how to build a part-time or full-time business wholesaling properties
TRANSCRIPT
Advanced Wholesaling Strategies:
How to Build a Part-Time or Full-Time Business Wholesaling Properties
Today’s Goals:
To give you the “bigger picture”—how to move from wholesaling deals to having a business that wholesales deals
To ensure that you understand: The wholesaling business Why you get paid to wholesale
properties The key skills you’ll need to have or get
Today’s Goals:
To share the different lead sources you’ll have to use for buyers and sellers, and in what markets
To get you started “systemitizing” your business and hiring VAs and others in operating it
To share other ways of making money wholesaling—like financing deals for your buyers
Learn to do it
Do it
Systemize it
Passivize it
The big picture
The Big Picture:
Learn to do it: Get a quality home study program or
seminar Study it thoroughly Understand the business, the customers, the
process, the paperwork Do it:
Talk to sellers and buyers Look at properties Evaluate deals Make offers
The Big Picture:
Systematize it: Create step by step processes and
checklists for what needs to be done to make a deal happen
Passivize it Hire other people to run the systems!
Why Bother?
Because as a “wholesaler”, you: Limit your income to the deals YOU have the
time and energy to do Rarely have time to work on the “important but
not urgent” things in your business As the owner of a wholesaling business,
you: Can do unlimited deals Move into multiple markets Step away from the business, and it still makes
money!
Because of this…
income$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
Learn it
Do it
Systemize it
Passivize it
Convinced Yet?
So far in 2013, my business has Put 29 properties under contract Sold 27 of those 29 Generated $203,000 in gross income
And I have 3 other businesses! What could YOU do?
What Wholesalers Do:A Review
We FIND MOTIVATED SELLERS Of the kinds of properties other investors
want: bread and butter and rental properties We EVALUATE those deals
What’s the ARV? What are the repair costs? What’s a good price for an investor/buyer?
What Wholesalers Do:A Review We TIE UP the property with a purchase
contract At a price LOWER THAN the one at which we
can sell to a buyer With “out” clauses so we don’t have to buy
We FIND A BUYER for the deal Who can pay cash for the FULL purchase
amount
What Wholesalers Do:A Review We ASSIGN THE CONTRACT
With an iron-clad assignment agreement For a cash payment of $5,000-$20,000 Our buyer closes with our seller
What Wholesalers Do NOT Do
We do not “sell properties” (unless we close them first)
We do not “put buyers and sellers together”
We do not “take orders” from buyers We do not market deals that we don’t
have a legal interest in via a contract to purchase
WHY do you get paid so well?
Because you SOLVE PROBLEMS Desperate sellers can get rid of properties
fast, and for cash, and without a lot of fees or paperwork
Investor/buyers can get the same deal they would have negotiated for themselves—without the hassle
How do you bring value?
Because you’ve TRAINED yourself… To find those desperate sellers To understand your buyers To correctly evaluate a deal from the
buyer’s perspective To handle the paperwork correctly and
with no hassle to your buyers and sellers
Key Skills to Master
1. Understanding what makes a good deal for your buyers
2. Finding deals3. Evaluating deals4. Negotiating deals5. Selling contracts
Why we do it:
CASHIt’s quick (<30 days) It’s SIMPLE (no rehab, no tenants)It requires relatively low skillsIt makes money on deals that don’t
otherwise “fit”
Why we do it
Daytona Ave, Westwood
7 rm 3 br retail property
ARV $110,000Repair costs
$40,000
Why we do it
Contract price $23,000
Contract sale price $33,000
Time from contract to sale of contract: 2 days
Assignment fee: $10,000
Why our SELLERS do it
Estate propertyOut of town
heirsNeeded major
updatingSeller “didn’t
need the money”, did need a 30 day close
Why our BUYERS do it
Has a full-time job
Renovates 2-3 properties per year
No time/desire to make 20 offers to get 1 deal
Why our BUYERS do it
Paid: $33,000Repairs: $40,000Holding & sales
costs $7,000Total:$80,000Sale price:
$100,000Profit: $30,000
How to Get Paid MORE, part 1Bring More Deals to the Table
From motivated sellers directly From banks From Hedge funds and other bulk
buyers
Understanding “Supply and Demand” in the Wholesale Market
“Supply” generally refers to LISTED properties
There are ALWAYS motivated sellers in any market
There are ALWAYS investors looking to make money in any market
Vena’s Totally Unscientific Supply and Demand Chart
2003 2005 2007 2009 2011 20130
1
2
3
4
5
6
7
8
9
Not enough buyer, too
many deals—lower sale
price
Too many buyers, not
enough deals—Raise
sale price
SupplyDemand
Vena’s totally subjective supply and demand chart
2003 2005 2007 2009 2011 20130
1
2
3
4
5
6
7
8
9
Focus on finding buyers
Focus on finding sellers
SupplyDemand
Why “Sellers Markets” Are Awesome
Most investors—your buyers—ONLY know how to find properties that are offered TO them MLS properties FSBOs Sheriff’s sales/auctions etc
How to Find Deals When There are “No Deals”
In a weak market, you focus on developing buyers
hot market (or bubble) you focus on: Finding off-market properties On-market properties in weak
segments
Understanding “Supply and Demand” in the Wholesale Market
2011
Bank owned/on market
bank owned/off market
Bulk owned
Seller direct
referral/other wholesaler
2013
Bank owned/on market
bank owned/off market
bulk-owned
seller direct
referral/other whole-saler
How to Get Paid MORE
Understand how to do MORE KINDS of deals
6 Kinds of Sellers:Non-represented individualsRepresented individualsBank/listedBank/directHUDHedgefunds
6 Kinds of Sellers:The differ in:
How they’re found How negotiations are carried out What contract is used How they can be assigned
And they each have their own pros and cons!
Non repre-sented Seller
Repre-sented Seller
Bank Listed
BankDirect
HUD
Hedge funds
Found by:
Marketing
MLS/Agent
MLS/Agent
Relation-ship
HUDHomestore.com
Public record, internet
Negotiat-ed by:
Discussion
Thru agents
Contract Discussion
Con-tract
Discussion
Whose Contract
Yours Agent’s Agent’s+Addendum
Yours HUD’s
Theirs
How to Assign
Simple assignment
Simpleassignment
Trust method
Simple assignment
Trust Simple assign
Non represented Seller
Represented Seller
Bank Listed
BankDirect
HUD Hedge funds
Pros: -Easiest to negotiate with- Minimal competition
-Easy to find
-Easy to find- No emotional attachment
- Poten-tial Multiple Proper-ties
-Easy to find- Easy to make offers
-Potential multiple-No emotional attach-ment
Cons: -Must invest in marketing to find-Seller squirrliness
-Dealing with agents- Com-petition
-Com-petition-No assignment-High earnest money-Proof of funds
Limited inven-tory
-First look- No inspec-tion period
-super-fast close-No inspection period
The Real Estate Goddess’s Guide to Wholesaling Real Estate
Your Step-by-Step Guide to Big Profits in Wholesale Real Estate
The Real Estate Goddess’s Guide Shows YOU
All the basics, step-by-step, so that even a brand-new investor can wholesale a deal for a $5,000-$15,000 profit in 30-60 days
The 8 best ways to find motivated sellers, so that you can fill your pipeline with great deals to sell
How to interview and build rapport with sellers, so you can be comfortable making lowball offers
The Real Estate Goddess’s Guide Shows YOU
How to screen leads in minutes, so you don’t waste your precious time with sellers who can’t or won’t sell
How to find the “ARV”, even when there are no comps
How to inspect properties like a pro, so that you really understand what needs to be done from you buyer’s point of view
The Real Estate Goddess’s Guide Shows YOU
How to estimate repair costs, so you ALWAYS make the right offer
How to “do the paperwork” so that you never HAVE to buy a property you can’t sell, but still have the deal tied up so you can make money
How to find a buyer fast, so that your checks start rolling in immediately
The Real Estate Goddess’s Guide Shows YOU
How to assign the contract and get paid BEFORE the closing…
What happens at the closing...What to do when something
“goes wrong”…All the details you need to wholesale your first deal, or wholesale MORE deals, and change your financial future
GUARANTEED!
The Real Estate Goddess’s Guide Comes With:
Your detailed course manualThe 18-hour audio training courseAll the forms and contracts you need
on CD3 months of email coaching on your
deals
Your investment
$699$1,398But today only, for you
only, $699
The “Risk Reversal” Guarantee
Try it for 30 DaysIf the detailed, real-world techniques
don’t make you at least 10x your investment, return it for a full, no-
questions asked refund!
How to WholesaleBank-Owned Properties
Why wholesale REOs?
Lots of availability Easy to find and view No emotional investment by the
seller Why not?
The Challenge to Wholesaling REOs
Proof of funds requirement Minimum earnest money
requirement The Addendum Restrictions
How to Overcome…
Proof of funds/Pre-approval requirement
1. Get proof of funds or pre-approval2. Get a pre-approval letter from a
private lender, transactional funder, or hard money lender
How to Overcome…Minimum earnest money requirement1. A check is NOT required to make an
offer2. Check must be “made good” at
acceptance3. Acceptance=
purchase contract signed by both parties
Addendum signed by both parties4. Get the money from your buyer or a
partner
How to Overcome
The Addendum Restrictions in the INSPECTION PERIOD
Sell or get out before drop dead date Non-assignability
Use the land trust method No disclosure of code violations etc
Check for yourself
How to OvercomeThe Addendum Utilities not turned on
Assume EVERYTHING is bad Their choice of title company
“Closing will be coordinated through [your title company]”
No title warranties Get title search/insurance
FNMA only-deed restrictions on resale Ask for waiver Don’t worry about it
How to Use Land Trusts to Avoid Double Closings
1. Sign purchase contracts “as trustee”2. When you find a buyer, create a land
trust with the buyer—or his company—as beneficiary
3. Go to the closing as trustee to sign all the docs; buyer brings the check
4. Your profit is paid outside of closing as a fee to the trustee
5. Get fired or resign as trustee
The Result
You assign the TRUST, not the contract The person who signed the contract—
you, as trustee, is the buyer
How to Finance Deals for Buyers
Financing Deals for Buyers (without using your own cash)
What it is: Using creative finance concepts
(subject to, owner financing, private financing) in conjunction with wholesaling
GETTING financing when you buy so that you can OFFER financing when you sell
Why Finance Deals for Buyers?
1. Because you can work with more buyers
2. Because you will earn more money on each deal
3. Because you will sell your deals faster and with less effort
Case Study
Out of town owner, unhappy with management company
House rented for $695/mo
Case Study
ARV $45,000X .6
$27,000-$3,000
turnover$24,000 sale
price
Case Study
Offer to seller:$17,000$3,000 down$239/mo for 5 years6% interest
Case Study
Sale price:$27,900$10,000 down$362/mo for 5 years8% interest
Buy/Sell Comparison
Buy Sell Profit
Downpayment $3000 $10,000 +$7,000
Interest 6% 8% +2%
Payment $270 $362 +$92/mo
TOTAL +$12,948!
Rules to Follow
1. Do NOT do “no money down” with your buyer
2. Do NOT step out of a deal3. Protect YOURSELF
1. Sell to very experienced, trustworthy buyers2. Give yourself a way to get the property back
quickly and easily4. Make your buyer’s balloon at least 3-6
months BEFORE yours5. Don’t let your buyer’s payoff fall below
yours
How to Systemize & Hire
Why you need to hire people
1. There are things in your wholesaling business that make money, and things that have to be done but don’t make money
2. You can’t grow significantly without assistance
3. You can never “retire” until you have a real business
Things you need to hire people
1. A clear idea of what you need done
2. Systems for doing them3. A clear idea of what skills
the employee or contractor will need
Your hires
1. Outside team People you need to make deals happen,
but that are independent contractors Your agent, title company, attorney, CPA
etc2. VAs3. Inside team
People who work only for you, run your systems, are on payroll etc
Acquisitions coordinator, administrator, sales coordinator, personal assistant etc
What needs to be done that can be done by a VA?
Get listsSend marketingDo initial seller screeningsRun compsCall for ordersSet up showingsSend and follow up on contractsOrder title searches and other
due diligencePost ads
What needs to be done that can be done by a VA?
Get listsSend marketingDo initial seller screeningsRun compsCall the building departmentSet up showingsSend and follow up on contracts
What needs to be done that can be done by a VA?
Order title searches and other due diligence
Post adDesign logosSet up QuickbooksKeep your books set up your website
Create content for your siteCreate fillable .pdf forms???
How to Hire a VA
Use a service Odesk.com HireMyMom.com eLance.com
Post your jobInterview the bidders (via skype etc)
Give them the system, ask them to run it once
Hire them
But to Hire, You Need SYSTEMS!
Systems and Checklists
What they are:WRITTEN documentsKeep you organizedAllow you to hire others to do parts of your business
Sample systems:
What they are:WRITTEN documentsKeep you organizedAllow you to hire others to do parts of your business
The Real Estate Goddess’s Guide to ADVANCED Wholesaling
How to do more deals, better deals, easier deals with less effort!
Advanced Wholesaling Shows YOU
Chapter 1: How and why to build a wholesaling business—including what a real business does and does for you
Chapter 2: Systems and processes for your business—including ALL of mine, on CD
Advanced Wholesaling Shows YOU
Chapter 3: How to hire the help you need—who to hire, how to hire, job descriptions, management, and non-competes
Chapter 4: Creative Wholesaling how to finance deals for your buyers
Chapter 5: How to Legally Minimize Taxes on your wholesale deals by John Hyre, Esq.
Advanced Wholesaling Comes With:
The detailed course manual 10 hours of online training All the forms, systems, and contracts
online
Your Investment:
$699
Same Great No-Risk Guarantee!
If you’re not THRILLED (and convinced it will make you a fortune), I’ll give you your money back!
Get Both, and Get…
The LAST* Hands-On Wholesaling Academy
August 22-25, Cincinnati
*for at least a year
What You WON’T Learn… “How to Wholesale a House”
What You WILL Learn
How to screen seller prospects in minutes, and get them to their bottom dollar, with LIVE seller calls (including YOURS)
How to inspect and estimate repairs and evaluate deals, in REAL properties
How to build your “team”, as you hear from and interview a closing agent, attorney, acquisition coordinator, REO agent, and more
Plus, this new ADVANCED content
How to find and work with bulk dealers How to finance deals for your buyers, and
sell the financing How to build the buyer’s list you REALLY
need How to raise money to close deals, when
you need to
Join me, and you get…
4 solid days of experiential, “behind the scenes” technique
The Real Estate Goddess’s Guide to Basic Wholesaling (usually $699) How to find the deals, negotiate the deals, put
the deals under contract, find the buyers, avoid problems
All the forms and contracts 18 hours of audio
Join me, and you get…
The Real Estate Goddess’s Guide to Advanced Wholesaling (usually $699) How to assign non-assignable contracts,
create systems, hire assistants, minimize taxes, make more money by financing deals for your buyers, and more
All the forms and contracts AND the systems 8 hours of downloadable audio
Bring a student age 15-21 FREEAll for Just $1,597 per person,
$1,997 per couple!
Today’s Price:
$1,297 for 1,
$1,597 for 2
Why the Wholesaling Academy is Different
It’s EXPERIENTIAL—and the best way to learn is hands-on
High level, totally up-to-date info NO Selling Speakers—NO “there’s one
more step” upsell And it’s guaranteed in TWO ways…
Here’s How Sure I Am that the Hands-On Wholesaling Academy will FIX YOUR FINANCIAL LIFE
Guarantee #1: SatisfactionYou’ll be absolutely thrilled that you
attended the Hands-On Wholesaling Academy or your
money back
Here’s How Sure I Am that the Hands-On Wholesaling Academy will FIX YOUR FINANCIAL LIFE
Guarantee #2: ResultsWhat you learn at the Hands-On
Wholesaling Academy will earn you at least $10,000 extra within 90 days, or
your money back!
Bonus Package, today only
6 FREE months email coaching Equity Trust’s special report “How to
Avoid or Defer Taxes by Investing with Your IRA”
Bring a 15-22 year old FREE
What you’ll do now:1.Nothing, and nothing will
change2.Get my system, risk-free,
and get my help, support, and GUARANTEE that you’ll change your financial future forever!
Those dates again…
The Hands-On Wholesaling Academy
August 22-25Cincinnati