We get this question here at MAREI several times a year and usually the person asking the question wants us to explain the ins and outs of wholesaling to them on the phone in 10 minutes.
Sorry, it does not work like that. There are quite a few moving parts and we can’t just answer a few questions and get you on the road to wholesaling success.
Here’s what you need to learn.
- What is a Good Deal: To know what a good deal is you need to know how to figure out what a house would be worth all fixed up. How to figure out what it needs in repairs and what that would cost. What are the costs of money and how much is the average real estate investor going to pay for any given property. To learn this, you are going to have to PRACTICE A LOT.We recommend when you are first starting out to go look at every house you possibly can and learn how to spot needed repairs. Do some research to learn what repairs costs. Practice estimating the repairs. Research each property to figure out it’s after repair value. Practice calculating what an investor would pay for it.I would suggest talking to the Hard Money Lenders here in Kansas City – many of them offer a small workshop on how to work the numbers. This can be most helpful in learning how to figure out what an investor would pay for a house.
- Find a Good Deal: Next you have to have properties to look at and make offers on. To get those deals coming in you need to market for motivated sellers. There are 100’s of ways to market for motivated sellers, from direct mail, to google ads, to craigslist, to your website, to bandit signs, to word of mouth and more.Marketing for Motivated Seller can be hours and hours of training. Personally I have gone through about 5 different guru courses and listened to numerous webinars and read lots of books and continue to learn how to market. The concensus is you have to learn the best way to direct mail market and you can generate leads. I also think a great website is very helpful too.
- Create the Deal: You have to listen to the seller to find their pain. Why are they selling the house? If you can find their pain and then solve their pain by buying the property, then you may have a deal. It’s all in knowing what is a good deal and how to negotiate with the seller to find a way you are both happy.The art of the deal will be years of practice and training. I know gurus who are experts on putting deals together who regularly get together with other experts and compare notes. They are continually looking for new ways to help the motivated seller solve a problem.
- Get Paid: Once you have the deal, you need to sell it to get paid. The easiest is to get it under contract and then assign the contract. But remember if you are assigning the contract that you DON’T OWN the HOUSE, but a contract. So you need to quietly market to your own personal buyers list your contract and the assignment, not the property.You may want to buy the house and then sell the house, which is what I primarily do. We buy the house cash and then turn around and figure out the best way to sell it. Usually for us that is to market it to our cash buyer list, other times it is to do a little fix and clean and list it retail to an owner occupant buyer.Because we are Realtors, we also look at listing as a way to get paid.
If you want to learn how to wholesale, I have some resources for you:
1. Member Library: As a member of MAREI, you can loginto MAREImember.com and find the wholesale section in the MAREI Member library. We have a lot of information there you will find helpful.
2. Attend the workshops at MAREI in February on the 14th & 18th for Tom Zeeb’s Rapid Cash Generator Classes – they build on each other.Tuesday night he will be sharing his blueprint as to how he runs his wholesale business and makes money without money in real estate. He will have a take home bonus on online marketing to help you with generating motivated seller leads. On Saturday he is going to be teaching some of the more key principles needed for wholesaling and offering another take home bonus on how to package your wholesale deals for the rehabber.
As a wholesaler for many years, I am looking forward to these two events and I just came from a workshop this past weekend where we spent half a day talking about marketing that put some new ideas and resources into my plans.
3. Online Research: You can also go to the internet and do some research on wholesaling houses There is a wealth of information out there. A lot of it is free, although free can get costly if you have to spend hours and hours locating it, absorbing it and then finding it’s not quite complete. Two online resources that I like are BiggerPockets and CREOnline as well as the MAREI Facebook Group which are all great places to ask a question or two.
4. MAREI Business Members: We have several business members who also hold classes and events. Crossroads Investment Lending has a white board session once a month to break down deals and work numbers and Price Properties has a deal maker’s session once a month where wholesaler’s can pitch deals.
Article provided by Kim Tucker. Kim and her team at KCInvest have been buying and selling houses in the Kansas City metro since 1999.