3 Stellar Strategies: #1 Wholesaling

plan Do you know what are the 3 main components of a successful real estate investing business?

You see REI, you feel it… you keep trying to weed your way through it every day. There’s so much real estate investment junk and bunk out there, and you usually only get a taste – a sliver, if you will – of what you really need to know to make it in this business.

That’s why I’m here today, Matt Andrews, to share the 3 main components of REI with you and discuss the various strategies you can apply these components to. See, I’ve helped many investors solve their strategy and lending problems, and I’m going to do the same for you today.

It’s all about gaining as much REI wisdom and experience as possible, and believe me, I’ve been there, done that – and taking action on it. I’ll share some success stories with you today as well, but REI all comes down to this – building long-term, sustainable success and wealth.

Look, real estate investing isn’t rocket science, but it takes strategy, patience and knowledge to make money. Whether you’re a house flipping veteran who needs better deals at deeper discounts and access to more leverage or a rookie just starting out, I can help you put the pieces together and use the right type of funding to make big money – now.

So let’s raise your game, shall we?

3 Components of a Successful REI Business

Maintaining a successful real estate investment business requires a laundry list of key components, but these 3 main factors - when moving and grooving together – can put you on the fast track to financial freedom.

1. Strategy – This is a proven, step-by-step blueprint that generates measurable results.

2. Funding – This is the financial backing to scale your business, to give you more credibility, and to give you access to exclusive, elite property deals.

3. Partners – These are the experienced consultants and mentors who can help you overcome obstacles as you grow.

With these 3 key components, you can execute any kind of deal, whether it’s wholesaling, flipping or buying & holding.

And today’s lesson is all about wholesaling…

The Beauty of Wholesaling

Just in case you need a quick reminder, wholesaling is when you buy or gain control of a property at a discount for the purpose of slightly marking it up (or adding a fee) and selling it to an end buyer. It’s usually a quick transaction that involves a cash investor and often a distressed seller and/or property.

It’s great for newbies, because you need very little start-up capital. It can be implemented in any market, and it requires the least amount of experience. So you can clearly see why most rookie investors (and those who are now experienced investors) start and continue in the wholesaling business.

Now, a typical profit on a wholesale deal is pretty sweet, ranging from $5,000-$10,000.

Many times, the process involves locking up a property on contract, and that happens either by assignment of the contract (my favorite way) or by a double close.

With the assignment method, you - the investor - sign a purchase and sale agreement with the seller and then assign your rights of that contract over to someone else (an end cash buyer) for compensation. It’s a simple way to make a nice assignment fee.

house During the double close, the second transaction funds the first. There are three parties involved in this transaction, and you need a reliable title company to make this happen.

So the key question is: Where do you find houses if you’re a wholesaler?

There are lots of ways, but you can find distressed sellers with advertising (direct mail, bandit signs, etc.) and online marketing techniques. The important piece is finding people who NEED to sell quickly (not just want to sell) and get those leads coming your way. Bank-owned properties and government properties (HUD properties) are other sources.

Co-wholesaling and partnering with other investors in your area is also a great way to get your feet wet, learn the ropes and split profits along the way. This is a great strategy for beginning investors.

Here’s a bonus: Pay attention to notes and land contracts. There are lots of opportunities in non-performing notes all the time, so take advantage of that strategy as well.

A Few Case Studies to Pump You Up

Here’s how effective and awesome wholesaling can be - true stories…

I had a seller in Grand Rapids, Michigan call me from a direct mail postcard. She inherited a property and wanted to sell. The property was worth about $40,000, but I offered $15,000. The seller countered at $25,000, and I made my final offer of $18,000. She accepted.

Then I assigned the as-is contract to another investor (so I basically sold my rights) to another investor for $10,000. So his purchase price at the end of the day was $28,000. He got a great rental property, and I made just under $10,000 on the deal for very little time and effort AND without investing any of my own money!

story Here’s another successful deal. Ready for this?

I got 2 deals in Tampa, Florida from a bird dog that were worth $150,000 combined. I contracted the properties at $110,000 then assigned the contract to my end buyer (who came to me through a Realtor) for $12,000.

When it was all said and done, I made a net profit of $11,587.

P.S. – I was sick in bed in India as this all went down, which just shows how you can work these deals and make bank even from the comfort of your (germ-infested) bedroom. That is how you virtual wholesale!

I’ll give you one final example of how quickly and easily you can make money wholesaling - pay close attention to this one...

While I was in Costa Rica, I wholesaled a house in Florida that was owned by a guy in Ireland, to a guy in Australia. The end buyer came to me through Google, but I didn’t have any inventory at the time. So I partnered with another investor who had properties for sale (the guy in Ireland).

I marked up the properties by $7,000 and closed with the double close method – while enjoying vacation in Costa Rica. Good day, good deal!

The Wrap Up

The examples go on and on, but the bottom line is you can keep doing deals on your own terms, on your own time, from wherever you darn well please IF you have the right strategies and methods in place.

This is why I love the wholesaling method, and now you know how to make it work for you.

Next time we meet, we’ll talk about the flipping strategy. Stay tuned!