REI ETUTOR Wholesaling. REI eTutor What is Wholesaling? Buy at a discount. Sell at a discount.
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Transcript of REI ETUTOR Wholesaling. REI eTutor What is Wholesaling? Buy at a discount. Sell at a discount.
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REI ETUTOR
Wholesaling
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Wholesaling
REI eTutor
What is Wholesaling?
Buy at a discount. Sell at a discount
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Wholesaling
REI eTutor
Benefits of Wholesaling
No money down investing
Earn cash today
Easiest method to enter the real estate market
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Wholesaling
REI eTutor
How to Make Money WholesalingEquitable rights
Allows you to market propertyProperty is marketed to investors (rehabbers)
or landlordsMoney is made between your purchase price
and end-buyer’s purchase price
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Wholesale
REI eTutor
How To Make Money Wholesaling
Two methods to close wholesale dealsAssign your contract
Have a double closing
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Wholesaling
REI eTutor
Assigning Your ContractWhat is a contract assignment?
Assigning your right for someone else to buy the property.
Original contract should contain the language “and or assignee”
All contracts are assignable unless otherwise stated.
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Wholesaling
REI eTutor
Assigning Your ContractBenefits
No closing costs Simple one page assignment
Pitfalls Everyone involved in the transaction knows your
profit
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Wholesaling
REI eTutor
Double ClosingTitle company of law firm handles both
closingsYour close with the end buyer firstYou then close with the sellerYou are handed a check for the difference
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Wholesaling
REI eTutor
Double ClosingIs this legal?
Yes!Benefits
Profit is hiddenPitfalls
Cost of the closing
Tip: Only use in situations with a large profit margin and have a title company or law firm lined up ahead of time.
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Wholesale
REI eTutor
How to WholesaleStep 1: Locate a Seller (Not a Property)Step 2: Analyze the LeadStep 3: Make an OfferStep 4: Property InspectionStep 5: Contract (Negotiation)Step 6: Find a BuyerStep 7: Closing
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Wholesale
REI eTutor
Locate a Seller (Not a Property)Goal is to find a motivated seller
Properties are not motivated Properties are no good if you can’t find the seller
Psychology of the Seller Why is the person selling the property What are his/her needs
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Wholesale
REI eTutor
Locate a SellerBandit signsWebsiteCraigslist adsE-lettersYellow Letters
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Wholesale
REI eTutor
Analyze the LeadDoes this property have wholesale potential?If yes:
What are the estimated repair costs What is the As Repaired Value (ARV) What would an investor pay for the property?
Your offer must be lower than what the investor would pay.
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Wholesale
REI eTutor
Analyze the LeadIf no:
Would this home be worth rehabbing? Would the seller be interested in owner financing? Would the seller be interested in a lease option?
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Wholesale
REI eTutor
Make an OfferDepending on the property, have an offer
available for each type of scenarioIf your offer is rejected:
Find out what amount they are looking for If realistic
Adjust your profit if you feel the property can sell fast Perform a property inspection to see if the numbers
can be adjusted Always mail a written offer to the seller even if rejected
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Wholesale
REI eTutor
Property InspectionWe highly recommend inspecting the
property either during or immediately following the offer phase. Why? Avoid wasting time with sellers who are not that
motivated.What to look for?
Structural damage Roofing repairs Curb appeal potential Interior cosmetic repairs
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Wholesale
REI eTutor
Property InspectionLook for:
Illegal additions Placement of electrical and gas meters Functionality of floor plan
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Wholesale
REI eTutor
Property InspectionTake tons of photosTake 30 to 50 photos
Outside angles Every room Every closet All damages
Two Purposes You never want to revisit a property to double check
something Can email pictures to potential buyers
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Wholesale
REI eTutor
ContractPresent the seller with a contract when:
Verbal agreement of offer or Mail a contract if offer is denied but the seller is motivated
***Use Our Contracts as a Sample Only***Avoid losses by having your contract reviewed by
an attorney. We are NOT lawyers Contracts may have to be worded differently depending on
your location
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Wholesale
REI eTutor
Find a BuyerBuyer’s lists are important!
Don’t have one? Start one today!If you have a buyer’s list
Put together an email package Property location Photos (Interior and Exterior) Comps
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Wholesale
REI eTutor
ClosingInterview title companies or law firms for
closingsMake sure they do double closings so you
have this option available.Enjoy the profits from all of your hard work
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Conclusion
REI eTutor
REMEMBEREvery Offer Does Not Result In A Deal But
Every Deal Is The Result Of An Offer