Re: Newbie

GMan — Sun, 07 Oct 2007 20:59:45 GMT

The fastest money is made by not even purchasing properties. We tie them up with a contract and market it immediately to our investor list. Most of the time you won't close in your name, unless it's a double closing because you filled out the paperwork incorrectly. You can build your list in your local area with newspaper ads, real estate forums (like this one), a website or newsletter, postcards, real estate investment clubs, courthouse records, mortgage brokers, banks, real estate agents, lawyers, title companies, or putting up bandit signs in the neighborhoods. If you can find a good deal, other investors will be glad to pay you a fee of several thousand dollars and they will close on the property. You can collect from the investor, have the title company cut you a separate check, or negotiate whatever suits you that is legal in your area. The big investor, usually someone who rehabs a lot of property, is glad to pay you since good deals are hard to find and wholesalers take a small amount of the total profit.

I'll use the analogy of auto dealers. Retail car dealers sell new and used cars, but most of the trade-ins will be sold to wholesalers immediately. These wholesalers (us) take the cars (houses) to auctions (Rehablist.com) or sell them to smaller car lots (your buyers list) and take a small profit. But occasionally they will have a client who is looking for a specific car, and they will go find that car for them and make $1000 to $5000 profit while still giving them a good deal. It's always easier to find a property (car) for a buyer, than it is to find a buyer for a property. Wholesalers of houses are the same, but you want to grow your business so you can get a profit on many of the houses that are selling in your area. That's why we try to build a big list of ready, willing, and able buyers who will purchase our excess inventory and keep coming back for more. Repeat customers are the key to any business except funeral homes.

One of my friends buys and sells 30 to 40 cars each month at an average profit of $1500 each. It's a fast market. If you're in a populated area, you can do a large volume business wholesaling houses, and the markup is better because of the higher priced product. But there are fewer houses selling at any point in time than there are autos.If you think about it, almost every family has several cars, but only one house and many of those are renters. The people who buy these rehab/rental properties are the ones you want on your buyers list. They have the cash, credit, crews, and company that can handle large volumes. But, one person can only look at a limited number of houses and it takes many leads to find a good deal. Rehab contractors/landlords need wholesalers to find property to help keep the remodeling crews busy. Specialize in an area, neighborhood, or niche and you will become successful.

The person searching for a good deal on a house to buy, fix up, and live in is another good prospect for you. You can offer them a great deal, help them find financing (since you have lenders on your list anyway), and maybe they'll refer their friends. Find 10 people like this who will buy one house a year and you can make a good living. Find 2 per month and you can become wealthy as your list continues to grow.

I guess the bottom line is that you really don't need a loan to get started. Money helps, but you don't need it to get started. Just call all of the ads in the newspaper that say "I Buy Houses." Ask them what type of houses they want and where. Ask them anything, they can't bite you. Usually the ones who answer their phone or who will at least return your call are very friendly and want help finding good deals. Be sure you make enough profit to justify your time. You're their partner who only gets paid if you bring a deal to the table. Build your buyers list while marketing for sellers who need to dump their property fast. Then match property to people. There are dozens of ways to build your lists, but you only need to master a few.

When you find a deal, send out an email to your buyers list as soon as you have it under contract. List it on Rehablist.com so we can help Mike grow this site. Good deals will sell fast...

Good Luck and Happy investing!

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Re: Newbie