Ok guys, I’ve been reading up for awhile now and really want to jump in. I want to verify my steps for a wholesale deal here before I start signing contracts, etc…
Here’s what I’ve already accomplished:
Kind of have a mentor/partner to assist me with questions on deals.
- Have setup website (still needs work)
- Have setup toll free number for leads off bandit signs, etc…
- Have a small buyers list, BUT I think in my area newspaper ads work really well…
- Have most of my contracts situated (have p&s, have assignment, working out addendum).
- Need to get a lock box from home depot
- Have been driving around and already found properties.
- Have done a few practice calls.
- Have a title company that another investor recommended.
Steps to take during a deal:
- Find deal or deal finds me.
- Negotiate w/seller on price and close in 30 days.
- Talk about repairs needed and visit property for further inspection.
- Get seller to sign p&s and addendum agreement, get key, and give seller $20 earnest money.
- File affidavid with the county (Do most people do this)??
- Send contracts (p&s and addendum that were already signed) to title company to begin title work.
- Put lock box w/key on property.
- Call buyers list and/or advertise. Give buyers lock box code when they call to inspect property.
- If they like property, get $1000 minimum earnest money from them and do assignment contract.
- Verify buyers funds (hard money, cash, etc…)
- Send all documents to title company.
- Determine whether to use assignment of contract or double-close.
- Setup closing date.
- Get both parties to do closing together or around the same day.
- Either get check or if for some reason I can’t find buyers, contract becomes null and deal is off after the close date on the contract.
I know this is high level. Is this about right? Did I miss any important steps here?
More or less right. you are complicating it more than you should. You just get a contract on a house after you negotiate with a seller, find an investor to assign it to. Everything else changes depending on the deal.
I’m new to this forum but I just thought I’d throw my two cents in. At 24 years old I have created a real estate business that only does
wholesaling, It brings in on average $20,000 a month with the
average deal making $5000-$18,000 per deal so I have a few suggestions if your interested:
1.USE THE INTERNET- I made over $25,000 this year alone from
FREE classified ads posted on the internet. This ads are linked
to a website and I receive leads via a form.
- Don’t always do what the GURUS tell you.
- I listened to one course
here on rei club where the speaker says to you should only work
on your business 10 hours a week. Trust me to make over $200,000
a year it takes more than 10 hours a week in the wholesale business.
-Don’t delay on getting back to your leads. One guru says to
wait till the end of week and then go through your leads
and call back the best ones. DON’T do this! Chances are
most investors in your area have a 2-5 day delay in getting
back to prospective sellers. If you can get back to them within
hours of their request. Chances are you will get the deal.
Thats how I beat 95% of the guys in my area. SPEED! And then
I sell the deal back to these investors who missed out
for a cool 5-15K. Time is money
3.Build your buyers list
- Find cash buyers - Don’t waste time with people who need to
go to bank. You need a decision within hours of signing the
purchase contract. I don’t own a lock box because I don’t need
one. I take pictures, I run comparable sales and I have a feature sheet my buyer makes his decisions based on that. He does’nt even look
at the place if its a good deal. Find serious investors and build up
trust, you won’t even need to get them in house if they trust you
that it’s a good deal.
- Avoid 30 day closings if possible. Some sellers absolutely
need 30 day closings but if you can try to 60-90 days, I am
in a rapidly appreciating market so it could be different for
your area.which I find to be prefered my buyers. If the seller is desperate for cash then offer then a deposit in the mean time.
Remember the name of the game is SPEED. Get in, get out and go
home. Try to get cash as soon as you assign the deal so you don’t have to collections at closing.