OfflineOk folks, now that you have the right mindset it's time to step out and take real action!
Note: Wholesaling can be done with NO credit and NO cash out of your pocket.
Here's the basics of wholesaling:
Find a motivated seller and negotiate a sales price around 40 to 75% of the after repair value (the value of the house if it were in good or live in condition). Of course, the lower the better. Put the house under contract (put your name and/or assigns) with as long an inspection period as you can negotiate. (45 days or more, the longer the better, you need time to market it.)
Take the price that you agreed upon and mark it up anywhere from $1,000 up, depending on homework you've done to get the appraised value of the home, comps in the area, etc.
Market the property to your list of buyers. You should constantly be building a database of them until you have a few hundred or more.
Then once you find your buyer, you assign the purchase contract to them. Then you do an assignment contract with your buyer for your 'fee'. You pay no money out of pocket. (The buyer pays the earnest deposit and any down payments.)
Take both contracts to your title company and they will call you when your check is ready. At this point you're out of it now (till closing.) Make sure you tell them to contact the seller and buyer directly and provide their information.
Summary: You're simply the connector between buyer and seller and getting paid an assignment fee for doing so.
The more you do, the more money you'll make... SUWEET!
Are you ready to try it?
Elena
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Welcome to the DG family!! Thank you for the lovely compliment... I appreciate that!
I always prefer FSBOs because I like dealing with the seller face to face and tend to be quicker transactions. Pre-foreclosures are more complicated and take longer, with REO's you're dealing with banks too and I don't like that method either. I deal with regular folks like you and me alot better and I'm most comfortable with that type of deal. I recommend assigning over bird-dogging (which are basically the same in theory), with bird-dogging the investor sets the fee he pays you. With assigning you can make anywhere from $1000 up, you set the fee, no one else! I LIKE THAT BEST!!
I hope this answers your question, let us know if you need any more help, this forum is great when answering questions! We're glad to have you with us.
Best of luck to you,
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Yea i can see what you mean about FSBO's being easier. My problem is i get nervous to approach people and situations but I have been going out of my comfort zone lately. And I know I'll have to to make this work. So how do you approach the owners and make an offer? Do you let them know you're an investor and your intentions? Thank you for taking the time to help me I really do appreciate it!
Kristy
I get nervous everytime I make a call... LOL! Seriously, I get all these numbers from cruising neighborhoods and then when it comes time to calling I get petrified!! Honestly, I do. I feel like I'm cold calling them or like I'm a solicitor! It takes me a lot of pep talking to get me motivated enough to do it. Sometimes it even takes me a couple of days to muster the nerve up! I'm so relieved when I get a machine... LOL! Don't ask me why, but it does. I'm doing everything I can to work through that, but for now it's a struggle. I'm trying to market myself enough to where my phone's ringing from people contacting me instead of me contacting them. It takes time and consistent marketing. So even though you're nervous force yourself to do it. Afterwards you'll feel good and tell yourself, that wasn't so bad, you did it!
I just talk to them like I would talk to anyone, with respect and consideration. Listen to them, get them to talk. Ask them to tell them about their situation then let them do the talking. One of the coaches posted something pertaining to this subject. I thought I saved it, but I can't seem to find it. Basically he was saying to build trust and raport. I'll try to find it, you just reply thoughtfully like that sounds great, why are you moving? Don't make it seem like your reading a script or pumping them for information. Make it real, like a conversation between two friends, not an inquisition. I'll try to find that post, hope this helps for now... No thanks are necessary, I love helping people, it's a priviledge and a pleasure. Now go do it and make me proud girl... LOL!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Kristy, I found the post!!! Click on this and copy and paste it into a word doc and print it out so you can use it as a guideline when you find your next seller. I rehearse what I want to say with my kids it helps me with my nervousness... LOL!
http://www.deangraziosi.com/node/5911
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Hey MammaE did't talk to you for a time how are you doing? I was reading you post about the whole sale again to refresh my memory I going out today with my Realtor to look at some houses he found some good dials. Wil see what hepens. LOL hopefully talk to you later. Lilie
How are you? I missed you! I'm so glad to hear from you! Let me know what happens with the Realtor, hope you find some great deals today!
Momma E.
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Elena, thank you so much for your inspiration and knowledge i do appreciate it. I just have another question. When speaking with home owners do you let them know you're an investor and aren't actually buying the house? and i don't know if you have any experience with pre foreclosures but how can you neg. a lower price then what they owe on the house?
Thank you!
Kristy
Hey Kristy on the pre-4 you need to look for properties that have equity in them the more the better you are going to offer the owners some of it and then you whole sale it to investers and they pay all the cost and the owner the $ you agreed on. That is how some investers did it here. Lilie
Hey MammaE the houses where good for wholesale man can I make money on them 3 out of 5 are short sale I read the forums again on short sale to get it right I steel don't know, going to call tomorrow the coach and see what they say. One was HUD don't know nothing about the HUD dials. And one I don't know. The Realto have to get me comps tolled him we need to do move fast will see. But I'll tell you THESE ARE MY DEALS I'LL GO AND GET THEM. We are going to the Bahamas next year. Lilie.
Wow, sounds like a lot of possibilites for you, I'm so glad!! You ARE going to get a deal honey, I know it! Short sales aren't impossible they just take more time and effort, but you can cash in BIG with them. HUD deals I don't know much about either, but if you can't find out, we'll find out for you... LOL! I'm sure someone here has dealt with those too. Yeah, we're going to the BAHAMAS MAMA!!
Kristy,
No problem, ask away, it's all good. Lilie knows her stuff and can help you too, all the DG family are very helpful on here. I am ALWAYS upfront with my sellers and buyers, I tell them I'm not buying the house for myself. I'm going to sell it to one of my investors. You always want to do business with honesty and integrity, no matter what the business is. It will go a long way and you'll be blessed for it. Never get greedy or be sneaky it's not worth it, because whatever you do you attract back to you, some call it KARMA!;D
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
MammaE you are so right be honest in all that you. Boy do I have so much dishonestly lately from people that are very close to me that my head is still spinning. Not a good feeling.
Sorry to hear that Lilie, it's very hard when the people close to us are dishonest. You want to get away from them as fast as you can. I myself have had to remove myself from the presence of such people, not because I don't forgive them, because I do, you have to or you remain emotionally attached to them. The pain of being continuously deceived is too much for me to bear, so for my own sanity I have to distance myself. But I will always pray for them, for God to forgive them and to cleanse me of any unforgiveness.
MommaE
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Ok, so wholesaling is the same difference as reassigning properties, and or fee refferal.
JButcher
It's the same thing basically.
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Appreciated Elena..............I had just not heard that term before.
JButcher
Hi I am new to this site and I have a question regarding bank owned property. Wouldn't most boarded up property be bank owned? If so, how would you go about doing a Wholesale purchase and reasign with a bank owned property. By the way I am so glad I found this site.
Andre'
Thank you everyone for all your help! While driving around i noticed a few FSBOs and did go back and get numbers addresses and any info on them. a friend of the fam is a RE agent and said she'll help wit comps and FMV. Im going to be getting in touch with her in the next couple days. I will keep everyone posted on my progress. Thanks again!!
Kristy
Check your inbox for my reply, sorry I missed you. A boarded up house doesn't necessarily mean it's bank owned, it just means it's distressed. Get the address and look up the property on the tax accessor's website, if they have one, most counties do now. If not, you'll have to go to their office and see who's paying the taxes and if the address is the same or different. Banks usually won't agree to assignments unless you can prove the end buyer has the funds, but they usually prefer to sell them via auctions for that reason.
Way to go Kristy! I'm so excited for you, you keep taking action girl and good things are gonna start happening! Thanks for keeping us updated!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
the easiest properties to wholesale are the ones where the sales price is as low as you can get it in relation to the ARV - that way you can bake in your fee when assigning to the investor and also leave them with enough to make it worth their while to take the property off your hands and flip it themselves. usually investors won't touch a property if the sales price isn't below 65% of ARV.
Please someone else chime in if I am incorrect, but I think some bank owned properties (REOs) are non-assisgnable so make a note of that. there are also properties that have seasoning restrictions, meaning you (or the other investor) has to hold on to the property for a specific amount of time before flipping. keep that in mind.
Anyone plesae chime in if I am off base here.
Nick Walters
Walters Property Investment Group, LLC
That's right Nick! I LOVE your reference to cooking in this sentence... Be sure to bake it til it's a golden brown... LOL! Thanks for the great insights, keep 'em comin'!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Okay, I have a question regarding when you take your contract to escrow. I live in California, so we do have some guidelines regarding how soon an inspection needs to be done, etc. As soon as my contract is signed, do I take it to the escrow company or wait until I have assigned it to another investor? Also, are any of you having the property inspected before assigning the contract or does the new investor take care of all the house and termite inspections, etc.?
Kim
I took my contract the day after it was signed and opened escrow. You don't need the assignment contract to open escrow, you add it after you get it. Yes, have the property inspected before assigning it, because if it fails that's another way to negotiate a lower price, make the seller take care of it or back out of the deal if he won't do either one. Hope this helps, good luck!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Thanks for the info. You guys are great! Last question, who pays for the inspection? Or do you work the inspection payment out at the end of escrow? When I purchased my house, I had to have a check ready for the home inspector when I met him at the inspection.
Thanks for the great advice...
Kim
Usually the buyer pays for the inspection, but you can ask the seller to, it's all negotiable!
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Hi Elena,
When doing a re-assign only, would you as the assignor typically have a title search done ?
I think a title search can get expensive, and I'm not sure if its useful/necessary for if you are just re-assigning the deal to someone else.
Perhaps if if you know the title is "clean" you may then be able to market that part, but then again you may not even need to go that far.
Especially wondering now, as I would like to try this technique out asap... I have a couple of FSBO properties I am going to call about...
Great information, and real life examples, thank you everyone.
~Brian
You don't have to do a title search if you're assigning it, the end buyer can do it. It's all up to you and what you're end buyer agree on. It's all negotiable!
God bless,
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
So much wonderful info I cant stand it! (teasing of course) I read and read and read and everytime I learn something new, a new way to do it, or something I never knew, so my advise to everyone here is to continue reading this site, its crazy full of every answer to any question you have about doing this and I am so amazed how well organized this info really is. WOW! Keep up the awesome work everyone. Your more helpful than you know.
Beth
Sometimes I wonder if I'm helping anyone. I get very few responses that say that and a TON of emails asking more questions, many of the same ones too. So it's good to know, someone's getting it.
Continued blessings and success to you,
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."
Lads @ Lassies,
It is TOO FUNNY reading your thoughts/ideas as I'm laughing while I'm learning (always a good thing and what I strive for when I teach!) Who said learning has to be boring
In any case, just beginning to catch on to a few of the concepts you are discussing...Here's a couple questions:
1) What are the differences between wholesaling vs. bird-dogging?
2) Ads (paper/internet)...so the idea is to post BOTH that you have house(s) for sale AND that you want houses???
3) No realtor for an assignment? Just 2 contracts and a title company? No mortgage company?
4) 100 buyers...seems like a lot (when I am starting at ZERO)...how? how long?
Thanx for accepting my ignorance and being kind!
"All great social and intellectual movements begin with a group of interested friends." CS Lewis
And we know that for those who love God, that is, for those who are called according to his purpose, all things are working together for good.
Romans 8:28 - International Standard Version (©2008)
It is TOO FUNNY reading your thoughts/ideas as I'm laughing while I'm learning (always a good thing and what I strive for when I teach!) Who said learning has to be boring
In any case, just beginning to catch on to a few of the concepts you are discussing...Here's a couple questions:
1) What are the differences between wholesaling vs. bird-dogging?
2) Ads (paper/internet)...so the idea is to post BOTH that you have house(s) for sale AND that you want houses???
3) No realtor for an assignment? Just 2 contracts and a title company? No mortgage company?
4) 100 buyers...seems like a lot (when I am starting at ZERO)...how? how long?
Thanx for accepting my ignorance and being kind!
So glad to see your jumpin in, it's not ignorant to ask, it's ignorant NOT to...
Ok, I'm going to go in order here.
1) Wholesaling is flipping the contract for a fee that YOU decide upon of course within reason of the fair market value which could be anywhere from $2,000 - $50,000 (I made $17,800 for mine). Bird dogging is finding a house that you turn an investor onto and if that investor closes on it you get paid what HE/SHE decides, which is anywhere from $500 - $2,000. Some may pay more after you've dealt with them a few times.
2)Yes, because you are building a seller's list for a continuous flow of property leads and building a buyer's list of investors to sell to, the more the better for you.
3) Right, no realtor, no mortgage, two contracts the purchase agreement and the assignment contract. By jove I think you've got it!
4) Well, 100 buyers is an exaggeration, but if you get that many then bully for you! But actually a couple will suffice to start. Especially if they close quickly and PAY YOU!! It doesn't take long really, call the bandit signs, call the we buy houses ads, answer ads on craigslist and before you know it you've got a handful of buyers lined up.
I hope I was kind and answered your questions thoroughly, if not let me know. I'm always glad to help.
Continued blessings to you,
Psalms 118:23 "This is the LORD's doing; it is marvelous in our eyes."