to buy.
You can use a pretty simple formula for analyzing whether a deal makes sense to you as a wholesaler.
Take a figure equal to 60% of the property's LTV (Loan to Value) and subtract your repair estimate, closing costs, and the amount you want to profit from the deal to arrive at the maximum figure you should pay.
If you can buy for less you have a bigger profit left over for you or an even better deal you can take to an investor.
You're going to want to be able to accurately get a handle on what your true costs will be.
Before you make an offer, go through the house and determine what it will cost to rehab the property.
Don't forget to factor in a profit margin for yourself and allow for holding and closing costs.
It's also critical that you have a firm grasp on what resale prices are, so know your area well.
If you do all these things you should find that wholesaling can be a ready source of cash.
Wholesalers can regularly turn a profit of up to $10,000 - or more - from just a few hours of work.
Doesn't that give new meaning to the phrase "on the job training"? Once you've mastered the educational principles of wholesaling, you may think you're ready to dive into rehabbing.
Before you do, learn what you're doing.
Failure to fully understand all of the components to profitably rehabbing a property can mean some very costly mistakes.
If you place a high value on your finances, tread very carefully.
It's a simple formula for success, but if you're ready to baby step towards becoming a true investor, wholesaling should be your next step.
The key to your success as a wholesaler is in finding people who are motivated to sell their homes.
A lot of people may want to sell, but they shouldn't be your focus.
When a seller isn't financially under the gun they are more inclined to hold out for the perfect offer to come in.
The best deals are those that come from people who for one reason or another have determined that a quick sale is in their best interest.
Abandoned properties are excellent targets for your initial steps into wholesaling.
They usually have distressed owners and these properties are usually in far from pristine condition.
Even if the neighborhood is somewhat desirable, you'll be less likely to face stiff competition when buying one of these properties because most buyers are interested in houses that are ready to live in.
When you're wholesaling you actually put a property under contract yourself and then assign that contract to an investor interested in purchasing and rehabbing the property.
Before you get too carried away and start indiscriminately putting houses under contract, you should give some thought to how you're going to dispose of them.
Without an exit strategy, you'll be required to close on the property.
To keep this from happening, build a list of possible buyers for your properties.
If you're thinking you won't be able to find buyers, think again.
Your local REIA is loaded with investors foaming at the mouth for good investment properties.
If you buy smart and at the right price, you'll have no trouble finding buyers for your contracts, assuming that the deal you have available makes sense to the investor.
In addition to your REIA, you can let the power of the internet help you find buyers for your contracts.
Craig's List and other real estate investing websites have lists of investors wanting to buy.
You can use a pretty simple formula for analyzing whether a deal makes sense to you as a wholesaler.
Take a figure equal to 60% of the property's LTV (Loan to Value) and subtract your repair estimate, closing costs, and the amount you want to profit from the deal to arrive at the maximum figure you should pay.
If you can buy for less you have a bigger profit left over for you or an even better deal you can take to an investor.
You're going to want to be able to accurately get a handle on what your true costs will be.
Before you make an offer, go through the house and determine what it will cost to rehab the property.
Don't forget to factor in a profit margin for yourself and allow for holding and closing costs.
It's also critical that you have a firm grasp on what resale prices are, so know your area well.
If you do all these things you should find that wholesaling can be a ready source of cash.
Wholesalers can regularly turn a profit of up to $10,000 - or more - from just a few hours of work.
Doesn't that give new meaning to the phrase "on the job training"? Once you've mastered the educational principles of wholesaling, you may think you're ready to dive into rehabbing.
Before you do, learn what you're doing.
Failure to fully understand all of the components to profitably rehabbing a property can mean some very costly mistakes.
If you place a high value on your finances, tread very carefully.
