Retailing For Bigger Profits!
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The fastest way to make quick money in real estate is by
using the "Wholesale/Retail" Approach.
I talk about them together because they're so closely related. They're similar because the type of houses you're buying and the way you'll buy them are the same. Only when you sell do you see the difference. When you buy these houses you're looking for bargain basement prices. And I don't mean what "conventional" thinking people generally accept as a bargain, like 90-95% of value. No. You couldn't make the money you deserve. That's a fool's game, waiting only for the passage of time and inflation to build up the value of the house.
You buy or control the purchase of houses for 40 - 60 cents on the dollar. Houses you can even buy or control on a signature.
Believe me, there are literally thousands of them in every city and town. Shortly I'll tell you how to find them in your city.
Wholesaling
Let's talk about wholesale first, because it involves doing a deal you may not have thought about or just not sure how it works. Most people don't know how it works and the great income it can provide but it's the basis for our free enterprise system. It's just that most people haven't thought about it in terms of real estate.
Here you treat residential property as inventory that you're selling through a distribution network, to a jobber or store, to the customer. Or maybe even more like a car dealer. You buy the property at one price, you may or may not do a little fixing, and you sell it at a higher price for a profit.
Don't need loads of economic theories to do this business.
You are looking for another jobber, one who likes to do the retail work. Don't worry, this is where the majority of investor's spend their time. Although some do it more creatively and profitably then others!
Instead of selling to someone who's planning on moving in and living there, you simply sell to another investor (see PKP later). The investor does any necessary fix up work and then either holds and rents it or sells it (what is referred to as retailing) to a homeowner.
In wholesaling you actually function as a broker.The title of the property doesn't even ever have to pass through your name! You're a matchmaker, using your knowledge and your "resources" to help the two parties – a seller with a problem and a rehabber, fixer-upper/investor.
I say your resources, because you don't have to have any! Finding interested buyers for good deals is even easier than finding the properties! You just need to qualify or check on the investor to be sure they have the cash and can buy and close quickly. We have an easy solution to this problem. (More about this later. see PKP later).
An example is a member of our real estate investment club John bought and sold a house right near where he lived. The owner was anxious to sell, but John had no idea how anxious. On the phone he wanted $50,000, so John agreed to take a look. The house looked pretty good outside, but needed about $15,000 worth of rehab. John offered him $35,000 and the owner didn't even hesitate when he said yes. John set up a closing date a few weeks away and he got a contract to sell the house 2 days later to an investor for $45,000. That leftJohn with about $10,000 profit for about 8 hours of work."
Almost instantly John's becoming successful. He found out there were more sellers wanting him to solve their problems than there were hours in the day. He got pretty good at this approach pretty quickly. He became the "matchmaker," writing contracts on properties and "flipping" them before he ever closed on them. John got what was left over (the difference between what he agreed to pay and what his buyer/investor agreed to pay him.) usually $3,000 - $8,000 per deal!
It's incredible that people can make this much money, this fast, this easy! Everyday people are doing this on a regular basis.
(Click Here to Learn How to Flip Properties for Fast Cash!)
Retailing
Retailing is the business of buying a house at one price, fixing it up and selling it at a higher price. The difference between the sell price and your buy price, minus your expenses, is your profit.
Sounds Simple Right?
No.
At least many people don't get it right. Most people listen to greedy owners and conventional minded real estate agents, title company personnel, and attorneys. Believe me, once you learn the simple but factually business way to run your business, you'll have these people tell you again and again you can't do exactly what you're doing. Something as simple as buying a property appraising for $120,000 for $100,000 will get their envious attention. You're "supposed" to pay $120,000.
"Find 'em, fix 'em, flip 'em, forget 'em!"
The philosophy on retailing is simple: find 'em, fix 'em, flip 'em, forget 'em! Buy one of these ultra low-priced "distress sale" houses (and you'll soon see they're all around you), make it pretty and livable, then waste no time selling it retail and pick up a quick $25,000 - $50,000.
Don't panic about the fixing-up part! Most people finding these deals don't want to be bothered or don't have the money or experience for rehabbing. In fact, it's a waste, or at least a misuse of your valuable time. You shouldn't be putzing around on one deal trying to rehab the house which could take three to six months when you can better use your time finding another high profit deal.
"Yeah but doesn't the rehabber make a lot more money than me?"
Yes but remember…. You are making a fast $3,000 to $10,000 on your flip to an investor in DAYS! Now you can go out and get another and another and another. No money tied up and No valuable time tied up trying to get a three to six month job done to make more money.
The rehabber comes up with all the money, takes all the risks and will be tied up for months on your deal. But they work on volume. Yes, you make could make $25,000 on the deal but if it takes you 3 to 6 months to rehab and sell it, what does that come out to? An average of $4,000 to $5,000 per month. You can do that by wholesaling, without the headaches of finding the money, credit, contractors, and other annoying and risky things that go with rehabbing houses.
There are investors/rehabbers who enjoy and make it their business to gut the rooms, sheet rock the walls and ceilings, change the dirty plumbing, replace broken glass, repair the roof and siding and everything else that goes into a rehab project. Don't get me wrong, they too make a good profit for their efforts (see PKP).
You need the investor to buy your deals and the investor needs you to bring them deals. You both serve an important role in a mutually rewarding business relationship. A true win-win money making situation!
The Secrets of Buying the Wholesale/Retail House
Remember, I said the type of house you want to buy for either of these methods is the same. Basically, you're looking for the super-discounted, must-sell bargain. The seller must be highly motivated to sell, for whatever reason (there are as many reasons as there are sellers!). The reason they must sell doesn't matter. What does matter is your ability and willingness to solve their problems with a win-win solution.
The Key:When you solve people's problems, you get paid handsomely!
You know…. Doctor's, Lawyers, Psychologists, Tax Accountants, and anyone else who will help you solve your problems get paid handsomely. Including selling a house!
The seller wins by getting out from under a house they can't afford to keep, you win by getting a sellable commodity at a price low enough to let you make a very healthy profit with very little effort.
Will every seller just lay down and take any offer you present? Of course not! The point is you've got to control the direction of the entire deal from the very start, if you want to control the money you will be receiving. Notice, I said, will be receiving. There won't be any guesswork in how much profit you're going to make. You'll know it before you make your offer! (see PPK)
And, to make doubly certain of you profit, you simply call your investor with any questions. When you first get started you're bound to have plenty of questions, concerns, and just plain motivational issues. Your investor should help and guide you through them all!
The truth is, most people don't really know what the owner is willing to sell for, until you make the offer. Most buyers make offers based on the seller's price. No, No, No!
If you're going to make a genuine offer to purchase, you must be able to calculate your real costs, include your profit, and make your offer according to those numbers. Unless you do, you could easily pay thousands of dollars more than necessary.
The point is this…. You'll waste time and money by trying to figure what might be acceptable to the seller. Your job is to decide what you will offer (based on what you want from the deal) and then make that offer. And the real secret of making money in this business is to do that dozens of times a week. The number of deals you close will be a direct result of the number of offers you make.
(Click Here to Learn how to Buyit, Fix it, Flip it by a Seasoned Investor!)
How simple can it get?
These deals are just not that hard to find – or to do. Whenever I run ads, our phones ring for days with callers wanting to sell their home and people wanting to buy a home. You can find these deals just about everywhere. Then you screen the callers for the one's who are really motivated to sell. These are your best leads.
Where To Find The Great Wholesale/Retail Deals And Keep Them Coming!
There are dozens of sources in your area waiting for you or anybody with the knowledge and skills to solve their problem. And they're more than willing to let you make money doing it! Here are some sources you can find in your own hometown that will kick in the afterburners on your flight to financial success in real estate:
Realtors and Real Estate Professionals
If the whole idea of dealing with a seller face-to-face or even on the phone just sends cold chills down your spine, you can always make your offers though a professional real estate agent or broker. For that matter, you can structure your deals so that all contact with the seller and with the buyer occurs through an agent. What? Use a real estate agent and still make money? Yes.
Why do the things you don't want to do? That makes it too much like a Job. Do the things you enjoy, and learn to let others do the parts that you don't enjoy, or the parts that are too time-consuming.
Realtors can help you in ways that you'd never think of. The incredible legwork and computer research and negotiating and digging these folks can do can save you tons of hours of work.
Some of the Advantages of Using Agents That Most Investors Miss Out On
Having the agent do all the legwork.
Never having to deal with a seller directly.
Gaining access into the extensive MLS Service.
Your time is freed up to do other things. After all, what is the point of being an entrepreneur anyway? Your time is your most valuable commodity. You should constantly be asking yourself, is this the best use of my time?
Once you show them how to pick out the pearls, they bring you all the prospective properties you can handle!(see PKP)
Finding The Great Deals & Getting Them To Come To You.
There are other sources of deals, but I learned early on it was much better getting the deals to come to me when ever possible. I'm referring to creative marketing techniques that do the work for you.
In my opinion, this is one of the most vital and overlooked parts of most businesses, including real estate. The on-going flow of the business is generated right here. For example, remember classified ads? Well, reading ads and calling these sellers is just one great way to find properties. They're looking for a dealmaker. Someone like you!
So, what if you could have them so interested, that they'd call YOU up instead of the other way around? Well, why not? I mean, would you rather spend a couple of hours calling sellers cold from ads you read in the paper, or take calls from people who already have decided that they want to sell to you?
So, let's just say that, in addition to reading the classifieds and calling a few sellers, we also run some small ads with our own trigger words. Some terms like: "I buy houses", and "fast closings"; or, maybe, "cash for your house", or, "save your credit"; "any condition/any price" is a good one, too.
Don't just stop at ads, although these alone are enough to get your phone ringing off the hook and a buyer/seller list filled up real quick. You can use several other methods like...
Flyers- The ads they never throw away.
These are along the same lines as your ads, but with a little more detail. They don't have to be extremely fancy, just have your local quick-printer help you out. Then hire some kids to put them out in neighborhoods. You know, 200 or 300 a week or so. You'll be amazed by the results. I have had sellers call me up from flyers two and three months old. It's simple and it's cheap.
Business cards mean business in your pocket, every day.
Why not tell what you do on your cards? Use the front and the back. Again, use the same ideas as in the classified ads you'll be running. Pass them out to everyone. When you talk to real estate agents, give them several. Pin them to bulletin boards. The more you get out there the more you have opportunities knocking on your door.
Letters to tell your story.
When I see an overgrown house or a vacant house, or find out that someone out-of-town is involved in a piece of property (renting or selling), I like to send them a letter. It's a simple form letter, but in it I let them know that I'm a Real Estate Investor and that I buy houses and if they are interested in or considering selling the property, please contact me. I include some of the key phrases we've already discussed, like "quick closings", "cash for your house", etc.
These are just a few of the excellent resources and techniques to get great deals and build up an inventory of houses to turn for instant cash income. Naturally, the more of these methods you use, the more houses you'll find. There's just not the space in this single report to cover all of these in detail.
Write Offers Daily!
Discouraged Newbie investors make one or possibly two mistakes common to new investors. They aren't targeting motivated sellers and/or they aren't making enough offers.
Targeting Motivated Sellers
Where I live, most homes sell for their full asking price and above as well. The only difference between me and Discouraged Newbie is that I concentrate on the areas and sellers who are motivated to sell at something less than full price. Typically, these are banks or individuals who have a VACANT property which needs work. I stress the word "vacant" for two reasons:
1) vacant properties are nothing but trouble for the owners and
2) 90% of the properties I have bought have been vacant.
Handling Rejection
Even though I focus on motivated sellers, most of them aren't motivated enough to accept my offer. If I make 15 offers, with 12-13 of them, chances are that the seller is going to say "No," or someone else is going to offer more. I strike out much more often than having a seller say, "Yes," to my offer. But I'm not concerned about all of the, "No's." I accept them as part of the process and forge ahead, knowing that if I make enough offers someone is eventually going to say "Yes," particularly if my offers are targeted toward sellers who have some degree of motivation.
Making Lots of Offers to Keep Your Funnel Full
In this business you cannot make money without inventory. It is extremely important that you always keep your pipeline full, and the way to do that is to constantly make offers. Many people come and tell me that they look at homes all the time but never buy anything. They say they find motivated sellers but none of their deals ever goes through. My next question to them is, "How many times have you put an offer on paper?" They are usually able to count their answer on one hand.
In order to buy properties, you must make offers. Sounds simple, right? Yet it's surprising how many new investors have trouble overcoming this hurdle. Successful investors average 15-20 offers per month, sometimes many more. You would rarely, if ever, buy anything if you only make one or two offers a month.
Successful investors look at 10 homes and make 10 offers, not just 2. Some make offers even on the homes they couldn't get out to see. If they are targeting the right properties (i.e., those with sellers who may be motivated), odds are that there will be several sellers out of 10 with enough motivation to seriously consider their offer.
Remember...When you make an offer, your investment is $0. You have nothing to lose. If you make10 to 20 offers per month, and only got one deal per month, I bet it could be close to or even more than your current monthly income. If it's close, heck... you've just doubled your income! If it's more and with a little more effort... you might have just found a new career!
I hope that this will inspire some of you to get out there and start making more offers. If you make it your goal to make an offer a day, then you will start to buy properties (or get them under contract to flip to your investor). If your offers are at the right price, then you can wholesale your deals and make money.
You don't need to make offers as some of the more experienced investors do, but you do have to make some if you want to buy houses. Do your homework, get your questions answered, and overcome your fears. Then make it your goal to average an offer a day because, as we all know, "An offer a day keeps the bill collectors away!"
Want to become a "player" in this business?
I will show you how to do all the above things plus....
Share A Whole Lot More of my Secrets!
Including Examples of My Letters, Forms, Worksheets, Estimate Guides, Inspection Sheets, Contracts, etc.
(Click Here)
Okay, What and Who Is PKP?
PKP is for the company that is going to make your wholesaling business an easy task. The biggest problem beginners have is...
Who Are They Going To Sell Their Deal To Quickly and Safely?
Who will give them guidance, answers and confidence in their offer proccess?
Who will be able to close quickly and for all cash like they told the sellers?
Who will give them a check list of what to look for when visiting a property?
Who will give them a quick method of figuring any fix up costs?
Who will give them a quick answer about the interest in their deal?
The answer to these questions and your new found INVESTOR is...
PEAK PROPERTIES, LLC
We can be your investor!
Wholesale or flip your deals to us!
How? What about the Money? Don't Worry it's Simple!
Simply add the following verbage to your offer: "and or assigns"
BUYER: Your name + and or assigns.
Thats it! This simply gives you the right to assign the contract to anyone you choose!
Example: Buyer: Bill Smith and or assigns.
When your ready, call us and we will give you the following:
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Our criteria sheet for wholesale and rehab deals.
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A simple check list for the basic fix up costs.
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A simple13 point disaster check list of items to be aware of.
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Wholesale / Referral Lead Form.
Pre-Foreclosure Deal Hotline
That's All Fokes!
Come join the GSREIA as our meetings will help show you all the information needed for you to go out and earn thousands of dollars a month in finding foreclosures plus how to wholesale houses to us and other investors.
Peak Properties, LLC.
Check out what members and guests are saying about the meetings!
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