If you are beginner wanting to garner knowledge or already in real estate expanding into becoming a real estate wholesaler, I am here to help point you in the right direction with a quick step by step guide into tackling wholesaling property.
The best part about wholesaling real estate is that you do not take ownership of that property. All you need on your end is to have the property under contract in your name, and from there the task is to assign the contract to another buyer who will close on the property in your place. This translates to a risk free venture and it can be achieved with little or no money down.
I am going to walk you through some easy ways on wholesaling real estate is.
1) Connect with Local Sellers
The key to a making a great deal is to pinpoint a motivated seller, and the wholesalerʼs task as a wholesaler is to advertise correctly by marketing your message in front of as many of those sellers as possible. There are many approaches to accomplishing this objective: direct mail, internet marketing, door knocking, bandit signs, or other creative marketing methods that are best suited to your time (and budget) constraints.
2) Locate Property & Start to Negotiate
Once your phone is ringing with calls from motivated sellers, a helpful tip is to make sure that you find a property with sufficient equity and now, you can proceed to filling out your sales contract with the homeowner as the seller and you as the buyer. Since you are the middle person, and a tip is to negotiate by setting your price low enough to leave room for your wholesale fee, to ensure that you can include enough profit to make the deal attractive to your end buyer.
3) Place the Property Under Contract
Upon agreement between the seller and you on the price and terms, you are now ready to write up a purchase and sale agreement that will need to be signed by both parties (you and the seller). Upon receiving in your hands an executed contract, you will want the next step is to send a copy to your title company right away, so they can begin title work. There are can be instances where, liens and/or judgments might pop up which can potentially halt the progress of your deal, so you want to check the title right away to make sure there are no last minute surprises.
4) Marketing Steps to Finding a Buyer
There are a few options in find an end buyer – phone/email all of the investors on your buyers list and inform them of your new deal; place ads on Craigslist; place written signs in the neighborhood of the property; consider attending local REIA meetings & pass out flyers about your property; contact other wholesalers in your market and ask them if they know of any potential buyers.
5) Assign Purchase Contract & Get Paid
At this point, you have successfully found an end buyer with a set purchase price in place, next you will need to assign your contract over to them by executing an assignment of contract agreement. Donʼt forget to collect a deposit from your buyer once the assignment agreement is executed and then email a copy of the agreement to your title company and schedule a settlement date.
Until next time..
Michael Del Prete