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Download “A-Team” Approach - 56 Wholesaling Secrets
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www.realestatewholesalesystem.com 6 steps to 6k in 16 days Wholesaling FSBOs and REOs 1 Benefits of Wholesaling Fast Cash – 30 days or less Little or no money required Minimal risk Sell to a pool of regular buyers over and over No tenant issues No contractor issues No holding costs No credit needed No or low barriers to entry Profits range from 2k to 20k per deal Can wholesale FSBO’s or REO’s 2 Disadvantages of Wholesaling No real tax shields available Profits are typically less than other forms of real estate investing No long term wealth building or appreciation Remember Risk versus Reward 3 Wholesale Formula After Repaired Value Multiply times 65% Minus Repairs Equals Rehabber “Strike Price” Anything below the strike price is profit 4 Wholesale Example After Repaired Value x’s 65% Repairs Strike Price Anything below 53k is profit 100k 65k -12k 53k 5 Wholesaling Basics Find buyers first If you have buyers you have a business No buyers = no exit strategy FSBO’s = marketing and assignments REO’s = listing agents and back to backs Remember the formula Market on the cheap at the beginning 6 6 Steps to 6k in 16k days Wholesale Profits Marketing and Evaluation Offer Secure contract between “A” seller and “B” buyer Market property to buyer’s list & Sell to “C” buyer Sign contract with “C” buyer = assign contract with addendum Close 7 Elements to Ongoing Wholesaling Success 1. 2. 3. 4. 5. You – what’s your mindset and motivation Your Market – neighborhoods, prices, Your Marketing – for sellers and buyers Your Buyers – your exit strategy Your Systems – automated to repeat over and over 8 Wholesaling for Starters - Four Rules Rule #1 – Keep your marketing strategies cheap Rule #2 – Always be marketing for sellers & buyers Rule #3 - Don’t worry about your brand. You’ll build your brand as you do deals. Rule #4 – Understand your wholesaling sweet spot, prices and what buyer’s are willing to pay 9 Rule #1 – Marketing Strategies Cheap In the beginning spend as little as possible Until you have a better feel for the market and what marketing is working I recommend you keep it inexpensive Once you start to see some results and have a few successful deals under your belt then expand your budget 10 Rule #2 – Always be Marketing for Buyers and Sellers Marketing for Buyers – Free Classified Ads online Referrals Mortgage brokers, Hard $ Brokers, Attend Auctions Attend REIA’s, HBA, and ALA MLS/ Auditor Ninja Tactic Realtors Investor Open Houses Google “Real Estate Investors, Cleveland” Internet Marketing – Squeeze Pages = SIMS Video, Articles, Email, Social, Banners, Websites 11 Rule #2 – Always be Marketing for Buyers and Sellers Marketing for Buyers – $$ Classified ads in newspaper Signs – Bandit and Yard Commercials, Radio Billboards White and Yellow Pages – Covers and C.C. sized ads Direct Mail to Apartments Promotional Material 12 Buyers Rehabbers Landlords Fixer – uppers Builders who do rehabs on the side Get Buyers into properties by telling sellers and agents that you have a partner (funding partner) who needs to see the house. 13 Rule #2 - Always be Marketing for Buyers and Sellers Marketing for Sellers – Free Driving for Dollars – Vacant Houses Classified ads online Craigslist.com, oodle.com, trulia.com, many others Referrals Mortgage Brokers, Attorneys, Attend REIA’s Building code violations – tall grass Internet Marketing Video, Articles, Email, Social, Banners, 14 Rule #2 - Always be Marketing for Buyers and Sellers Marketing for Sellers – $$ Classified ads in newspaper Signs – Bandit and Yard Commercials, Radio Billboards White and Yellow Pages – Covers and C.C. sized ads Promotional Materials Direct Mail to Lists Probate, Free and Clear, Expired Listings, Delinquent Tax Sales, Out of Town Owners 15 Sellers Motivated sellers with equity Banks with REO inventory 16 Wholesaling: Branding Forget it Pay for things that result in sellers and buyers and closed deals Build your brand as you close deals Build your reputation as you close deals 17 Know Your Wholesaling Sweet Spot Where do Wholesale buyers want to buy? Inner ring neighborhoods First ring suburbs First time home buyers - they buy from rehabbers If you get something in a prime suburb the rules stay the same If you get something in the country the rules stay the same 18 Wholesaling: Seller Lead System Buy Calls – if there’s equity “GO” Pre-Call Planning – drive the comps Presentation – Hot buttons for selling Negotiation – what’s the least you’ll take? Is that the best you can do? Contract 19 Phone Scripts Where is it located? Sweet spot? What’s it worth fixed up? How much work does it need? “If I could pay you all cash and closed in a week what’s the least you would take?” “Whoew, is that’s the best you can do?” 20 Wholesaling REO’s Network with listing agents and asset managers Let listing agent manage both sides for two commissions Target houses on market for 3 months or more (6 months) Less competition than new listings Make offer with normal Realtor contract Add inspection contingencies Sell using normal contract for B to C 21 Wholesale Closing: assignments FSBO’s “A” to “C” closing Assignment fee paid outside closing Addendum explaining fee and assignment Memorandum of Purchase Agreement 22 Assignments: Contracts #1 Standard Purchase and Sales Agreement Assignment of Contract Addendum Give both to title company 23 Assignments: Contracts #2 Option Contract Notice of Option Affidavit of Contract 24 Assignments: Contracts #3 Option Contract Notice of Option Affidavit of Contract Back to Back Closing 25 Wholesale Closing: Back to back REO’s “A” to “B” then “B” to “C” closing Back to back Profit is spread between the two deals 26 Back to Back: Contracts #1 Standard Purchase and Sales Agreement – “A” to “B” Banks required P&S agreement Contract Addendum – “A” to “B” Banks required addendum Title company – “A” to “B” Standard Purchase and Sale Agreement – “B” to “C” Vanilla P&S agreement As - is where-is Owner of record prior to closing Title Company – Your preferred title company Closing instructions, title commitment, HUD1 from “A”- “B” 27