Hello out there!
Bellwood, IL · Member since 2008 · 26 posts · 0 votes
My name is Chris and I'm right outside of Chicago. I've been a passive real estate enthusiast (is this a great oxymoron or what?).
Anyway, I own a couple of low-end properties but now I want to wake up and blossom and explode (in a good sense, of course).
I've played 'stalker' to the real estate business: been to sheriff's R.E. (REO) auctions, keep a weekly eye on HUD & VA lists, bought some, sold some and even lost a couple!
In short, I'm a somewhat failed real estate investor trying to ressurect. I want to concentrate in the gold mine area of foreclosures.
Have I rambled too long? I need all the help & support I can get.
Oh, did I mention that I was laid off from my day job.
Welcome to the forum, RE Prospector.
Sorry to hear about your job (well kind of sorry). You seem pretty motivated and that's a good thing. How long can you survive without income to build your RE business? Maybe getting a part time job or something might be a good idea as you resurrect your business. You've got to pay the bills as you build your future.
In my opinion, the quickest way to get income in real esate investing is wholesaling. You can get a decent size check in a matter of a couple weeks. It would require an extreme amount of focus and effort to make something that quickly, but it is completely possible.
Welcome to the forum, RE Prospector.
Sorry to hear about your job (well kind of sorry). You seem pretty motivated and that's a good thing. How long can you survive without income to build your RE business? Maybe getting a part time job or something might be a good idea as you resurrect your business. You've got to pay the bills as you build your future.
In my opinion, the quickest way to get income in real esate investing is wholesaling. You can get a decent size check in a matter of a couple weeks. It would require an extreme amount of focus and effort to make something that quickly, but it is completely possible.
Hello RE Prospector,
Ryan speaks the truth. He does wholesaling for a living
and does quite well.
Let me welcome you to this forum, and say that you've
made a good choice by hanging around the positive
and upbeat people who meet here.
Best Wishes to you!
Thanks a bunch for the warm welcome Wesley & Ryan. I feel I have been guided to the right place.
I thought I knew almost everything about real estate but I don't know about wholesaling. Locally, there are a few companies that acquire distressed properties somehow (I don't know how) and re-assign it on a short-term fincance (46, 60 or 90 days) to the end buyer. They are just the middleman who carry the buyer for the stated period until he/she fix up the property enought to get their own mortgage. If the buyers don't fulfill their fixup/purchase obligations, the property reverts back to the middleman. I haven't tried to find out the specifics of their business.
Is this what wholesaling is?
Do you need a R.E. license for wholesaling? Do you need a good monetary reserve? Please educate me.
I try to be resourceful. I will survive the job loss. Between looking for temp assignments, sub. teaching etc. I'll try to keep the bills paid but I want to focus on making a forward financial leap. The Chicago R.E. market has peaked and therefore it is rare to come across any decent investment deals but I see properties about 50 miles outside of this immediate market that look like great opportunities but I don't have good money reserve or good credit.
Wholesaling provides an opportunity for someone to build income with little capital or credit. All it requires is ambition and some specialized knowledge. The more ambition you have, the more money you will make. Wholesaling does not require a real estate license. A license is not required to buy or sell any property that you have an equitable interest in. That interest can be a contractual interest (you have the property under contract) or you actually own or have title to the property.
A wholesaler in a nut shell puts property (normally distressed property) under contract and assigns or resells the property to another investor. The investors a wholesaler sells to either use cash, lines of credit, or hard money loans. This allows quick closings on properties that sometimes need extensive repairs.
A wholesaler lives off of the idea that price overcomes all objections. If you can sell a property for a low enough price it doesn't matter what's wrong with it, somebody will buy it. A wholesaler focuses on developing two things. Finding deals and their network of investors to sell to.
Getting started, a wholesaler should normally not ever buy a property. You put properties under contract with a contingency and focus on quickly selling the property for more money to other investors. If you end up not being able to sell the property before you are expected to close then you utilize your contingency and walk from the contract.
A wholesaler is a middle man, and a good wholesaler becomes a very well payed middleman that other investors love. The thing is that if you have a good enough deal under contract, there are other more established investors out there that will be glad to pay cash for it in a matter of days. If you have a house that will sell fixed up for $100,000, it needs $10,000 in remodeling, and you have a contract on it for $55,000, then with a developed investor network you could have an investor buyer for it for $60,000 in a matter of days. You sell it or assign the contract for 60K, you bought it for 55K so you just made $5,000 in a matter of days.
I cannot believe I just read this about wholesaleing ...I an under contract for a 4br 1.5 ba. home in Toms River, NJ. It is well out of attorney review I was told by a mortgage rep that I met on this site ( no offence to the site) that he could get me 100 % financing...well to make a long story more boring he could not and was fired by his company...Just fri the office manager took over my file and I was told yesterday that my credit score was too low and he could only get me 90% LTV. Of coarse I do not have the 10% and there are several other prospective buyers in line for this property. My contract reads 210K with 15K back at closing. ( 15k for closing costs and repairs) This house is a great buy for the 195K price. It wll appraise for 230K in its condition and with repairs would sell easily for 260K. I am a contractor and estimate the repairs at 15K. Not sure how to go about wholesaleing this property and my commitment date is in 7 days. If anyone has a idea for a positive outcome for this situation I am in please call or e mail or post. Thank You. Chip.
Well, Chip. How are you?
You know I'm looking at your numbers and I'm just not feeling excited about the deal.
Check out some of the Crunching Numbers posts at:
http://forums.biggerpockets.com/viewtopic.php?p=18568&highlight=#18568
If the house would actually sell for 260K fixed up then paying 195K with 15K in repairs is buying the property at 80% equity (210/260). Unless your market has a very strong apprectiation factor then 80% equity doesn't work for a wholesale deal and is very risky for a rehab project. It's too tight on the numbers. You are placing yourself in a risky financial position that the most probable thing to happen is that when the dust settles after fixing the house up and marketing it for months, you will have broken even on the whole deal.
You know Ryan...the more I have thought about it the more what you said was really in my heart...I am just anxious to get R.E. in my name again....maybe a little too anxious....I have read some of those posts and will continue to read the rest when I get time....Thanks for replying and have a great holiday. Chip.
That anxiousness is good. You can make a lot of money by directing that restless energy through some organized planning. Just make sure that you don't get too anxious and jump on to something that you wish you hadn't.
I'd recommend that you focus that energy on developing different avenues for finding deals. If you can increase the number of potential deals that you have access to, then a good deal will eventually show itself.
Hi RE_Prospector,
Welcome to the Forum. Hope you reach your real estate goals. I'm well aquainted with the pressures of un-employment. It too shall pass. A job is merely a means to an end.