Wholesaling

[Angela Sullivan]

I am just getting back into real estate. I am interested in wholesaling to build some capital. Can anyone tell me how I get started? I understand the concept but I have questions about how I find the investors for the property and better yet how do I find these properties to put under contract? 

Thanks!

[Jackie Lange]

Keep in mind that you don't have to always sell the house for cash.  Here's another example of a deal I did:

Just 9 days ago, I got a call from a lady who inherited a property.She was ready to just give it back to the bank because the property needed repairs and she had two sales fall through.She was frustrated and at her wits end!Did I mention that she lives 4 hours away from the property!

I explained that I was not interested in buying the house but I had several ways I could help get it sold quickly.Because I’m not a real estate agent ( and would not take a license if they were giving them away) I needed to get a contract to buy the house to be able to sell it and still make a profit.The contract gave me an equitable interest in the property.It also stated that my plan was to resell the house within 7 days and if I couldn’t I would cancel the contract.

How much money did I put up to get the option?Not a penny! Zero!Zip! Nada!

My option price was $53,500 which was the underlying loan balance.There are only 15 years left on the mortgage.The house is worth $120,000 fixed up.It needs about $7,000 in repairs to be in top-top shape.This is a two story house.It’s a 4 bedroom + office, 2 bath, 2 car oversized garage house on about 1 acre.It also includes a separate 2000sf metal building with an office.It even has a view of a lake from the 2nd floor.

The seller and I agreed that ideally I’d find a cash buyer so the underlying loan would be paid off.She didn’t want to deal with making payments any more.So I arranged for some private lenders to finance the purchase.

But I also explained to her that we’d get a better sales price if we offered seller financing.The seller agreed that for the right buyer with a good down payment, it would be ok to sell with seller financing that wraps the underlying loan.

I ran ads on craigslist that I was having a 1 day open house and the property would be sold to the HIGHEST BIDDER.I also sent out an email to everyone on my buyers list to let them know about the open house.

The offers started coming in right away.I got 7 offers for the property.

The best offer was for $66,000 with $12,500 down.

This is an owner occupant who is thrilled to get the opportunity to buy a house without getting bank financing.

The attorney charged $500 to close which left a $12,000 profit on a house I did now own and did not have any money invested in.

That’s how you make money without risks!

Oh, and did I mention that there will be a nice CASH FLOW every month between the difference in the monthly payment I collect and the monthly payment I make to the underlying lender.

What’s the worst that can happen?The buyer fixes up the house, stops paying me, then I get to sell the house AGAIN for even more.

If you think these kinds of deals don’t exist in your town, think again!Do people die in your town?Sure they do.And I assure you that the last thing the heirs want is to deal with a property they don’t want… especially a house that is far away.

Other things that cause sellers to be motivated – they lose jobs, get sick, get divorced, legal issues, outgrow the house, etc…

Does any of that happen in your town?You bet it does?That’s why I can say these kinds of deals are all around you!

Some of the best deals are when the house just needs a lot of repairs.But guess what, you won’t find many of these in the “nice” neighborhoods.That means that you’ll have to get out of your comfort zone and drive around neighborhoods on the other side of town or in areas where you would not normally go if you want to find opportunity.

Like I said before, you can’t be successful at a real estate business if you’re just sitting at home in front of the TV or the computer.You need to get out there and drive neighborhoods.Knock on doors.Talk to people.You need to learn to do marketing which will get a steady flow of leads coming in to you too.You need to “get the word out” that you’re looking for motivated sellers.The more you do, the more deals you’ll do!

This really can be easy, if you’re willing to devote the time to learn and implement what you learn at CashFlowDepot.com

To Your Success,

Jackie Lange