Two steps to closing your first Wholesale Deal

I love watching David Blaine he takes it to the edge every time and 98% of the time manages to pull off his stunts and tricks successfully.

Pulling off a profitable wholesale real estate deal in less than thirty to forty five days is not always the easiest task, but it can be richly rewarding. The two main things you have to have to be able to do pull off is locating a motivated seller and a end buyer for the property your flipping. How you go about finding these two parties is just the beginning part to closing a wholesale deal successfully.

So how do you find property to wholesale?

One way is to create an ad. For example I have used the following, indicating that you Buy Houses, Settle Fast, Cash for Houses no matter what condition with a contact number or website attached. Whether you use actual bandit signs or the classified ads, you have to get your name and message out there. You will begin receiving responses from property owners in financial distress, own property that need repairs to name a few. Let’s use an example to clearly illustrate the process. You may come across a house that’s worth $200,000 dollars after it’s renovated. It needs $30,000 dollars in repairs, the homeowners still owe $60,000 dollars, and they need $8,000 dollars to relocate. In this situation you would negotiate a purchase contract for $68,000 and agree to pay off the mortgage balance. Now you control a property worth a lot more than the $68,000.

So now that you have the property under contract, how do you find a buyer? Again, local advertising is one way of building up some interest. Write up an advertisement that says, “handyman special,” or “Motivated Seller.” While pricing this deal, make sure that you leave enough profit in there for the rehabber or buy and hold investor who will resell the property or rent it out for a positive cash flow and equity. If, for example, you sell the property for $78,000 dollars, you can pocket $10,000 dollars in profit. The rehabber will then invest the $30,000 dollars in repairs, and have up to $92,000 dollars in profit potential or equity! Now everyone wins and makes money this will enable you to sell the property quickly! And believe me when you start wholesaling houses to investors and they end up making close to $100k on wholesale deals sold by your company word will spread very fast that you have the best deals in town and you’ll create customers for LIFE.

At the sametime finding a real end buyer using screening methods is essential. You will want to make sure that your investor buyers actually have the cash to purchase your properties. One way to do this is have them submit a Proof of Funds document. That way you will know that your potential buyer can settle with no issues. The last thing you want to happen is schedule closing and find out that your buyer doesn’t have the cash for the property. So stick to buyers that have cash or commitment from their private or hard-money lender. Otherwise you’re wasting your time trying to close deals where there is no money to fund the transaction.

In review locating a motivated seller and coming to an agreement on price and finding a qualified end buyer with funds you can close a wholesale real estate deal with no problem. Just make sure that you always leave enough “spread” for yourself to stay in business, and deliver profitable deals to your clients.

I”ll see you at the closing table,

Marcel Umphery the “R.E.I. Successmaker”