People often have the belief that you need money to make money. Many new real estate investors start in real estate and want to focus on trying to do real estate investing with little or no money. The question always come up as I travel the country, “Can I make money in real estate with little or no money?” The answer is YES! Wholesaling in real estate in an option that most new real estate investors begin doing.
Let’s take a look at the daily life of a real estate wholesaler. As the real estate wholesaler wakes up in the morning, they may reach to turn off the alarm clock and take the short walk to grab a toothbrush to start the day. They may get a little orange juice or coffee and then turn on the computer. There are so many great deals that are out there, just clicks away in the computer. So many real estate deals with so little time and some cases money! The computer can unleash a bundle of deals at any time. It is up to the aggressive real estate investor to make well calculated offers that in most cases will create the deals that their cash buyers are looking for. In most cases these real estate deals can be tastier than a hot toasted English muffin with fresh strawberries and jam!
Wholesaling Tip # 1 – Always have an Exit Strategy for every real estate deal you want to do!
As you review each potential deal, you have to have an exit strategy to know what you will do with the deal if you get it at the right price. Often real estate investors across the country tell me that they have found a potentially great deal. I can hear the excitement in their voice and see there face light up with a huge smile from ear to ear. I will reply it sounds like a great deal but what are you going to do with that real estate deal if your offer gets accepted? They often say “I am not sure but it is such a great deal!” Once again, I repeat but what are you going to do with the deal once you get the offer accepted?
It is critical you know what you will do with a real estate deal before you even make your first offer on it. The exit strategy often will directly impact the amount you offer on the property. The bottom line is to always have an exit strategy or strategies in place before any offers you make!
Wholesaling Tip # 2 – Always have a rock solid cash buyers list!
As we just discussed in tip #1, the most important thing about doing a real estate deal is to know what you will do with the property before you get the deal. So often than not, new real estate investors are chasing the deals rather than the cash buyers. If you plan on doing wholesale type of deals, such as Assignments or Back to Back Double Closings, you should be chasing the cash buyer not the real estate deal. The Cash Buyers always come first, not the deal!
Wholesaling Tip # 3 – Always be able to determine the true cash buyers from the pretenders that talk a good game!
The most important characteristic when it comes to buyers is the quality of your buyers rather than quantity. I would rather have 5 to 10 actual cash buyers for every target market area I work, than a list of 100 cash buyers that at times I have to question will they really buy?
I often call this the Players vs. the Pretenders Game. How many people just talk a good game when it comes to buying real estate deals and how many people are actually doing the buying. Find out and work with the players and let the pretenders sit on the bench!
Wholesaling Tip # 4 – Always remember with Cash Buyers, it’s Quality over Quantity!
Why is this important you may ask? If you get a hand full of quality buyers you are ready to start make offers and locking up deals. There comes a point in time where you have to take action. It is like in college some people take so many classes and change majors and take more and more classes. Rather than get into a professional they have become a professional student. As an investor search for quality of your buyers rather than just trying to build up a large quantity of buyers.
Wholesaling Tip # 5 – Always create a profile on each of your Cash Buyers!
This is crystal clear for you that the buyer will tell you:
1. What type of properties the cash buyers really want
2. Where do the cash buyers want the properties – location, location, location!
3. How Much are the cash buyers willing to pay for the deal – How much of a discount do they need to make the deal work or how much are the cash buyers trying to make from each deal?
Think of yourself like a personal shopper for these cash buyers. They tell you what they want and you find what they are looking for. When you find what they want, where they want it and the price they want it for, you are well on your way to your next real estate deal. The best part is Wholesaling is a great way to start in real estate investing with little or no money down. We all love a little shopping so get out there and see what deals are around the corner. You might need a big shopping bag or a large bus for all those offers you will be making. Live life in the moment with no regrets! Believe and Achieve! – Joe Jurek