Flipping Houses without Flipping out!
For many people just starting out in Real Estate Investing things can be pretty overwhelming. Building your buyer’s list, finding motivated sellers and then putting the two together to make a deal happen might sound like old school to the experienced wholesaler, but to a rookie flipper it sounds like a very scary situation.
Real Estate Investing is by far the quickest and simplest way to build wealth. Especially in today’s real estate market where property prices in most areas have hit rock bottom due to foreclosures, Short Sales and REO properties. It doesn’t take a GURU to see that this is the hottest Real state Investing Market in history. Many people are trying to jump on the Real Estate Train hoping to reap their share of the profits. Which is a very wise decision… but where do they start?
Here are a few tips to help you flip houses without flipping out…
1) Building your buyer’s list is the first thing that you will need to do. This is the foundation of wholesaling.
Ten tips to build your buyer’s list
2) Finding the properties to wholesale and then finding the ARV (Average Retail Value) to see if it’s a deal.
Where to find the best wholesale properties
Finding the Market Value of a property
Public auctions present opportunity for profitable investments
3) Negotiating with the seller. * This is the part where most people start flipping out. I suggest that you practice by doing a role play with a friend or family member using the sample phone script below to get you familiar with the process.
Sample Phone Script for cold calls on properties
Tips on negotiating with the seller
4.) Another tip (which I don’t have a link for) is to make sure the property is a deal before you put it under contract. Investors are looking for properties that are at least 30% below ARV after rehab. This means that after they buy the property (including your wholesale fee ) and spend money fixing it up they expect to make at least a 30% profit.
The above steps are the ones that make most new wholesalers nervous. Once you master these three everything else will fall into place. By practicing with a friend or family member you will overcome some of the “Fear of the unknown” that causes most people to quit before they start. You can practice making calls to buyers, making cold calls on properties and even negotiating with the sellers. Doing this could be the very thing that helps you conquer your fears and keeps you from flipping out.
Filed Under: assigning real estate • assignment contract • Assignments • investing in real estate • investment property • make money • make money in real estate • realestate investing • realestate wholesaling • wholesale real estate
Hi Carol,
Here’s what I’m running into. You have to take into consideration that this is Kansas and we’re a little behind the rest of the country from my experiences in anything here.
I met with an attorney to go over the contracts I got at DG.com wanting him to make it Kansas friendly so to speak. I explained to him that I want to assign some of my contracts to other investors. He had to chew on it for awhile but then saw no problem with it and then he wrote me up a long contract that I could see me using on something I want to buy and hold. I feel it’s a little to detailed for an assignment of contract.
So, after this I found a REI group to join (the only one in town) and my first Realtor who is an investor herself who also is the one that holds this meeting and understands assignments and double closings. She put together my whole team in a couple of emails. Long story short, she gives me mixed messages as far as acting like my Realtor. She never offered to put me on the mls emailer. She wouldn’t answer emails of me asking about comps on a property I wanted to pursue. Or any other questions pertaining to properties I was looking at but, she’ll get right back to me if I ask to bring another investor to her meeting. I took your advice and found a brand new agent. That didn’t work because her broker didn’t like what I wanted to do and I think she steered her away from me plus the poor girl would only make less than half her commission, the rest going to the broker until she is vested for so long. A 30K house would only produce maybe $400 (3% comission) for her plus a writers insurance she has to pay when writing up a contract so, I guess that wasn’t very attractive to her and understandably.
My problem besides not finding a Realtor to work with yet (I’m using listing agents now) is this. I’m like Bambi in the headlights (blink blink) when it comes to writing a contract up on say a FSBO. I want to be able to agree on a price, sit down at the kitchen table and write up a contract with the seller. So, I try another attorney that my first Realtor told me about that supposedly understands assignments and or double closings. I thought if he truly understood it he would perhaps be able to help me understand the contract better so I can write one up, also I thought he probably would already have a contract better suited for assignments that I could use as well or, maybe the seller and I could meet at his office to sign contracts until I get my feet wet enough to do them on my own. Well, he didn’t understand it like I thought he would and he felt like it was border line illegal. He was afraid I could get sued tying a house up that maybe in the end I couldn’t get assigned or bought. This is getting so discouraging.
I’m using a HELOC to purchase properties (I have a contract on one now that is a SS but waiting for the Bank to ok) but while my money is tied up on other properties I want to assign anything else I find until my HELOC is available again.
I don’t want to give up on the assignment of contract or working with FSBO’s but I’m just hitting dead ends on this. Do you have any thoughts or advise about this Carol? I would so appreciate anything you could throw my way.
Thank you.
Blessings,
Barbara
P.S. I enjoyed your website. Lots of good information. Well done….