Real estate strategies for beginners

9 Replies

@David Mijares ,

That's a very wide open question.  There are sooooo many ways to get involved in RE.  You're in the wholesaling forum, so I'm guessing that might be the direction you want to go.

There are two main things you should do right from the start. First, learn, and second, network. There are a million resources online. Personally, I took a course to learn the basics of wholesaling. It wasn't enough, but I got a great understanding of how it works, as well as the tools I needed to get started. Then I listened to podcasts (relentlessly) and downloaded a few books on Audible. As I was doing this, I started attending local REI meetups and association meetings. My goal was to learn from them as well as getting to know a lot of them. Many of the people at these meetings are people just getting started and look like fish out of water. Then again, many of them are seasoned investors who have been doing this for quite a while and are very successful. The cool thing is that ALL of them are very friendly and open. I've learned quite a bit as well as I am building a great cash buyers list at the same time.

Good luck!

The best way to get started in REI is by wholesaling (which is the assignment of a contract) Once you have done several deals, gained some experience and have set aside some cash then you could try a flip or other strategies. For now I recommend you focus on getting really good at finding buyers and finding good deals.

First step is to make sure you understand the laws in your area regarding wholesaling which is the assignment of a contract and double closes. Several states have passed laws calling wholesaling brokering and are requiring a real estate license to wholesale.

You should talk to a real estate attorney or title company that works with investors in your area to ensure you are in compliance with any laws. They will also have the proper contracts as well.

Next you need to educate yourself on the business and your market. You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers. You want professional legitimate cash buyers so you know you can close on the deal and do what you tell the seller you will do. I can’t emphasize this point enough. You do not want to contract a property unless you know you can close it or take it down yourself.

Different types of cash buyers are flippers, buy and hold, subject to and lease option. You need to find several of each of these types of buyers and learn what they are looking for.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups, Realtors, title companies, closing attorneys, property management companies, auctions, Craigslist, and bandit signs.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase. You can also buy lists from companies like list source and there are some REI software companies that have a cash buyer search feature.

Best way to find motivated sellers is to purchase lists and compile lists from city and county for 60-90-120 days late on mortgage, pre-foreclosure, delinquent taxes, water cutoff, code violation, probate, divorce, high equity, etc. and mail or cold call.

Other free methods are driving for dollars, door knocking, wholesalers, craigslist, Realtors, FSBO sites, expired listings, foreclosure sites, put out bandit signs,

If you have the funds you can use billboards, newspaper ads, other offline publications., TV commercials, radio ads, do pay per click/adwords, facebook, Linkedin, Youtube, and other forms of online advertising and boosted/promoted social media postings.

Bottom line is consistency. You need to take consistent focused action every day, answer the phone when it rings and follow up and follow through.

No matter what you do, what you are interested in, what is the ONE thing you need to succeed?

Motivated seller leads.

Now, what is the one thing EVERYONE (ahem.. almost everyone) is missing, struggling to find?

Motivated seller leads.

Now, How in Jerryll's name do you find motivated seller leads?

Answer... You do NOT.

You make THEM find YOU! Why?

Why do work? Why buy lists? Why do skip tracing? Why send out mailers? why get yelled at on the phone? why pay money for marketing? target your audience? retarget your audience? pay more money, waste money because your leads you get are tire kickers, spend more money waste more money.. OMG WHY?!

No no You do what I do. You sit on your stinky butt and you just watch the leads stroll in. The ONLY reason we get yelled at, is because we get more leads than we can handle and the sellers get pissed at us because they think we are ignoring them. No joking. We are struggling to keep up with the leads.

So... NOW that you know this. Let me ask you again.

What do you need to succeed?

Yup say it with me y'all. "I need leads". 

again

I NEED leads

A-friggin-GAIN you silly little muffns

I NEED STINKIN LEADS GAHDAMNIT

yesh, yesh you do.

Now how prey tell do you get leads?

You get a website and you do SEO. No you do not neeeeed to pay anyone for SEO. You CAN do it yourself.

OK so now you know what to do. You can listen to as many people giving you advise all you want.

Or.. you can follow the numbers.

What numbers?

Proof! Concrete evidence that what I am telling you is the way to go! These are my leads that came in today. This does not include the tons of calls we received.

Now process all information you have received. All advise you have received is sound, so you can't go wrong. The thing is... some advise is better than others. So again process it, and think. Then act!

Be the Gur not the Zim! SEO World Domination!

Originally posted by @Greg Dickerson :

The best way to get started in REI is by wholesaling (which is the assignment of a contract) Once you have done several deals, gained some experience and have set aside some cash then you could try a flip or other strategies. For now I recommend you focus on getting really good at finding buyers and finding good deals.

 This is a very common piece of advice which I personally feel is bad advice. First off, wholesaling does not equal assigning contracts. In fact, if you lock a contract with an assignment clause, then proceed to publicly market the property, you have now involved yourself with brokering without a license and could face fines and even jail time.

There are a number of legal ways to wholesale and assigning a contract is often performed illegally.

In my opinion, the best way to get started is get your license, learn from the broker and other agents where you hang your license, learn your market, and study the specific strategy you wish to be involved with, be it flipping, buy and hold, notes, development, or whatever. Then either go on your own or work for someone doing that very strategy you wish to employ and eventually go on your own,

@Will Barnard wholesaling as you know is just a slang term for the assignment of a contract which is completely legal. In fact some states including my state will allow you to list a property in the MLS that you have equitable interest in which is a contract to purchase.

I only know of 1 state that has defined wholesaling as brokering and are requiring a license if you do more than a few deals a year. There are likely going to be more as this is a hot topic with several state associations right now.

You do not need to get an RE license to learn to invest in real estate. You can develop property, buy and sell properties and invest in commercial and residential real estate no license required. That being said it can be handy to have a license if your in the business and I am Broker in 2 states. I use them mostly for my own deals.

The best way to get started in real estate is what’s best for the individual based on a number of factors including background, education, experience and resources. I started as a builder/developer/investor before I ever got my licenses and there are millions of very successful real estate investors that have never had a license and will never get one.
There are millions of realtors that have never done a deal and never will so advising people to get an RE license and work for a broker is definitely not the best path to real estate investment success. 

Originally posted by @Greg Dickerson :

@Will Barnard wholesaling as you know is just a slang term for the assignment of a contract which is completely legal. In fact some states including my state will allow you to list a property in the MLS that you have equitable interest in which is a contract to purchase.

I only know of 1 state that has defined wholesaling as brokering and are requiring a license if you do more than a few deals a year. There are likely going to be more as this is a hot topic with several state associations right now.

You do not need to get an RE license to learn to invest in real estate. You can develop property, buy and sell properties and invest in commercial and residential real estate no license required. That being said it can be handy to have a license if your in the business and I am Broker in 2 states. I use them mostly for my own deals.

The best way to get started in real estate is what’s best for the individual based on a number of factors including background, education, experience and resources. I started as a builder/developer/investor before I ever got my licenses and there are millions of very successful real estate investors that have never had a license and will never get one.
There are millions of realtors that have never done a deal and never will so advising people to get an RE license and work for a broker is definitely not the best path to real estate investment success. 

Again I will have to disagree with you, wholesaling is NOT a slang term for assigning a contract, not sure who told you that but it is very wrong. Wholesaling, just like buy and hold, flipping, or note buying is a specific real estate strategy and there are many ways to execute a wholesale transaction, including assignments.

 Secondly, having a fully executed purchase and sales agreement with a seller does NOT constitute “equitable interest” in the property, you should look up the term to get its true definition as it relates to this topic.

I do agree with you that getting a license is not necessary, I merely pointed it out as a good way for someone new to get started, it is not the end all be all you implied I said. I also agree that each individual person should decide what is best for them based on info they receive. This poster has my opinions and that of others to work from.

I personally did not start off my investment career by getting a real estate license but I suggested that it was a good idea because had I have got my license back then, I am confident it would have opened up many more doors for me earlier rather than later and allowed me to make more money per transaction representing my own deals or getting legal referral fees.

@Will Barnard the concept is called Equitable Conversion. This law states that when a buyer and seller enter in to a binding contract the buyer becomes the equitable owner. I have included a link to the legal definition for your reference. https://definitions.uslegal.co...

This is also where the Specific Performance law comes in to play which is an equitable remedy to breach of contract usually by a seller. I have prevailed in 2 of these cases where I sued for specific performance when a seller tried to back out of a contract on a multimillion dollar purchase. My equitable rights and interest in the property where upheld. I have included the legal definition of this concept for you as well.

https://definitions.uslegal.co...

Greg, there appears to be some confusion here in our discussion and for clarity’s sake for the benefit of all reading this, I don’t disagree with the fact that equitable title provides certain performance protections by the buyer and I don’t disagree that you won two cases for breach of contract from sellers.

But do realize I specifically stated above that "as it relates to this topic" - this topic is about wholesaling and having equitable title certainly provides protections for equitable conversion, what it does NOT provide is the legal right to publicly market the property prior to the buyer obtaining the title which would constitute legal interest. Anything short of that is brokering without a license and that is what you and everybody else needs to realize. I don't know the laws in the state of VA or all 50 states, but I do know that many of them do. It allow anyone other than the legal owner (or the legal owners licensed real estate agent) to market a property for sale.

Wholesaling is not illegal just like driving a car is not illegal, however, many violate laws in wholesale transactions just like many drivers violate laws while driving.

I hope this clears the air for all.