Wholesaling Houses 101 By Robert Woodruff

Transcription

1 Wholesaling Houses 101 By Robert Woodruff In this material you will find a compilation of tips and tricks for wholeslaing real estate for pennies-on-thedollar. Learn tips and secrets on how to quickly market your business, identify motivated sellers, & contract other people s properties with little to no money.

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3 Disclaimer This publication is intended to deliver accurate and authoritative information regarding the subject matter covered. The information contained in this home study system is up-to-date as of the date of its publication. By accepting this material, you acknowledge that the publisher is not engaged in offering or providing legal, accounting or other professional services. Students should feel free to consult legal, accounting, and other professional advisors. Furthermore, this is neither the sale nor an offer to sell securities, the sale of which is regulated by various state and federal laws and regulations. Any sale of securities must be conducted by registration or under an exemption from registration. Reproduction or translation of this work or any part of this work, without the express permission of the copyright owner, is prohibited. Copyright Notice Copyright 2016, Robert Woodruff. All rights reserved. These materials are delivered under a limited license to the original licensee who is authorized to use all materials contained herein for personal use only. These are copyrighted consulting materials and are not intended to offer legal, accounting, or other professional advice. The licensee is responsible for the use of these materials. Any unauthorized transfer, duplication, copying, sale, or other use of these materials other than by the original licensee is prohibited. Published by and copyright; Robert Woodruff. Robert Woodruff PO BOX 8246 Fleming Island, FL 32006

4 Foreword: Worry about tackling a deal after you find it. Not before. Doing this is called being a thinker and thinkers don t accomplish anything! They re too busy thinking about it! They never get anything done because they have to know everything about what they re about to do before ever attempting to do it!!! Their perceived lack of knowledge results in inactivity. Being a thinker can be a good thing for some people but for most, it s a tall hurdle for beginners to get over. Be a Doer! It s easier to ask for forgiveness than permission. The best beginners usually find the courage to become real estate investors by getting into a bind. Often, it s only when people get stuck between a rock and a hard place do you see them come out swinging and actually DO something to change their lives. Once they ve decided to DO it, they emit the courage to achieve something better than a 9-5!!! Your 9-5 job is a merely a Crutch enabling you to NOT succeed. Let s face it, employers will only pay enough to keep you, not what you are truly worth. Don t worry about making mistakes as mistakes are simply opportunities to learn. You ll never know anything if you re too afraid of making mistakes. Often, the mistakes you learn the most from will cost you money. Think of it as paying for your education. Learning from others mistakes is cheaper than learning them yourself. There s no better investment than investing in your own education. The only thing that typically changes in people throughout the years of their lives is what they know. Buy quality educational materials from NAREIA. Steer clear of flashy gurus with FAST/LAZY MONEY investing strategies. If it seems too good to be true, it probably is. There are no problems, only solutions. Often, the greatest gifts of personal growth come in the form of tragedy. Effectively dealing with tragedies tends to reveal gifts like knowledge, experience, freedom, power, maturity, and even money. It s ALL ABOUT the NUMBERS Marketing and advertising to find great real estate deals is simply a matter of numbers. The more you market, the more deals you will find. The odds are, you may have to sift through a few bad apples before you find a few good ones. Finding great deals is simply a numbers game. Persistence and having faith in your own intentions, work, and marketing are the keys to making it happen.

5 Wholesaling Houses 101 The Motivated Seller To be an effective and profitable wholesaler, you must first learn how to market for motivated sellers. What is a motivated seller? Identifying Motivated Sellers What is a motivated seller? Here is a list of attributes associated with the home of a motivated seller. These are common problems that can happen to anyone: Characteristics & Attributes of the of the Motivated Seller - Home sitting vacant - Repairs needed - Back taxes owed - Payments late - Lot rents in arrears - Bad tenants/frustrated landlord - Divorce - Relocation/job transfer - Foreclosure/bankruptcy - They may be making two payments - They may be over-leveraged Bad things happen to good people Motivated sellers are people, banks, investors, or lenders who need to sell now. They are often motivated by emotions. Motivated sellers usually always have a problem and

6 that s why they need to sell fast! All you have to do is figure out what that problem is Why are they motivated to sell? Have they tried to sell and now have given up? Did the house need more repairs than they could afford? Did they lose their jobs and are now behind on their payments? All of these problems can be fixed. The descriptive language of a motivated seller will be As Is, Seller Financing, Must Sell, OBO and Or Best Offer, For Sale by Owner, Motivated Seller, Good Value, Clean, Quiet, New paint, Needs Work, ect. Also check the Rent to own section for landlords that are wanting out of renting their properties. Landlords don t receive enough money down to typically pay for regular tenant abuse to their property. So what happens? They end up with a home that they cannot rent because it needs a lot of work and they don t know how, nor do they have the money to fix it. So they give up their problem and give it to you. With a fresh set of eyes, and equipped with the correct strategy to do it right, you can make big profits fixing other peoples problems.

7 Marketing to Motivated Sellers 101. We will now cover several free and affordable strategies for marketing to motivated sellers. Craig s List Craig s List is a great site to find local deals. Everything from motivated sellers to discontented landlords and more is on Craig s list. It is a great free marketing medium which can provide many leads from different parts of the website. Graphic Ads An advanced way to advertise on craigslist is to use a graphic ad. Graphic ads can be used just about anywhere on the internet. Using graphic ads on craigslist is a really great way to stand-out from the competition. Real Estate Investors place all kinds of graphic ads on craigslist. Real estate investors have graphic ads that cater to motivated sellers, buyers, private money lenders, and more. Tips for buying on Craigslist The most important thing to remember when looking for things on Craigslist is that you must be both patient and impulsive. This may seem like a paradox, but it s true. First, you must know what it is you want. And then you must be patient and have faith while waiting for the next deal to be listed. When you finally see the deal available, send an immediately or you may lose your chance. (An expressing interest is not a commitment to buy, but it puts you at the head of the line in most sellers minds.) Be ready to purchase the home when you meet the seller. If you drive to look at a home, be ready to contract it immediately.. Sellers generally want to get rid of their homes now. We ve been able to buy homes even when we

8 weren t the first to arrive with cash, but were the first to arrive with cash and the paperwork. When sellers are hot, they are hot!!! If you don t respond to a good deal fast, someone else will. Act quickly or you will lose great deals! People sell unwanted properties, generally for about 50-90% of their appraised value. Negotiate. Offer the seller less than the asking price, especially if the listing is old. (This won t work for a brand-new listing.) The longer the listing, the more motivated the seller will be to sell their home. If your offer is not embarrassing, you offered too much. Use cash and exact change when possible. Some sellers will take a check or give you change, but don t count on it. Arrange the form of payment before you meet the seller. You can do this by using a motivated seller sheet. The motivated seller sheet establishes whether your seller will take all cash and a quick closing or whether they d be happy for you to provide a moving truck. (Some sellers will give you their home for free or even pay you to take it.) Discontented Landlords are found in the For Rent section of Craig s list. It s easy to identify landlords on Craig s list that are tired of managing or investing in rental property. Just look at the picture of the property that they are posting for rent. If the picture shows that they need landscaping, a new paint job, or material defects on the exterior of the property, they most likely are a motivated seller. Many parents of Children buy their children small homes for college and get stuck with the property when their child moves away. These are great deals. Tips for selling Wholesale Properties on Craigslist Offer detailed descriptions. Provide essential information. Give the square footage, beds and baths, the style, year built, or any other relevant information a buyer might need to make a decision. Be honest. You re not going to fool anyone. If you say something is like new and a potential buyer shows up to discover it s well-worn, you re not going to make the sale and you re going to have a cranky wholesale buyer on your hands. Tell them the truth.

9 You don t need to post a photograph, but you re going be more successful if you do. Searching for the perfect deal on Craigslist, you will find that there is a strange disconnect between the text people used to describe their homes and the actual home as shown in a picture. Make sure to add a picture to your ad. Never Post more than 3 pictures: If you post 10 pictures of your property online, online viewers won t drive out to see your property. Getting them to drive to see your property in person is a great way to steer their intentions to buy it. Getting them to the property is half the battle. Don t show all of your cards, leave some mystery to get your wholesale buyer to view the property in person if possible. Only send more than 3 pictures to out-of-state wholesale buyers. Ask a reasonable price. If you re not sure what s reasonable, watch Craigslist for a week or two to see what similar properties fetch. If you price your property too low you ll sell it but you will have left money on the table. If you price your property too high you ll never get a response. You will get many responses, but few will follow through. That s just how Craigslist works. Don t let it bother you. Be grateful for the few that do follow through. You must have patience. Marketing is a numbers game. You must have faith in your marketing. Have faith that the marketing activity you give forth, will bear fruit. As sure as it will rain outside, you WILL sell your property. You may not have a weather man telling you when to expect it to sell, but be assured and have faith and it will.

10 Marketing Strategy #2 Newspapers Newspapers classified sections are always great ways to find good deals. Look for descriptive language in the classifieds section of your local newspaper for that reads motivated seller. The descriptive language of a motivated seller will be As Is, Seller Financing, Must Sell, OBO and Or Best Offer, Motivated Seller, Good Value, Clean, Quiet, New paint, Needs Work, ect. Also check the Rent to own section for landlords that are wanting out of renting their properties. Landlords don t receive enough money down to typically pay for regular tenant abuse to their property.

11 So what happens? They end up with a home that they cannot rent because it needs a lot of work and they don t know how, nor do they have the money to fix it. So they give up their problem and give it to you. With a fresh set of eyes, and equipped with the correct strategy to do it right, you can make good money off of other peoples problems. Real estate investors dream of finding motivated sellers. Finding deals through locating motivated sellers provide the potential to make a substantial profit and these types of sales typically close faster than traditional real estate transactions. The faster you can close on each deal means the more money you can potentially earn throughout a year. The Speed of Particle-Flow Determines Profit Finding these motivated sellers is part of creative real estate investing, and then connecting with them. How you reach these sellers depends on your skills and resourcefulness, but among the dozens of options available using a well-written, strategically placed newspaper ad is considered one of the better options. Utilizing a newspaper ad is a tried and true method to find motivated real estate sellers not just in your market but any area you might chose. The trick is figuring out the format and wording to use, the rest is just details. Much like a direct mail letter or postcard the type of ad you run depends on the type of motivated seller that you are trying to find. If you want to run a print ad in a big city paper then be prepared to shell out some big bucks. Running a classified ad in the same paper may cost less than $100 per month. One thing we have learned is the big city papers aren't always the best route to take. The smaller papers seem to give us the most bang for our buck. If you are just getting started than we suggest running a classified advertisement and see what kind of response you get. Many times one classified ad is all you need to attract a sizeable amount of motivated sellers. Just make sure that you test, test, test your ad. Your main goal as a real estate investor with any advertisement is to get the phone to ring. Having a good understanding of the real estate market will help you plan your next move. Once you know the type of real estate market you are dealing with you can begin to advertise accordingly. One important consideration is the day of the week you run your advertisement. Weekends have historically shown to have a higher readership. Running your ad in the Saturday and Sunday

12 editions will cost more than during the week, but it is your best chance to get your ad in front of a lot of prospects. Don't completely rule out the daily papers. They are still a good source for finding motivated sellers. If you can afford it try out both weekend and daily editions to find out which works best for you. Consistency is the key when running newspaper ads. Don't run an advertisement for only thirty days. Unless you are willing to run the ad month after month then don't bother getting start in the first place. You are just wasting your money. Remember you are playing a numbers game doing this kind of real estate investing. Running any ad for one month isn't likely to attract any sellers. It's a psychological thing in that people have to see the ad over and over for months before they trust it enough to pick up the phone and go online and fill out a contact form. Running more than one ad in the same paper at the same time can be highly effective. The more exposure your ads have, the more likely that you will get the desired response. If you can afford it place multiple ads in the daily and weekend editions to gain maximum exposure. Keep in mind that some readers may not be in the market today, but they may be next week, next month, or even next year. The more people that know that you are looking for property the more likely you are to find motivated sellers. When designing your ad always to remember to include your website address AND phone number. If you can swing it consider running multiple ads and have them list different contact numbers and website addresses. An 800 number costs about $25 monthly and you can use a single web page for the website address. This way you can effectively track which ad or ads are getting the most response. Newspaper advertisements can be a great way to find sellers if you understand how to do it correctly. It may take a little bit of trial and error, but soon you will begin to notice patterns. Certain headlines and wording will get you more phone calls then others so pay attention to what works and what doesn t. Always test and track your marketing, so you can continue using what works, and ditch the ones that don t. Another Great way to find motivated sellers through your local newspaper is to use the Services Section. The services section of your newspaper is normally used by service providers in your area; Roofers, Mechanics, Gardeners, ect. It costs $50 to $150 per month to run an ad in the services section. Look at it this way, you are providing a service to motivated

13 sellers. When they search the classifieds to find a roofer to put a new roof on their house, they may just decide to sell you their house instead of spending the necessary money to fix it. Yet Another Great Way to Market for Motivated Sellers with Newspaper Companies is to place your motivated seller ads on the newspapers website. This can be a free form of marketing that is very effective. Many paper newspapers are turning more to their online websites to deliver the news. Large and small publications should be identified in the communities in which you are trying to locate deals. Posting to these websites is often free or little cost to you.

14 What do I do when they call? ANSWER THE PHONE!!! Do not use numbers to simply filter your calls from your ads. You are your single best salesperson and should be ready to pickup the phone and deal with a motivated seller accordingly. Routing your calls to a number with a computer-generated message is far less effective than picking up the phone when it rings. People don t like to talk to an answering machine service, they like to talk to people. Use a Motivated Seller Sheet!!! Knowing what to ask a seller to find out if they are motivated is a key to success when investing. By asking the right questions, you get to decide whether the property is a profitable deal, or a colossal waste of time. Motivated seller sheets remind you each and every time of what questions to ask. For new investors, a motivated seller sheet should be used while answering every-single call that you receive from sellers. No More Wasted Windshield Time Spinning Your Wheels is a huge benefit of using a motivated seller sheet. Your own time is your most valuable asset. This motivated seller sheet will keep you from wasting your time driving to properties you have no business seeing.

15 The Motivated Seller Sheet comes in Three Sections- 1. The Sellers Information You need to know all about the seller. Do they work third shift and sleep all day? Is that why they aren t answering your morning phone calls? You need to know everything about the seller. 2. Property Characteristics This section gives you everything you need to know about the property without actually getting into your car and physically driving to view it yourself. 3. The Sellers Motivation This section allows you to figure out whether your seller is actually motivated or not. If they are truly a motivated seller, you will find out in this third section. If they are truly motivated, the best thing to do next is create hypothetical scenario s with them to fix their problem. Once you have agreed on how to solve their problem, set an appointment to quickly view the property and make an offer. 4. REMEMBER: If you do not contract the property, someone else will. Be ready to do paperwork upon arriving if everything checks out.

16 MOTIVATED SELLER SHEET Date: Day: Monday Tuesday Wednesday Thursday Friday Saturday Sunday Time: : Sellers Information: What is your name? Are you the owner? YES or NO If not, why am I speaking with you? What s your telephone number: Other Phone What is the address? City State Zip How did you hear about us? Note Sign Newspaper Internet Referral Other: Property Characteristics: One Story or Two Bedrooms: Baths: 1 2 Living Rooms: 1 2 Square Ft: Central Heat and Air? YES / NO Soft Spots in the flooring? YES / NO Bathroom Floors: GOOD or BAD Roof: Metal or SHINGLED Siding: Wood / Brick / VINYL Plumbing/Electric: GOOD or BAD Outbuilding /Storage Shed? YES / NO Garage/Carport: YES / NO Tell me about the current condition of the home (do not interrupt them): What do you like best/least about the property? Sellers Motivation: Why are you selling the home? How long have they been trying to sell the home? When do you need to move? How much are you asking for the home? How did you decide on that price? What s the least you would take for the home if I brought you a check for it today? How much do you owe on the home? Are you behind on any payments? How many? What is the monthly payment? Are taxes and insurance included? Y / N How much are they? When will you be available to show me the property? (If their price is too high say this..) Unfortunately, I won t be able to offer you anything near your asking price. Would you still like me to come see your property and make you an offer? If so, when would be a good time?

17 What is Due Diligence? Due Diligence is the research that you need to perform to ensure the information you received on the motivated seller sheet is true and accurate. Every investor has to perform their own due diligence on each and every property they intend to contract and or purchase. Due diligence includes: Does this person REALLY own this property? Or does someone else? Do they own the property free and clear? Do they owe back taxes or other local city fees? How far behind are they on their payments? Check with bank. Are they paying for costly insurance? Is there more than one owner of this property? What is the true value of the property? How much are the true budgeted fix-up costs? Each of these questions directly relate to your ability to protect yourself as a real estate wholesaler. Performing your due diligence will eliminate most of your risk factors concerning each deal. You will never eliminate risk 100% but by performing detailed due diligence on every property, you will take away most doubts allowing you to make a good educated decision as to whether it s a deal or not. Note to All Investors: Never trust the information that a seller gives you. Always verify everything. Sellers will often think that if you can t find the problem then the problem does not exist for the seller. They are correct is this assumption because once you contract the property, the problem is now yours.

18 Marketing Strategy #3 Become a Member of the North American REIA Most communities have a local Real Estate Investors Association. Real Estate Investing Associations or REIA s have local meetings for Real Estate Investors all across the country. The North American REIA and its chapters are the best place for networking with like-minded real estate professionals. The association is often filled with professionals who are often subject to many more rules and regulations than real estate investors. As a real-estate investor, you are not subject to many of the laws and regulations many other real estate professions have to abide by. You are simply a property owner whose licensing comes from properties rights afforded to us by the Constitution of the United States of America. The North American REIA (NAREIA) is the fastest growing adult financial literacy organization in the country. Members of NAREIA from all over the country get to network with each other on virtual conferences. Members attend these conferences from all over the world. NAREIA offers its gold members FREE video training online. Members create a profile, sign-up for membership, and get access to hundreds of video trainings, recorded meetings, webinars, blogs, articles, recorded conferences, technology training events and more. NAREIA has a members-forum that allows you to market Wholesale Deals to members, buyers with large down payments, access to private money lending, hard money lenders, discounts on all lending products for being a member.

19 The North American REIA and its chapters are the best place to meet new investors, wholesale deals, find deals, get top-notch information, buy good educational materials, and further your development as a real estate investor. The North American REIA provides more resources and local Chapters to its members than any other real estate organization in the country. Become a member of North American REIA today and begin building long lasting relationships with like-minded investors & entrepreneurs from all over the country! Real Estate Investors Being a part of a Network of Investors is paramount to your success as a real estate Wholesaler. Chances are you will probably not be the first in your community to become a real estate investor. Wherever you find motivated sellers, you will find investors looking to find great deals. These investors are typically your competition. However, looking upon fellow investors in your field as competitors is a low level way of perceiving real estate investing or even business for that fact. The truth is, there are far more deals out there than you or your peers can ever begin to handle. Alienating your peers by perceiving them as your competition and thus your adversaries is a bad mistake to make in business. For the beginning investor, developing good relationships with other investors is a sure way to establish and grow your own investing business. When you see their signs, call them! If your goal is to be a duck, best start hanging out with a few. If you want to be an investor, you ll first need to know how to walk and talk like one. The only way to become an investor is to model your self after other

20 investors. If you want to be the best and brightest in your community, you must rub shoulders with the best and brightest real estate investors. If your goal is to soar with eagles, don t hang with turkeys Know your investors. Investors come in all shapes, sizes, and colors. The main thing to consider regarding other investors is: Do they have a clean track record doing business? If you do something good for someone, chances are, they may go out and tell 2-3 people. On the other hand, if you do something bad to someone, they may tell people. This is the nature of human beings. Identifying investors with shady practices should not be difficult. Networking with investors is a great way to find good deals. Often, you or another investor will receive a number of great leads on real estate deals. So many in fact, you won t be able to purchase all of them yourself. When you have three great deals and can only afford to purchase one, consider wholesaling the other two deals you cannot afford to other investors. By wholesaling deals you cannot afford to buy, you can easily leverage more money out of your marketing and advertising efforts. Wholesaling deals is the preferred method for most investors who get started in real estate investing. The money and expertise gained by wholesaling properties helps investors to build strong investing portfolios. You must crawl before you walk, and so on. Becoming a wholesaler is a necessary step for any investor who wants to become successful in the real estate investing field. It s the best way to learn how to market and advertise to find great deals. If you would like more information on how to take your real estate business to the next level, Sign-up as a member now Click here to become a member To register for a 30 minute coaching strategy session click here To Your Continued Success, Robert Woodruff