The headlines in the media about the economy are enough to scare anyone. Home sales are at their lowest point in years and even premium properties don’t sell for months. Apartment complexes face a shortage of renters as many singles (and others) choose to live with other family members to save money. Retail buildings sit empty as even giants like Circuit City cannot keep their doors open. If you have always wanted to become a real estate investor you may be thinking that now is not the time. Well, I am going to tell you that your wrong for several reasons:
· Even in bad economies, smart people profit. And I am not talking about those who make money on the misfortune of others. These people make money by advising people and helping them use their money wisely.
· Do you believe everything you read in the media? Well, don’t. The media has a reputation for failing to paint a true picture of what is happening, particularly when it comes to the economy. If you let what you read or see on television effect you, you will never do anything in life.
· People are always going to need a place to live, a place to work and a place to shop. There will always be a need for people to buy and sell these properties. Why can’t that be you?
Finding the money and time
Money and time—these are the biggest barriers when we want to make changes in our lives. If you haven’t done your homework and you know very little about investing, you may think you need thousands of dollars. You are realistic enough to know that you do need to research and find good investment properties and that takes time. But what if I told you that there is a way you can save both and still be a successful real estate investor? And this would not be dependent on the economy or home sales in your area? Would you do it? There is a way—wholesale real estate investing.
How wholesaling real estate works
Wholesale real estate investing is so simple it’s scary. You don’t have to have a lot of money—just some great people skills and a large number of contacts. Wholesale investors never own the property outright and never have to invest thousands of dollars in repairs. In its easiest form, it works like this: You find a great property that is for sale. You approach the owner and make them an offer on their home. Always ask other wholesalers whom they market to. I always try and stay away from the booming areas. If you are going after houses that 5 other wholesalers are going after the price tends to get bid up so high on the property that it squeezes all of the profit out. There are several areas you can target and if the saturation rate is low you will be able to pull some serious profits out of the market! This will take some time and some negotiating skills in most cases, but in the end your bank account will thank you!
At this stage is where you will set the terms for how much money you will make. Ask them for the least amount they will take for the property. Then do your homework. Is the property worth that? Do repairs need to be made? What will the property be worth after repairs? How can you price the property in a way that you make money, the owner gets what he or she is asking and the seller is happy?
Once you have determined these values, you ask the owner to sign a contract. In return, you put down a “deposit.” That amount is between you and the owner. Some wholesale investors say they have put down as little as $10. Sometimes the deposit is as much as $1,000. Personally, I never put down more than $100 in earnest money. Remember, always research your contracts before you decide to use them. A good contract can save you time and time again.
With a contract in your hand, you can begin to find a buyer for the property. A good wholesaler has an excellent buyer’s list. You can learn who the best buyers are in your area by networking and running ads in the newspapers, on Craigslist, and by meeting investors at your local REI meetings.
When you approach the buyer, make sure you have all of the facts about the property. You want to present the buyer with a good deal so that he or she will come to you when they are looking to buy property or be willing to purchase property from you again. Repeat business will help you grow your investments.
Once you have a buyer, and a solid contract in hand then you can proceed to get the deal closed. Make sure you find a good title company that is investor friendly. Once you make that connection your life will be a lot easier, trust me!
While it sounds like it takes a long time, some deals do and some don’t. Some properties are sold within 24 hours. Even if the deal takes a while, wholesaling is still the safest investment with the least risk for you.
Expect Greatness & Nothing Less