Wholesaling real estate doesn’t have to be complicated. In fact, once you have the process down, it’s a relatively simple process that you can repeat over and over again, in as many markets as you choose.
Today our goal is to provide you with the steps for wholesaling real estate so you know exactly what steps are required to bring in your first or next profit check. This high-level overview is a great place to start so you can see where you’ll be going.
Let’s dig in…
Simple. To the Point. Highly Effective.
So here you go… a step-by-step, high-level overview of the steps required for you to close your first or next wholesale deal.
- Create and implement a marketing plan to locate motivated sellers. Stay committed to your plan to create a steady stream of leads coming in from which you can pick and choose the best deals.
- Build your investor buyers list. The power of this list is that you’ll sell deals quickly and often at over asking price! Remember – there is no such thing as a list that is too big!
- Pre-qualify your seller calls to identify the truly motivated sellers where there is room to negotiate. Build rapport with the seller and pull as much information from them as you can to determine if there is a deal to be made.
- Determine your Maximum Purchase Price (MPP) ballpark range. You cannot begin to negotiate until you know your MPP. Always start by applying the formula.
- Are you and the seller playing in the same ball field? Although you still have not seen the house, determine if the seller will work with your ballpark offer. No sense visiting the home if you are worlds apart in price.
- You (or have someone) visit the house, take pictures, analyze repairs, and compare the property to the comps you chose. The internet is a great tool to get an idea of how the house looks on the exterior, but someone needs to go and get current pictures of the exterior and all of the interior. You’ll also need these later to market the property.
- Revise your MPP based on this final data. Now that you have all of the information, zero in on the price you should pay to make this an enticing deal for your buyers.
- Negotiate with the Seller. Remember to reiterate all the benefits of working with you; remind them of their motivation, and the pain that it is causing them, then fix their problem with your offer.
- Get the contract signed and deliver earnest money. You and the seller can either sign in person, or use a digital signature service like DocuSign.
- Assign or Double Close: Determine if you plan to assign the contract to your buyers; or if it is necessary to use a double close (e.g. closing in IL; buying a bank-owned property; earning too large of an Assignment Fee). If a double close is desired, then begin the process of obtaining our no-fee transactional funding (click here to learn how to get access to $1,000,000 in funding for your deals). It’s actually a good idea to read through the process as soon as possible so you can clear some of the steps ahead of time.
- Prepare and distribute marketing to your buyers list. Provide all of the information your buyers will need to determine this is a great deal. Use the pictures you took of the house and of the comps. Like all marketing, repeat the message 5-7 times to achieve the greatest response rate.
- Accept offers and select the best one. It is not just about price. You also want to assess their ability to close – show me the money! And of course, they need to be able to close before your contract expires with the seller.
- Get the paperwork signed. Use a new Purchase & Sales Agreement with your buyer if you are doing a double close (you’ll be the seller); or an Assignment of Contract if assigning the contract.
- Collect the non-refundable earnest money. This is where the rubber meets the road and you discover if you have a real buyer or not. A real buyer will be happy to provide the earnest money deposit. Let your closing agent hold the funds in escrow – it will make everyone more comfortable.
- Obtain their Proof of Funds. They said they have access to money, this is where they actually Show You The Money. Get proof of 100% of the funds required. For instance, if they are getting a hard money loan for 90% of the purchase price, they need to prove they have the necessary 10% plus points, plus closing costs.
- Set up closing with the closing agent. Make sure that the closing gets scheduled well in advance and that all of the parties know the time and place.
- Follow-up to ensure everything is done on the buyer’s side for closing. Sure, your buyer should be a professional, but often they are not. Making sure everything is done will ensure a smooth closing and your payday!
- Close the deal. Unless it is a double closing, you are not even a part of the closing. With an assignment, the buyer steps into your shoes and fulfills your responsibilities with the seller.
- DEPOSIT YOUR PROFIT! The best part of the whole process – YOUR PAYDAY! You can get a check, but a wire transfer into your account is your safest and quickest option.
- Repeat – Repeat – Repeat. Now that you’ve completed this wholesale deal, keep it going to become a transaction engineer. This is the cash locomotive for your business.
And That’s Wholesaling Real Estate
There you have it.
You now have a bird’s eye view of the wholesaling process. Scroll back to the top of this page, put it to work for yourself and watch the profits keep rolling in.
And, if you’re looking for an all-in-one, intelligence-based investing system that’ll empower you to get more wholesale deals done, complete with access to nationwide motivated seller leads, cash buyer leads and the funding to put it all together… Look no further than the REI Trifecta. This system will allow you to eliminate competition, create consistent lead flow and get repeatable results in any market. You can learn more by joining this free training here.
Tell me, what step are you most looking forward to when it comes to wholesaling real estate? Which step do you need more help with? Let us know in the comments!
Lou Castillo | Mentor – Real Estate Wealth Network
A Message From Cam Dunlap, CEO and Founder of Real Estate Wealth Network: At Real Estate Wealth Network we do things differently. We’re a network of experienced real estate investing professionals with a passion for helping people succeed. I am proud to have fostered this community of amazing contributors who’ve become part of the REWN family.
This blog post was contributed by one of our master mentors with an abundance of investing experience. Lou started out just like you and so he knows how you feel, what challenges to expect and is a master at teaching others how to push past the obstacles that you may be currently facing.