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How To Wholesale Real Estate Step by Step (IN 21 DAYS OR LESS)!

Real Estate Skills・35 minutes read

Wholesaling real estate involves getting properties under contract at a lower price and selling them to cash buyers at a higher price, with an average fee of $10,000. Key steps include finding distressed properties, securing deals below market value, and understanding cash buyers' preferences.

Insights

  • Wholesaling real estate involves securing properties below market value and selling the contracts to cash buyers for a profit, with assigning contracts being the simpler method.
  • Utilizing strategies like the day zero strategy, focusing on distressed properties, and building rapport with listing agents are essential for successful wholesaling, along with understanding cash buyers' criteria and tailoring deals to their preferences.

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Recent questions

  • What is wholesaling real estate?

    Buying low, selling high for profit.

  • How to start wholesaling real estate?

    Pick a market, find buyers, secure deals.

  • What is the day zero strategy?

    Finding distressed properties daily for wholesaling.

  • How to determine repair costs in wholesaling?

    Estimate based on property size and condition.

  • Why is understanding cash buyers' criteria important?

    Tailor deals to meet buyer preferences.

Related videos

Summary

00:00

"Wholesaling Real Estate: Profitable Deals Made Simple"

  • Wholesaling real estate involves getting a property under contract at one price and selling the contract to a cash buyer at a higher price, making a profit from the difference.
  • Two main ways to close a wholesale deal are through assigning the contract or double closing, with assigning being the simpler and preferred method.
  • The wholesaling process involves finding distressed properties and sellers in distress situations to secure deals below market value.
  • Once a deal is found, the property needs to be put under contract below market value to be sold to a cash buyer for a profit.
  • The average wholesale fee from deals is around $10,000, with some deals yielding more or less.
  • The 12-step process to start wholesaling real estate in 21 days includes picking a market, finding cash buyers, and filtering for deals.
  • Picking a market is recommended to be local for easier access to local resources and knowledge.
  • Finding three to five quality cash buyers in the market who are actively buying deals is crucial for successful wholesaling.
  • Utilizing the MLS to find and filter for distressed properties and sellers in distress situations is a key strategy for securing wholesale deals.
  • Strategies like the day zero strategy, focusing on new listings, and old listings can help in consistently finding and securing wholesale deals.

11:06

"Wholesaling Distressed Properties: The Day Zero Strategy"

  • MLS provides confidential information about properties, including seller's motivation and remarks.
  • Redfin and Zillow offer property descriptions, including seller's motivation, but not always.
  • Using the day zero strategy, finding 50 new properties daily, with 5-10 being distressed, is key.
  • The day zero strategy allows for wholesaling multiple houses monthly by focusing on distressed deals.
  • Speed is crucial in the day zero strategy to contact agents immediately when a distressed property is listed.
  • The old listing strategy targets properties active for 60-90 days, indicating potential issues and price reductions.
  • Contacting listing agents directly, not homeowners, is essential for wholesaling distressed properties.
  • Building rapport with agents, understanding property conditions, and solving problems can lead to successful deals.
  • Making discovery calls daily to real estate agents for distressed properties is vital for wholesaling.
  • Analyzing properties after talking to agents for ARV, repair costs, wholesale fee, and offer price is crucial for successful wholesaling.

21:59

"Maximize Profit by Understanding Cash Buyers"

  • ARV (After Repair Value) estimated at $300,000 based on comparable properties at $310,000, $290,000, and $300,000.
  • Repairs for a property with three bedrooms, two bathrooms, and 1,200 square feet, needing cosmetic renovations, estimated at $36,000 using $30 per square foot rule.
  • Repair estimates do not need to be perfect, aiming to be within $3,000 to $5,000 of actual costs, as only the general contractor knows the exact amount.
  • To refine repair estimates, send deals to cash buyers for feedback on repair costs and methods of estimation.
  • Wholesale fee recommendation of $10,000 or more to start negotiations from a reasonable amount.
  • Formula for determining maximum allowable offer: ARV x 70% - repairs - wholesale fee, with the option to adjust the 70% to 80% for a higher offer.
  • Importance of understanding cash buyers' criteria to tailor deals to their preferences and profit expectations.
  • Strategy of working with listing agents to have them write up contracts, aiming for them to represent the buyer to earn double commission.
  • If the listing agent does not represent the buyer, seek a referral from them or find an Investor-Friendly real estate agent to represent the buyer.
  • In states where listing agents cannot represent both sides, a listing broker can act as an intermediary or transactional broker to facilitate the deal.

33:22

"Connect with investors for quick wholesaling success"

  • To connect with real estate agents, search for Facebook groups in your area or attend Real Estate Investor Association Meetings by Googling the term along with your city's name.
  • Engage with potential investors by joining Facebook groups and expressing your interest in working with them, leading to warm leads and contacts.
  • When wholesaling a house or competing with other investors, aim for a quick closing timeframe, typically within 14 days, and always include an inspection contingency clause in your contracts.
  • Ensure that your inspection contingency allows you to back out of a deal if necessary, protecting yourself from unforeseen issues like tenant problems or property damage, and aim to wholesale the house before the contingency period ends.
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