Wholesaling Houses for Beginners

Wholesaling Houses for Beginners


Hey, what’s goin’ on, guys? Tre’Leon Bey, here. Today’s topic, we’re talking about wholesaling
properties for beginners. As a beginner, there’s some really basic things
that you need to know about wholesaling, and really, it’s so basic that you don’t even
wanna overwhelm yourself with a lot of the other things. The three basic things you want to really
concern yourself with is finding a great real estate deal. If you’re going to wholesale properties, it’s
gonna have to be a property that either needs some work, or the seller is willing to get
rid of the property for a discounted price, so you want to be able to find a property
at a really, really great price that’s discounted. And you’ll want it to be about 70% of the
value that you would usually sell the house if it’s all fixed up. So, if you focus on finding a property that’s
at least 70% of the value then it would be — so that’s at least a 30% discount on the
property — then you’ve found a great deal. Once you find that great deal, what you want
to do is get it on contract, and that’s usually just a one-page contract that you need; keep
it real simple. You want a contract that’s really simple where
you can understand it and the seller can understand it; there’s no questions, so you don’t have
to use a state-approved contractor, things like that. You really can just use just a one page contract
that’s really self-explanatory. And, we have special contracts that we use
on our team, we really have a few different contingencies inside the contract to make
sure that you’re protected but really a basic contract: a contract can be on a piece of
paper, on a napkin, if you want, but you want to be able to get the property on contract
’cause that gives you control of the property even if you’re not going to go forward and
buy it. Because the third thing that you want to focus
on is you want to be able to find a cash buyer who’s willing to purchase that type of property
in that type of area. And so, you find other wholesale, rather you
find other real estate investors who have the cash, and those can be people who are
landlords or people who are fix-and-flippers, and they buy those type of homes in that area. You go and find people in that area, people
that are already buying homes in that area, and you present to them the house that you
now have control over through the contract, and you ask them if they would like to purchase
if from you. What happens is you’ll charge them a premium
on top of the amount that you already have the house on contract for, and you’ll be able
to take that as your fee, and so for example, if the house is worth … let’s say the house
is worth $100,000 when it’s all fixed up. You wanna be able to get that property on
contract to be able to purchase it for $70,000. And then, you wanna be able to charge a cash
buyer at least another $5,000 or more on top of that $70,000, alright? So, let’s say $75,000, you go and you present
that to a cash buyer, who’s either a landlord or a fix-and-flipper. You say, “Hey, I have a great house that’s
already in a neighborhood that you usually buy homes at, and I have this house at a discounted
price. I’ll give it to you for $75,000. It’s usually worth $100,000 once it’s already
fixed up,” alright? And, that’s just a real quick example; you
want the numbers to be as good as possible, so you want to be able to have the house to
be as discounted as possible, and then you also want to be able to have the repair value
as high as possible so that the cash buyer can actually flip it and actually make a great
profit on it, ’cause sometimes cash buyers have a minimum amount of what they want to
make. So, say if someone who’s a fix-and-flipper,
and they go through six months of putting a bunch of money into a home and fixing it
up, then a lot of times they want to make $25,000 or more, maybe even $40,000 is some
of their minimum requirements, and so they want a very discounted house, and so the more
discounted that you have, the quicker you’ll be able to get rid of the property, and it’s
really not hard to find cash buyers when you have an excellent deal. If it’s hard for you to find a cash buyer,
then your deal probably isn’t as excellent as you thought, because either the price isn’t
good enough, or the neighborhood just isn’t good enough for those cash buyers to be able
to consider your property a deal, alright? So, that’s really quickly wholesaling properties
for beginners. Just worry about those three basic things,
and you’re in business, alright? Peace.

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