Monday, February 11
Some people are used to doing things the way they’ve been
doing it for years. Or, they think that because someone else has been doing it
that it will work out for them and that may be the case. But I’m not here to
tell you that they won’t/don’t work, all I’m saying is that diversity isn’t
always bad when you’re marketing in real estate for motivated sellers.
Change is the only constant...
They say that change is the only thing that remains constant
in the universe, those who can adapt persevere, those who cannot merely fade
away. That’s how I like to look at things when it comes to marketing for
motivated sellers. In this day in age people are going from desktop PCs to
laptops and from laptops to smart phones. What this means is that there are
people out there getting their daily information from different avenues than
they were even 5 years ago. For myself, I went completely paperless on all my
bills and I haven’t actually written a check in ages. Even older adults are
getting away from yellow pages and heading over to Google to do local searches.
When I first started out in Real Estate I was told that if I
wanted to find a motivated seller then I had to drive for dollars and find
properties that appeared vacant. Well if I would have stuck with that for the
long run I’m pretty sure I would have made money from flipping properties but
how long could I really have been successful at it. My area is only but so
large and I’m pretty sure that after a couple of months I would have covered
the whole city. That’s when I started to look into other avenues to find
motivated sellers, I found out about twitter, facebook, Google adwords and
other pay per click sites. This opened up an opportunity to connect with people
that I wouldn’t have had if I just stuck to driving for dollars.
The age of Social Media and the Internet...
You may be asking “did you give up driving for dollars?”
well no I didn’t give it up. I hired someone to do this for and I diversified
other forms of marketing into my business to generate more leads. I added direct
mail pieces to absentee owners, these are people who own properties but they
don’t live in them. I also added FaceBook Ads, Google Ads, created a seller
page with search engine optimization so that I will appear in Google
organically when someone type specific keywords and also started targeted
mailing list to increase my chances of reaching more “motivated” sellers.
When you diversify your marketing you’re not only able to do
more deals but you are also able to generate income when one form isn’t working out as well. It’s all
about leveraging your marketing sources so that you can be more productive and
Tuesday, January 29
Are all real estate wholesalers created equal? Or are there
some that are better than others?
This purpose of this article is not to bash other real
estate investors, but to shed light on the unique group of real estate
investors often termed “wholesalers.”Wholesalers are real estate investors
whose talent is often overshadowed by less-experienced wholesalers that give
them a bad reputation.
What makes a "GREAT" Wholesaler?
In order to be considered a “great” real estate wholesaler
you have to have all of the characteristics of a real estate professional
combined. A great wholesaler must be a Rehabber (one who purchases a property,
fixes it up and resells it), landlord (one who specializes in purchasing
properties to rent out) and a real estate agent (one who finds the properties
for the landlords and the rehabbers). These individuals all have special traits
that set them apart from the others: The rehabber is able to see what a
property could look like after repaired and purchase it low enough to still be
able to make a profit. The landlord has the ability to look at a property and
analyze whether it will give the investor a good return on their investment.
Finally, the real estate agent is good at finding the properties for these type
of investors often through a MLS (Multiple Listing Service) and then send them
to the investors to see if they are interested. Overall, each individual here
plays a specific role in the in the purchase of a property. Each all has a
specialized skill that works for him.
So where does the wholesaler come into play? A wholesaler is
an individual that goes after properties, buys them for a discounted price and
then turns around and resells it for a profit. In order to locate cheap
properties, wholesalers have to beat out rehabbers, landlords, and real estate
agents before they can claim the property for themselves. Wholesalers must have
extensive marketing techniques and superb negotiating skills in order to get a
low price on the property. Additionally, real estate wholesalers are able to
evaluate the recently-sold surrounding properties and market these properties
to attract interest – the wholesalers in this case are working against the real
estate agents who have access to the MLS and can locate properties and attract
interest much more easily. Finally, wholesalers are able to determine the cash
flow of a given house and evaluate whether the property would be a good
investment for a landlord.
The true skill of a "GREAT" wholesaler
Talented wholesalers often get overlooked due to the
mistakes of other, less experienced wholesalers. Some mistakes that a novice
wholesaler might make could include advertising properties that he didn't have
under contract, or something equally unwise. An experienced wholesaler will be
able to find properties for deep discounts, offer them to the rehabber or
investor, and profit on the sale of the property. For best results, seasoned
investors should find themselves experienced wholesalers, and inexperienced
wholesalers should hone their skills to better their reputations and,
ultimately, make some money in the business.
Monday, December 10
How many people at 26 can say they
paid off all of their debt? How many people at 26 can say they own their own
business? How many people at 26 can honestly say, they could stop work for the
next 2 years and not be strapped for money if they wanted to? I’m not sure of
the numbers but unlike most people, I can say yes to all three of these
questions. At 26, I have been able to establish a lucrative real estate
business, which has allowed me to experience true financial liberation. How did
I accomplish this? By being lazy. Yes, L-A-Z-Y, lazy!
When I was younger being lazy never
worked for me. Both my mother and father frequently vocalized their concerns
about my laziness. My father worked as a contractor and often invited me to
assist him on the weekends. My slothful pace and lack of passion at work sites
resulted in my father yelling and becoming frustrated. I can still hear him
saying “Mike, hurry up! You’re not moving fast enough.” Eventually, (God
answered my prayers) and my father stopped taking me to work with him. However,
this pattern continued. When I was a freshman in high school my mother got me
my first job. The job was simple – load brochures onto a cart. After a week,
guess what my supervisor told me…“Mike, you’re not getting the job done…you’re
not doing it fast enough.” Even after trying me in a different position, I was
soon let go. My next job was at a movie theater and yes, history repeated
itself. At this age I wasn’t bothered by not working but I was bothered by not
having money. I didn’t want to work for other people but at my age I didn’t
have many options. So I had to get creative – real creative. I started selling
my huge collection of basketball and football trading cards on EBay and once I
was exposed to the making profits on the World Wide Web – my passion found me. Working
for myself gave me more motivation and get-up-and-go than a 5 hour energy drink!
After selling my sports cards, I started buying games from my friends and
selling them for profit. I purchased things from EBay and sold them to my
friends and others in my community and I was finally doing what I wanted to do
– working for myself and making money, money, money, moooonnaaaaaayyyy!
This experience taught me a lot and
influenced my decision to major in business management in college. I didn’t
know exactly what I wanted to do but I knew I wanted to be in business for
myself. During college, I obtained an internship which turned into a full-time
job. Though I liked my job, it wasn’t until I found out about real estate that
I was able to fully tap into my passion and motivation. However, I wasn’t able
to focus on it full time because of my job. So again, I had to get creative –
real creative. I began to research outsourcing and ended up hiring virtual
assistants from the Philippines. My new employees were extremely professional.
They spoke with clients, identified buyers, handled marketing, and negotiated
contracts– they basically ran my entire business. Applying this business model on
a larger scale enabled me to expand into other markets, which grew my business.
Hiring other people to do work that I didn’t want to do or wasn’t good at
allowed me to take what used to be a curse and turn it into a profitable
blessing. In other words, my laziness became the impetus for business growth,
sustainability, and personal happiness.
Monday, November 19
As a reasonably successful wholesaler, I'm regularly quizzed “Mike, how do you flip houses?” Before I advance straight into the “how to” of flipping houses, it’s imperative that you first know very well what exactly we are engaging in. Therefore…
Precisely what is wholesaling?
Wholesaling will involve placing a property under a contract after which selling it or assigning the agreement to a person who is able to actually buy and close on the property in your place. Normally, the reasoning is not to own the home you intend to sell.
What do I need to become a wholesaler?
All you need is ambition, positive outlook, knowledge, together with a little money. You won't need a four year degree, real estate license, or spiffy black suit. You actually don’t need money either. For anyone who is really determined and well-informed, it is possible to walk away from a sale with a profit without ever having put any cash down.
Just how can I flip houses?
It’s very easy - it’s like taking candy from the baby! I've layed out your “how to flip houses” guidebook in five easy steps.
1) Identify property. This approach can be achieved via advertisements. By way of example, my company promotes “We can buy your home for cash as is.” you may market by way of car magnets, yard signs, pamphlets, letters, local Real Estate Investment Club sessions, and social networking websites. When you locate a house you are going to complete the sales contract using the owner of the listed as the seller and you also as the purchaser. In order for the written agreement to be considered binding, you must supply a deposit to the homeowner. You can offer them a modest amount of money (i.e., $10). A good agreement should provide you with about 45 days to accomplish simple steps 2 and 3.
2) Establish your actual offer amount. To make this happen you ought to be mindful of the value of the house, how much money the home owner owes, what the homeowner wants (i.e., payment for relocating rates), the amount necessary to make repairs, plus the cost the investor (aka rehabber) would acquire the property for (i.e., 65% of market value).
3) Spot investors and possible buyers. You can actually run an ad in the neighborhood newspaper or use some of your previously mentioned outlets to distinguish individuals or companies who would want to consider buying the home quickly. You may as well put signs around the home, get hold of landlords in the area, or networking with brokers, realtors, insurance agents, and so on. Moreover, show up at auctions - you can be certain to discover investors there. The theory will be to build a database of investors once you find your property - you will have a ton of people you could possibly market it to. Make sure to manage your investors well. You wish to maintain a good relationship with them that may get them to keep doing business together with you.
4) Negotiate a great deal. Confidence is crucial. You understand exactly how much money you wish to make and you recognize how much the investor can stand to make from this deal. Use what you know and be firm.
5) Close the deal. The title company does all the work here. Once you have found the house, sold it to your investor, drop by closing and let the title company maintain the rest.
Is it possible to produce an example?
You get a property which can sell for $150,000 following remodeling and this requires $15,000 in improvements. According to precisely what the owners owe ($70,000) and require ($5,000 to relocate), you'd put a contact on the home for $75,000. You then advertise the home to investors and negotiate a deal selling the house for $85,000. You bought it for $75, 000 so you made a $10,000 earnings.
Monday, October 15
After reading Rich Dad Poor Dad, like many other Real Estate investors, I wanted to get started with REI. I saw that it could be a very profitable endeavor and I want to get involved and start making cash flow. Well I was hit with reality, I had a full time job, a son, a personal life and little free time. That's when I stumbled across a program by Chris Chico called Virtual Wholesaling which claimed to teach you techniques on flipping properties outside your local market virtually. I'm not going to go into the program but I will explain briefly what my systems that I've learned from this program and how I'm using them now.
My systems are simple, I send off around 5000-10000 yellow letter/postcards a month to absentee owners. We target specific areas and we always send follow-up letters from prior months as well. So, it's not like we have a fresh new 5,000 people to send to every month. Once the calls start coming in, my assistants start to screen the callers for motivation and will then submit the properties to me for comparable sales and a ballpark figure. The ballpark figure will be a range based off cash sales in the area for the past 60-90 days. So, lets say a property has recently sold for cash that was .2 miles from my subject property for 40k. Well, I know that our subject property will probably sell for around 40k, what we will then do is take out our profit so we know our ballpark will need to be 35k or under. I will then tell my VA to give the seller a ballpark figure of 25-35k based off the condition of the property.
If the seller accepts our ballpark figure we will then have a partner on the ground go out to evaluate the house and build up a rapport with the seller. Depending on the motivation of the seller, our partner will get a signed contract at the appointment. Once the contract is signed we will then send it off to the title company for a full title search. In the meantime, my VA and our partner on the ground is calling all of our buyers to see if they are interested. When we find a buyer, my assistant sends them an assignment contract and schedules a time for them to head over to the title company to place a deposit in escrow. When title comes back clear my VA will schedule the closing with the buyer and the seller and we will have our assignment fee mailed or wired to our bank accounts.
This is a fairly simple process, to learn more visit my blog www.WholesalingHouses101.com
Mike "The Professor" Nelson