Can anyone take me through an elaborate Step by Step Strategy to incorporate in my first endeavor at a wholesale deal... Additional note, i live in the UK and not quite sure whether the same ideas in the states work over here, so if anyone could clarify that for me i would be eternally grateful
The basics of wholesaling are simple:
1. Find motivated seller willing to sell you their house at below market value in order to generate a quick/easy sale to solve whatever problem(s) they are experiencing.
2. Take control of the property with an equitable interest.
3. Sell your interest in the property to another buyer who closes the deal.
Now, each of those three steps involves a LOT of study and work, with knowledge of various aspects -- legal, marketing, sales, etc.
I recommend you start reading articles, blogs, forums, etc., here on BP to get familiar with these things, as well as consult local real estate professionals in your area (brokers, attorneys, financing people, etc) to ensure that what you plan to do will both work and remain within the law.
I completely agree with J Scott.
One important point that I think many new wholesalers don't anticipate (myself included when I first started) is the level of title issues and "problem solving" that you will have to do.
Gurus will spout on about how easy it is to just market, negotiate, and then sell a property but they never mention that you'll need to manage people, expectations, title issues, legal problems, tax problems, etc.
You may not get all of these on every deal but don't be surprised that you end up with a few that you have to manage at the same time. I've had all of the above happen on just one deal and it was no cakewalk.
Finding a good mentor or someone who's been in the business and understands these problems can go a long way to help you run the deal from end-to-end.
Feel free to PM if you have any particular questions. I'll be happy to help.
Best of luck.
Just don't have misconceptions that wholesaling is 'easy' money.
Quality wholesalers have the most skills of anybody. From marketing to negotiating, evaluating current market value, rehab costs, ARV to selling and disposition. Oh - and having buyers and knowing what they are looking for and where.
Not trying to discourage you, just warning it is not as easy as is portrayed @Lewis Watts !
Learn real estate over there before trying to deal in real estate.
Find buyers first, know what you can sell and what they want. This keeps you from spinning your wheels, wasting time on something you think might be a deal with no place to put it.
It also keeps you from hanging a property owner taking their property off the market with only the hope you can find a buyer. Mess with a property owner, taking their property off the market without the intention of buying as stated in your contract, can lead to a ticked off owner. You have tort law there just as we do here to some extent.
A good hunter hunts for a specific game, they go prepared for what the are going to hunt, they don't try to shoot quail with a deer rifle or shoot at anything that pops up.
Then find a seller.
If you think you found another game, don't shoot at it, know where it is. Go back to camp and see if anyone has an interest in it, if so, go back loaded with the right ammo.
Your assignment of contract laws are probably similar under common law, need to check on that.
Wholesaling really isn't a place to start, you need to understand the market, how to value a property, how to evaluate repairs, understand marketing times, closing transactions to some degree, be able to cure title issues if it's worth messing with. By the time you're in a good position to be a decent wholesaler, chances are you'll move to other things that are more profitable.......even if you are broker with no job and bad credit, LOL :)
Thanks guys for the responses! its just all over the net people say how easy it is bla bla bla..... to be honest i'm a pretty good people person so i think i would pick that side of it up quickly, however i really just don't understand the paperwork, and like you said knowing which houses would be a good choice to make a deal, and someone on the other end to buy!!!!!