Okay I have spent countless hours reading and watching videos. Basically what I have learned is:
Find a great deal. Get it under contract. Call the title company. Make sure you have an end buyer. Close and wooo freakin whoo.
I have heard these steps over and over again, but I feel like a lot of important information is left out and it is driving me crazy. I would love to just start calling a million people today and give them offers on there house... but wait, is that even how I put an offer in on a house?
Assignment contracts? where do i obtain these?
Do I simply bring the contract to the sellers house and have them sign it and it is that easy?
Is that all the paperwork that is needed on my part for this whole deal?
So assuming that I got a good deal, i brought the paperwork directly to the seller to sign, I called my end buyer, he liked the deal, now I simply wait for the closing day and boom i get my deposit check and wait for the rest of my money? Looking at it first person is this really all the physical actions I need to do?
Also if someone is selling a house and they have a Realtor helping them, can I just directly call the owner of the house and offer a price to get the house sold asap or do I need to be talking to the Realtor?
I have no car and I have every intention on putting every ounce of energy I have into this. My goal is to get a car so I can transport myself to college and live out my dream of becoming am trauma surgeon. This is an avenue I would like to explore, but I need to make sure I have all the correct information in place so I can make the right decisions and be confident in what I am doing.
Thanks in advance to anyone who can help answer my questions, which I am sure will turn into many more.
Wholesaling is very simple. However, with every answer comes another question. Sometimes that's good and other times not so much. Keep in mind that you will never have all of the answers and there will never be a time when it is perfect to start. Except right now! Go to your local REIA and almost all of your questions will be answered. Talk to some of the experienced people. Don't overthink it. Just do it.
I would love to go to a meeting, but all the ones I can find on google are over an hour away from me:(
Mark, let me help you with this by asking a question. How many trauma surgeons watched videos, read a book, and then jumped right into surgery. The answer is none.
If any aspect of investing were as easy as this, you would skip being a surgeon and move right into millionaire status. The learning process is long and arduous, not unlike becoming a physician. You need need to learn contracts, contract law, valuation, acquisition and exit strategies, and so much more.
So, how do you get started? You network with others who have already been down that road before you and you seek to learn from and partner with any of them that will consider it. I wish I could tell you there's an easier way, but there simply isn't. You can reinvent the wheel or you can hang onto the coat-tails of an active investor by providing them with something you have (time) and something they don't (time!)
Thanks for the reply. Looks like I just need to buy a few books.
Originally posted by @Mark Andrew Deidiker :
Thanks for the reply. Looks like I just need to buy a few books.
Which is the exact opposite of the advice you were given above.
If nothing else, take a real estate license class. They are often offered at community colleges and high school adult education programs, and generally cost about $500.
Frankly I'd rather not hang on the coat-tails of anyone and just learn the steps needed. Then at that point it is trial and error. I am confident in how well I know the market I want to pursue. I also feel confident in my ability to determine how much is needed for repairs.
The way things are going though it's looking like I have no choice. So being as humble as I can be, I will attend the next possible REIA meeting. I will hopefully make a few friends who are willing to share knowledge with me.
The "error" in that "trial and error" can be a really big deal. And not just for you. When you tie up someone's house in a contract, you are messing with a very important part of their lives. They are relying on your contract, making plans for their next home, giving notice a jobs, dis enrolling kids from school, etc., etc. It is incredibly irresponsible to just blunder your way through it.
And if they have a Realtor, yes, you need to deal with the Realtor.
Originally posted by @Richard C. :
It is incredibly irresponsible to just blunder your way through it.
Which is why I came here for answers, but instead have been directed elsewhere for them. Seems as if everywhere I go everyone is just beating around the bush.
There are a lot of steps needed and while buying books and even reading everything you can here will give you the basics, it will still take physical contact. You honestly can't just call people and make an offer. It's going to take face to face contact, both to view the property, truly find there motivation, and make an offer that works. Otherwise you will end up completely wasting your time. Think about, what if I called you on the phone and said "hey, I'll give you $50,000 for your house. I have no idea if it even has a roof, walls or a floor, but that's my offer."
You're going to have to make physical contact with people, go to their property and on the back end you have to show it to the buyer. There are people that virtually wholesale but that's beyond me right now. Trust me its not the sitting on the beach with your laptop like the infommercials say.
Best to save up get a car, join a REIA, and connect with other wholesalers. In the mean time, keep reading, keep studying and absorb. Every question you will ever have is in these forums, podcasts, or blogs.
If you are looking for some advice on what to do, then the first thing you need to do is sit down and learn each step individually. For acquiring a property decide how you will find it? Will you use the MLS, mailers, driving for dollars. Once you figure this out you can move on to the next step. Wholesaling takes a lot of parts to make a deal happen.
First you have to find a motivated seller who will sell you their distressed properties. Make sure they have plenty of equity left (which can be hard to find) and they are extremely motivated. Once you meet and agree to come back (for best time) to their property and check for any problems within the house. This is when you get a general contractor who will walk with you to pinpoint any issues with the house and have the contractor give you quotes and repair estimates (preferable to have copy of this) and of course you want to pay him some fee. Before all this though, the seller has to be okay with you bringing contractor to the house to get those repair estimates. You then find out about the ARV (finding the ARV should be the first step), find repair costs, fixed costs, your wholesale fee and the possible end buyer's profit.
You want to present your offer to the seller and have him sign the dotted line in the contract (make sure they are state approved or reviewed by real estate attorney who deals with real estate investors/wholesalers). Get those and give it to your title company and have them do review on the property for any possible liens and encumbrances. If the title is clear and free of any encumbrances or if there is have it cleared up. If you think the seller and end buyer is going to go behind your back, then go to county records and file affidavit of memorandum of purchase and sale agreement and it would cloud the title (when seller and end buyer try to make a deal and close behind your back). Use this when you actually think there is a chance you would be left out of the deal though.
And then find and market for buyers and you present to your buyer a good deal (one where the repair costs and other numbers are close to accurate and the profit deal for end buyer is sweet and the property criteria fits the end buyer's requirement). You then get the non-refundable fee and signed (contract of sale) from the end buyer and present that to your title company and connect the seller and the end buyer. You are officially out of the deal but make sure the deal between end buyer and seller closes well. The title company then mails you a check (from the difference on the HUD-1 paper) and you are free to spend that money. Wise thing though is to set up LLC and/or re-invest that money back into real estate investment (marketing, finding leads, paying fees, etc...) until you get the momentum and it becomes second hand nature to you.
The more you do it, the better. When you master at this, you can possibly move onto short sales (properties that are "underwatered", mortgage liens are more than what the property is worth) and then move onto REO. They aren't easy, but still possible.
Hi Mark - I have a 3-video "Wholesale Accelerator" course (with sample Purchase and Assignment agreements) that I give to free only to my colleagues here in BP. Send me a colleague request (w/ your email address) and I'll send you that material. (Pure training, no sales or advertising) In 2 hours you'll know a LOT more about wholesaling than you do right now.
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