Posts Tagged ‘wholesale properties’

Can you wholesale a short sale property?

Thursday, January 20th, 2011

Wholesaling properties, or flipping properties, involves selling a property at wholesale price to another real estate investor.  This is the easiest and fastest way to make money in real estate investing.

If you have negotiated a discount with the bank in a short sale, can you flip the property successfully to another investor?

This article explores the possibilities of wholesaling a short sale property.

In order to wholesale a property, it is necessary that the difference between your buying price and selling price leaves you a profit. Wholesale real estate investing involves finding greatly discounted properties, then finding a buyer, usually a real estate investor to buy it.

You sell it at a discount because the buyer does all the repair and you walk away with some money. This can be as little as $3000 to as much as $15,000.

If there is no enough equity in the property to allow you to make a profit, it may be possible to negotiate with the bank so they accept less than the mortgage balance. This is called a short sale.

If you create equity through a short sale, the banks require you to close usually within 30 days.

Let us explore different scenarios:

1)      Assigning a contract

In order to wholesale a property, you can simply assign a contract to the real estate investor buyer. For this, your contract needs to have the buyer “and or assigns”. Banks do not allow this clause, so this method is out if you are doing a short sale.

2)      Simultaneous closing

The next method involves buying and selling the property on the same table in a simultaneous closing, also called a double closing. As a real estate investor, you walk away with the difference.

One way of funding a simultaneous closing is using the buyers funds to close the first transaction where you buy. A lot of hard money lenders did not mind this. However lately, most of them will not accept this.

In addition, if you negotiate a short sale, the bank will not allow you to use the buyer’s funds to close the first transaction. This means you must have the money to close it.

Hard money lenders also offer transactional funding, used for just closing the first transaction, making this transaction possible.

3)      Seasoning issues

Lately, if you negotiate a short sale, more and more banks are now requiring that you hold the property for at least 30 days before you sell it.

This means that you can get a hard money loan, buy the property and flip it 30 days later. However, you of course have to take into account the buying and holding costs involved.

Of course, this filters out a lot of deals that would have made you lots of money without this clause. A deal that makes you $3000 to $5000 does not fit into this category. You would have to focus on higher dollar properties to make this work.

No matter whether you wholesale houses, do short sales, buy or sell houses or whatever your real estate investing   business model is, it is necessary to close more deals using less effort, time and money to make more profits. Learn how you can automate your business using an interactive real estate investing website.

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How to make quick profits in real estate investing

Saturday, January 16th, 2010

The fastest way to make money in real estate investing is buying and selling houses at wholesale prices to other real estate investors wholesale real estate investing, also popularly known as flipping houses.

It is also the business model that requires the least amount of cash invested into any deal. Sometimes I spend no money of my own at all. Here is how it works.

1)      Identify houses well below market value

The best way to get houses below market value is to target motivated sellers. These are people who really need to sell their houses. People in some kind of trouble and own real estate always get into my mailing list of motivated sellers. I target people going through divorce, have liens, have inherited properties, in foreclosure, etc. I also target expired listings from the MLS – these are really looking to sell but they are not successful.

Secondly, I try to target only those people who have owned their house for at least 6 years, meaning they probably have some equity. This is necessary in wholesale real estate investing.

2)      Mail out marketing pieces to your leads

I generally send two postcards spaced 30 days apart to each of my motivated sellers. If they have inherited property, I send them a series of letters for about 8 months. This is because the probate process can take time and I need them to think of me first when it is time to sell.

In my marketing pieces I always include my website address more conspicuously than my phone number. I want them to visit my website so they can find out about me and my business without having to ask so many questions. My real estate investing website is built to convince motivated sellers that I am the best person to buy their house and solve their house needs.

It also convinces them to submit their house information right there on the website so that I get a fully pre-screened and pre-negotiated deal that only needs a few minutes of my time to decide of it s a deal or not.

3)      Make reasonable offers

All my offers for wholesale deals are less than 65% of the full market value minus estimated repair costs. This is why this business model needs houses with equity.

4)      Sign contract to buy

Once we have an agreement, we execute the contract. I then fax it to my title company so they can begin title work.

5)      Identify a wholesale buyer

This is the fun part of wholesale real estate investing. I have built a big lists of real estate investors looking for wholesale deals in my area.

I usually list my property on my real estate investing website, then send out an email to my buyers list. They can view all the pictures and video virtual tours along with all any documents (like comparable sales, etc) right from my website. They can also share these deals with their friends on social networking media like Twitter, Facebook, etc. The website always offers them and their friends the opportunity to join my investor buyers list so that they will be notified when new deals become available.

I also target real estate investor buyers from Craigslist and the local newspapers. In all cases, I always send them to my real estate investing website instead of a phone number.

6)      Sign contract to sell

Once I identify a buyer with cash, we then sign the contract. This can be a simple assignment of contract where I assign my contract for a fee, say $5000. It could also be a full contract just like I own the property if there is enough money in it for me. The title company closes both transactions on the same table where I buy from motivated seller then sell to my investor buyer and cut me a check for the difference.

I walk home with a check without spending any of my money. This process usually takes 2 to 4 weeks from the time you get the deal to the time you have a check in your pocket.

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Websites For Flipping Houses

Saturday, September 26th, 2009
House Flipping Website

House Flipping Website

If you are a real estate investor that sells houses to other investors at wholesale prices, then you must have a  website for flipping houses for your business.

 First, what is flipping houses?

Flipping houses (or wholesaling houses) involves locating houses at below market prices, then “flipping” them to other real estate investors at a discount. This is one of the fastest ways to make money in real estate. It is also the real estate investing model that probably requires the least amount of work and cash invested into each deal.

The process goes something like this:

1) You (Real estate investor) locate discounted or distressed property puts it under contract

2) You then take this contract to the title company with earnest money to get the title work done. This is necessary to ensure the property will be delivered free and clear

3) You locate another real estate investor who does not mind putting in more work and time into the property. You the ”sells” this property to the new investor (wholesale buyer) through one of two methods:

Assigning the contract:
This involves assigning the contract to the new investor for a  fee (assignment fee ). The wholesale buyer closes on the property himself.

Double closing (simultaneous closing):
If the profit margin is high, you actually close on the property yourself, and sell it to the wholesale buyer on the same closing table. This is why it is called a simultaneous closing (or double closing). Your title company should be able to guide you through this.

The wholesale buyer ends up doing most of the work (such as repair) and makes more money eventually after they fix and sell. You have to leave more money on the table for the wholesale buyer. Typically, you must locate properties for sale at 65% of market price minus repairs or less if you are to wholesale a deal successfully. Most wholesale buyers will express less interest when the profits go below this figure.

Web Sites For Flipping Houses

I use my  real estate investor website to sell my houses fast. With these websites, you get several key features that come standard with the website:

  1. Easily list houses – as easy as filling in the blanks from your admin panel
  2. Automatically build your buyers list – every time buyers loook at your properties, they are presented with the opportunity to join your buyers list
  3. Upload unlimited pictures
  4. Upload documents – such as comps, a contract to make an offer from etc
  5. Include video virtual tours with your listing
  6. Google maps automatically populated in your listing
  7. Allow potential  buyers to share your properties on social networking websites like Twitter, Facebook, etc – tremendously increasing chances of a quick sale

And a lot more features. Check Web Sites For Flipping Houses for more information

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How to make money flipping houses

Monday, September 14th, 2009

One of the fastest ways to make money in real estate is through flipping houses, which is also referred to as wholesaling houses.

It is also the real estate investing model that probably requires the least amount of work and cash invested into each deal.

Flipping houses involves locating houses at below market prices, then “flipping” them to other real estate investors at a discount.

Most of these properties come from distressed home owners (motivated sellers), such as home owners facing foreclosure, going through divorce, job loss, job relocation, illness, or simply cannot afford to keep making mortgage payments.

Sometimes they just need to get rid of the house, but cannot afford to do the repairs needed, or simply don’t want to do it. They therefore accept to sell the houses at a discount for a quick and easy closing.

When you flip a house, the profit may not be very big (such as when you sell at retail), but you make your money fast, typically within two weeks.

The process goes something like this:

1) Real estate investor locates discounted property from a motivated seller and puts it under contract

2) He then takes this contract to the title company to get the title work done to ensure the property will be delivered free and clear

3) Another real estate investor (wholesale buyer)  acquires the house through one of two methods:

a) He takes over their contract for an assignment fee and closes on the property himself or

b) He buys the property from the investor in a double closing (simultaneous closing). In this case you buy the property and sell it to the wholesale buyer on the same closing table.

The wholesale buyer ends up doing most of the work (such as repair) and makes more money eventually after they fix and sell.

You as the real estate investor flipping the house have to leave more money on the table for the wholesale buyer.

Typically, you must locate properties for sale at 65% of market price minus repairs or less if you are to wholesale a deal successfully. Most wholesale buyers will express less interest when the profits go below this figure.

You must then quickly find wholesale buyers with cash in order to flip your property quickly.
Finding buyers often involves a combination of methods, both online and offline. The more methods you can employ, the more likely you are to find a cash buyer.

Offline methods include advertising the property to local real estate investors in local newspapers. I always make sure to give them my web site, rather than my phone number. Using a well designed landing page (squeeze page), they have to give me their name email and phone number before they can access my deals – building a very powerful buyers list.

The first thing I do is to email my deals to my buyers list, a list of active real estate investors I have accumulated both from local REI meetings and my website.

Each person inevitably ends up on my web site to view the full details of the property such as comps, live video vitual tours and pictures. In the process, they can email this deal to their friends exposing the deal to more potential buyers.

I use my real estate investor web site from  to build my buyers list and email my wholesale deals to real estate investors. My website also allows potential buyers to share my properties with their friends on Twitter, Facebook, MySpace and other social networking media, and quick posting to Craigslist for a quick sale with the least effort.

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