I have a few people that I know who keep telling me that they want to be a real estate investor. Yet here it is a year later and they still have not even attempted to do a deal.
Here’s what I hear:
I don’t know what I am doing . . . well go buy a book, a course, take a class. They all will give you enough information to get started and do a deal. It’s not rocket science and most of the available training will give you enough information to be able to get started.
I don’t know the contracts. So again those books, courses, and classes are going to give you a contract. But if they do not – you can pull forms and contracts off the internet fairly easily – so a search for the following and you will have enough in the way of contracts to actually do a deal:
- Purchase and Sale Agreement: Use this to buy a house from a seller and to sell a house to a buyer.
- Assignment of Contract: If you get a house under contract and want to wholesale it to someone else, use an assignment of contract to assign your interest in the contract to a 3rd person.
- Financing Addendum: If the buyer in the transaction will be getting financing, you would need one of these that outlines the financing terms. Some purchase and sale contracts have this information included in the main contract.
- Lead Based Paint Disclosure Addendum: If the house in question was built before 1978, you need one of these.
That’s it, all you need to go buy a house and sell a house. If you want to get fancy and do a subject to or lease to own or an option contract you might want to get a special form or two for these, and I strongly recommend again buying a course on the subject or talking to a mentor. You might even be able to obtain some of these forms and documents from our library here at MAREI or by asking questions of other members on the message board.
I don’t know how to fill out a contract. Well if you have the form in hand, fill in the blanks and your contract is filled out. Again if you get stuck, you might ask the person who provided the contract or your title company what they would recommend.
What if I get in a deal and it does not work? For example I get a house under contract and plan on wholesaling it but can’t find an end buyer so I can’t close. That’s where clauses come in.
- One clause might be that “If buyer fails to purchase by agreed upon date, the only recourse seller has it to keep earnest money deposit”. That way if the buyer does not buy as agreed, the seller keeps the earnest money. Then when you write the contract, make the earnest money deposit low, so you could loose it.
- Another might be that “Buyer is purchasing property to resell. If Third Party buyer is not found, Buyer will not purchase property.
You can write anything into a contract in simple plain English that both the buyer and seller agree too.
Next I hear – I can’t find a great deal. Which probably holds a lot of people back, but the I ask, what are you doing to find a great deal?
- Are you advertising online – say craigslist that you buy houses?
- Are you calling for sale by owner ads?
- Are you mailing letters to out of state owners?
- Are you putting up flyers in neighborhoods?
- What are you doing?
I can honestly tell you that some people are cut out to be real estate investors and some should keep their day jobs. As a leader at MAREI I have seen 10 people join at the exact same time, take the exact same training, and two of them will be out doing deals with in 30 days and 2 will need want to study a bit more and be doing deals with in a year. Two will never do a deal because they are want to make sure they know everything there is to know before they do anything, and if you are waiting till you have perfection, you will never do anything. And then the other 4 decide its not for them, and that’s ok too!
If you are going to be a real estate investor, just go do it. Pick up a training course and follow it step by step to the letter and you will be doing deals.
Ask some of our members who are doing deals and you can probably figure out who they are – they have ads in the MAREI message board all the time.