Wholesale Real Estate Pro

Okay, so if you’ve followed my instructions in step one and really put the time and energy in to educating yourself on your target areas and understanding the value of the property in those areas, then we are ready to move on to learning how much you can pay.

Wholesale Real Estate means buying and selling real estate at a discount. Think of other wholesale companies and what they do, exactly that. They don’t over pay for products and turn around and sell them for retail value. So, it’s the same with Wholesale Real Estate, you buy at a discount and then resell at a discount. That simple.

You set your profit margin when you purchase the property meaning that “you make your money when you buy”, you will here that over and over. Don’t take this lightly. Too many people over pay for property because they are just so motivated to do a deal that there emotions take over…..don’t let that be you. There’s a saying that goes something like this…..”when emotions are up, intellect is down”. This is true. Don’t be the motivated buyer or you will fail right out of the gates. Be patient and find the right deal.

So, how much do you pay…..well, that depends on your negotiating skills. A rule of thumb for wholesale real estate is .50 - .60 on the dollar, but that doesn’t mean you set the bar there. We buy many properties at .20 - .40 on the dollar which yields us larger profits and less holding times. The goal is to buy and resell as quick as possible and the less you pay, the less you charge and the quicker it moves. You want to be the go to person where other investors come for good deals. Once you build a reputation with other investors, then it will make turning profits quick and painless. We will talk more about building your list of investors to sell to in future articles.

A quick summary.

• Wholesale Real Estate means buying and selling real estate at a discount.
• Don’t be a motivated buyer. Be patient and find good deals.
• You make your money when you buy
• Don’t be emotional
• Never pay more than .50 - .60 on the dollar of the retail value of the property
• Buy low, sell medium and quickly
• Build a reputation with other investors as the “guy (or gal) with the good deals”

Remember, Wholesale Real Estate is not easy and you won’t get rich over night. But if you work hard at it, you will make A LOT of money!

Step One, Doing your homework.

This is one of the more crucial elements to becoming a wholesale real estate investor that people miss. There may be some businesses out there that you can just dive in to without doing any research, but I don’t recommend it for this one. I even recommend for those who have a little bit of experience to really think about whether they are educating themselves or not.

As a wholesale real estate investor It’s important to understand some of the aspects of the business and what you are looking for in particular. Although you don’t need to study for months at a time to be successful, you will need to do a little research.

Where to start your research

1. Pick some neighborhoods as your target. One or two will do to start. The more narrow your focus is, the better your results will be. We are looking for median neighborhoods to start our wholesale real estate business. So ideally neighborhoods where middle class folks live. Cookie cutter neighborhoods are a great place to start, you know where all the houses look the same. Depending on your area, will depend on the price points. A good gage is an average of 150,000 priced homes in most areas. Houses built in 1970 or above are best as they usually have less problems. Brick ranch style houses are great!
2. Get to know your target neighborhoods. Drive them daily, twice daily if possible. Look for signs of crime, heavy foot traffic or any other red flags. Remember, you want to buy a house that will sell easily to someone with a family or that will feel safe. Although you will not be retailing the house yourself, the person buying it from you will be and they won’t buy it if it’s in a crime ridden neighborhood. Start looking for vacant or abandon houses, these are your first target properties that you want to focus on. Write down the information such as the address of the house, what it looks like, what kind of condition it’s in, etc. You will need to know all this. In future articles we will get more in to detail about these items, but for now you just need to familiarize yourself with the neighborhoods.
3. Get some comps. Comparables are necessary for you to know how much you can pay for the house or at least get it under contract. So, if you are familiar with Real Estate and feel comfortable doing your own comps you can always go on Realtor.com and pull area specific comps. The only problem here is that you don’t get a lot of the important information. I would recommend talking with an agent or a broker to get some true comps. You need to know: average days on market, price per square foot, % of asking price obtained, etc… Remember to only compare similar houses, for instance you need to have different comps for a one story and a two story house. Make sense? Good!

Okay, now you have someplace to start. Get started on doing your homework and I would suggest not to cut any corners. Spend some quality time on this, after all you are building a brand new business for yourself so give it 100%. If you are not willing to do this step, then you might just as well quit now because you WILL FAIL!  

 Learn more about wholesale real estate simply just keep coming back.

It Takes Money To Make Money…..Or Does It?

Nope, absolutely NOT! Not as a real estate investor anyway. The person who told you this is likely trying to justify why they are broke. What you are going to learn here as you come back is a step by step guide on how to make money in real estate starting with NO MONEY! It doesn’t matter if you have no job, no credit, no friends, negative net worth, bankrupt and you are absolutely broke!

The fact of the matter is that, if you can’t make money with no money, then you can’t make money with money. In the case of real estate investing, it’s likely to hurt you if you have money than if you do not. Too many times do we just throw money at problems to try and fix them. You are better off broke to start this journey.

The key is to leverage your time and your brain. Stay in control, follow the path of what someone successful left for you. There have been many people that succeed ahead of us in areas of our lives and too often we don’t follow them. We try and make our own path because we think it’s better or that we’re smarter. Don’t make this mistake. There is no room for egos in real estate investing.

A few things you need to understand before you move forward.

1. Don’t be a “Flipper”. If you are just starting out in real estate investing the last thing that you want to do is rehab and flip a house. You just don’t simply have the skill set and knowledge to pull this off. There are too many unknowns and variables when it comes to rehabbing a house for a profit. Be a wholesaler. That’s what you will learn here. If you had some big dreams and thoughts of being a flipper, then I apologize for bursting your bubble, but trust me it’s for the best!
2. If you take rejection personally, then this probably isn’t for you! I don’t mean to be a downer, but my purpose of this blog is to give you the truth and not to sugar coat things like some late night TV infomercial! This business is hard and there is a lot of rejection.
3. If you have the work ethic of a slug. FORGET IT!

I’ll leave you with this. Real estate investing and wholesaling properties is for true entrepreneurs. Those who are willing to do what’s hard now so that the rest of their lives will be easy. Those who have the “I’ll do whatever it takes” attitude is who this is for. If you were hoping for some song and dance about how you are going to get rich over night with no money down, then I apologize. However, if you have the right attitude and work ethic then you can do EXTREMELY well with this business. It’s really just a matter of choice.

Finding Texas real estate on the internet
Internet has broken all barriers of information sharing. Now you can just post a piece of information (business or otherwise) on a website and it is immediately available to millions of people across the globe. The impact of internet has been seen on all businesses and industries and real estate industry is no exception.
Today if you were looking for Texas real estate, you can just get on to the internet and either use a search engine like Google (or Yahoo or MSN) to find “Texas real estate” or just go directly to some site that specifically deals in Texas real estate (or just in real estate). In seconds, the search engine will come up with several search results for you, all catering to Texas real estate. And you can do all this from the comfort of your home, with complete disregard to the weather outside. Moreover, you don’t need to be in Texas in order to be able to search for Texas real estate.

Most sites that cater to real estate (Texas real estate or otherwise)  would give you several options for customizing your search results for Texas real estate i.e. you can specify your requirements and the website will then bring up only those results that match your Texas real estate requirements. That further takes away a big task from you. You can just go through the results and check the ones that look appealing to you.

Some websites even give the option for storing your selected results i.e. you can choose the Texas real estate search results that seem good and mark them up on the website for viewing later. Then later you can get all the marked results in one page (or more depending on how many search results you have marked) and you can further shortlist those Texas real estate listings. What could be better, you can even do your viewings of the selected Texas real estate listings on the internet and you don’t need to make an appointment even.

So once you have your final shortlist of say 10-20 Texas real estate listings, you can just see the view or pictures of the property on the website itself (not all websites offer this feature and not all listings have images/video available) and reach close to a decision on what Texas real estate piece you want to go for.

So finding Texas real estate on the internet could really be easy and a lot fun too.