Investors

Basics of Real Estate Joint Ventures
Creating Real Estate Joint Ventures

Joint Ventures

Joint venture partnerships, commonly known as JVs, are formed between two or more people to invest in a specific investment opportunity, often between someone who lacks the time or expertise to invest in real estate, often referred to as the money partner, and an expert, often referred to as the real estate investor, who is looking to leverage his or her experience by providing the knowledge, skill and work needed to create a profitable investment in real estate.

JVs do not have to be long term or involve each party in all deals but can be done on a per deal basis.  The money partner may be silent and simply provide the capital needed to get started while the real estate expert conducts all the research, property souring, deal negotiations,  tenant screening,  and day-to-day property management. JVs are a good way for less experienced real estate  investors to start. The risks are reduced and beginners can grow their money while learning how to invest in real estate, making a decent profit in the process.  In many cases, you will find tired landlord or retiring real estate investors will be great joint venture sources.  Many times, they will not want to do the day to day work of putting the real estate deal together, instead they will guide a new real estate investor through the process in exchange for a piece of the rate of return on the deal they structured.  It is a great way to shorten the learning curve for a new real estate investor, landlord, or rehabber and gain information and knowledge from someone who has made money investing in real estate in their own back yard. 

Credit partners are also good people to enter into joint ventures with as well. When you work with a credit partner you have them qualify for a loan, and once you find and structure the deal, you use their credit to obtain financing for the purchase of the property. You then both agree to split the proceeds after the sale of the property or arrive at an agreement as to how money will be distributed within the joint venture. .

How joint venture partnership investments benefit a money partner or private investor:

  • Joint venture investments help the money partner realize more value for their money and time because they can leverage the knowledge and expertise that an expert brings to the table. Real estate experts can define a location and strategy for their investments and analyze the market to suit the money partner’s future needs.
  • Joint ventures provide a sense of security: if the joint investor is an expert with a solid, reputable background in real estate investing and a good investment portfolio, this reduces the level of risk.
  • Before a private investor invests with you, they will expect to see an exit strategy. Don’t be surprised if your investor wants a time-frame set for them to get their money back. You will want to spell it out very clearly in any contracts that you both sign. 

 

August 15, 2011 / 3 Comments / by / in , ,
Who are Real Estate Private Investors?
Private Investors & Cash Buyers

Find Private Investors

Private investors can be middle class people who have extra funds to lend for real estate ventures but do not want the headaches and paperwork of traditional real estate transactions. They might be retired, corporate executives, professionals such as doctors, lawyers, or business owners, or even blue collar workers all looking for returns higher than typically 3% to 5% from banks or in the stock market .  Real Estate private investors can pull the money they lend you from a number of different sources: retirement funds, corporate or personal lines of credit, equity pulled from a business or real estate, personal or business loans, profit from a real estate or business liquidation, inheritance, lottery, and court case winnings.

Compared to hard money lenders, real estate private lenders are generally a lot more flexible in their terms, the properties they will lend on, and how they are compensated. As long as they get the rate of return they are looking for and the deal seems sound and makes sense, they will invest in it. Keep in mind that not all private investors are the same. Real Estate private investors have different comfort levels for investing, and they may need different rates of return, may only fund certain types of properties or deals, they may lend for short or long terms, they may want to do joint ventures or partnerships, receive a deed of trust or mortgage recorded against the property in exchange for their funds, or they may have any other combination of other needs to do the deal.

Here’s a list of possible private money investors:

  • Family
  • Friends
  • Co-workers
  • Retired real estate investors
  • Retired entrepreneurs
  • Doctors
  • Dentists
  • Lawyers
  • Accountants
  • Angel investors
  • Tired landlords
  • Promissory Note Investors
  • People with IRAs, 401ks, or other retirement funds
  • Business owners with lines of credit or corporate credit
  • Other real estate investors
  • People with equity in real estate or a business
  • Fraternity brothers/sorority sisters
  • Acquaintance
  • Past or present employers/employees
  • Customers
  • Competitors
  • People with common interests or hobbies
  • People with good credit can get the loan for your deal and split profits or great return
August 15, 2011 / 2 Comments / by / in , ,
Finding Cash Buyers for your Wholesale Deals Part 1
Finding Cash Buyers to Build Your Buyers List for Real Estate Investing

Get Cash Buyers Now

There are a variety of different ways to find real estate investors, rehabbers, wholesalers, and cash buyers for your wholesale real estate deals. No matter, if you are just getting started in real estate or a seasoned real estate investor you can use these techniques to find buyer for your wholesale property deals. We will focus on creative ways to find cash buyers, rehabbers, and wholesalers for your wholesale properties. Here are some of the techniques you could use to build a buyers list: Section 8 Landlord List – Any local housing authority will have a list of the available properties that qualify for section 8 housing vouchers. You will find the property address, contact name and phone number for each of these properties. These people are landlords and real estate investors. Many of these people are looking to buy more rental properties right now. You will want to focus on properties on this list that are single family homes, duplexes, triplex, and fourplexes. MLS Relisted Properties – Real estate agents have access to the Multiple Listing Service AKA MLS. They can do a variety of different searches for you. One of the searches can be for properties that are sold and relisted for list prices that are more than the original list price with the keywords remodeled or updated in the comments or remarks section. You will find the address and you can cross reference that with the county records to find the owners name and address. You can then take that information to google or reverse search on white pages to find their phone number. MLS Sold Properties – Real Estate agents can also do a search on the MLS for properties that have sold for cash. These are real estate investors and cash buyers. We can get a great list from our agents to pursue. We will get the proeprty address and we can then take that information back to the courthouse records in that area and find the name and address for the real estate investor on that property. Driving Areas & Looking at Properties For Sale – When you are out looking for properties you can find real estate investors, rehabbers, and wholesalers in these areas if you keep your eyes open. As you start going into different areas you are going to see properties go on and back off and back on the market for sale. If the property looks like it is being rehabbed, you have a very high probability of it being a real estate investor, rahbbers, or wholesalers project. I have walked up to the workers on the project. Many times I have spoken to the rehabber themselves or met the contractor on the project who gave me the rehabbers contact information. Even if they did not give me the rehabbers contact information, I have acquired enough information to know that it is a property owned by a rehabber. In some cases, I will see it has a for sale by owner sign, I will take own that information and call on that property. Majority of the time, I will talk directly with the rehabber. If it is listed by a real estate agent, I will take that property address and go back to the courthouse and look up the property address to gain the owners information and their mailing address. Driving Areas & Calling on Properties For Rent – When you are out looking for properties you can find real estate investors, rehabbers, and wholesalers in these areas if you keep your eyes open. As you start going into different areas you are going to see properties for rent. No matter if it is listed for rent by a property management company or a private party sign, I call and ask them questions about the property. In some cases, it is a private retail property owner, but many times I find that it is an investor who buys and rents properties in that area. The best part is that now I know what areas they are looking to buy in and what types of properties they are looking for. Courthouse Research: Tax Deeds & Tax Lien Certificates – the county courthouse has wealth of information and many oportnities to find cash buyers, wholesalers, and rehabbers. One way to find these real estate investors is to look for tax deeds or tax lien certifcates recorded in your county courthouse land records department. Why? These are cash buyers and can be great keads to build your buyers list. You will want the parties that have multiple entries in these records. You will find their name and mailing address on these documents. You can do a google search or reverse search on whitepages for their name. Courthouse Research: Sheriffs Deed or Trustees Deed – again we are back in the county courthouse looking for more documents. We are looking for TRustees Deeds or Sheriffs Deeds. You want documents that have grantee, mortgagee, or benficiary listed as a private name, trust, or a small LLC. Basically, any name is okay as long as it is not a bank. You will want to collect their name and mailing address. Obviously, you will prefer to collect the names of buyers who have done multiple deals. Courthouse Research: Quit Claim Deed – At the courthouse, you will find that people also record quit claim deeds too for a variety of different reasons such as: Divorce, Name Change, Estate Purposes, and Real Estate Investing. So, it is not a full proof approach, but it is a great way to find rehabbers and other real estate investors. You will look for people doing these quit claim deeds over and over again. You will want to collect thier name and mailing address. In some cases, you will actually find two real estate investors in your area, due to a wholesaler selling the property to another real estate investor. Some times, you will find that the investor will buy the property in their name and then quit claim the property to their LLC or Trust. Now, you have two names and mailing addresses to try and contact these people. You will want to collect their name and mailing address, so you can do a google search or reverse search on whitepages. These are just a sampling of some of the many ways your can find rehabbers, wholesalers, real estate investors, and cash buyers. We will continue with other techniques in the Finding Cash Buyers for your Wholesale Deals Part 2 post.

July 20, 2011 / 4 Comments / by / in , , ,
Self Directed 401K’s Used to Invest in Real Estate
While the concept of investing in real estate and other assets 401k’s has been around for more than 30 years, it hasn’t received a great deal of attention. Why? Most custodians that offer 401(k)s (banks and brokerage firms) focus on mutual funds and CDs—because they have vested financial interests in having you select their own investments. Due to this fact,  there’s a common misconception that these are your only investment options for retirement plans.A self-directed 401(k) is technically no different than any other 401(k) or IRA. It’s unique because of the available investment options.  A truly self directed IRA/401(k) custodian allows CD’s, mutal funds, stocks, and bond investments PLUS real estate, notes, private placements, tax lien certificates and much more.

IRS Publications 560 and 590 clearly state the rules and regulations governing IRAs and qualified retirement plans such as 401(k)s. To ensure compliance, you should be familiar with specific rules for 401(k)s, and, in particular, self directed 401(k)s.

Most importantly, the IRS prohibits “self-dealing,” investments in which you or family members of lineal descent have prior ownership.  It might be another worth while option for you to consider using to invest in real estate with your own retirement funds or someone else you know is looking to diversify their investment portfolio.

 

June 29, 2011 / by / in , ,
Peer to Peer Lending – Down Payment and Rehab Money for Real Estate
Peer to Peer AKA P2P  or social lendingor microlending websites can be another resource to tap into for down payment, rehab, or even real estate purchase loans.  P2P lending websites allow you to skip the bank and borrow from individuals. You can borrow from complete strangers within these lending networks or just use peer to peer lending services to structure loans between friends and family.  Peer to peer loans can be secured and unsecured. The peer to peer lending services check your credit as part the application process then they tell potential lenders how good your credit is on your loan request and help them in determining an appropriate interest rate based on the risk associated with your credit and type of loan request.  The loan terms vary, but in most cases they have a fixed rate amortizing loan that lasts 3-5 years.In most cases, you will find that the maximum you can borrow at any one time is $25,000. Some of the larger P2P lending websites are www.prosper.com, www.lendingclub.com, and www.peer-lend.com.

 

June 29, 2011 / 4 Comments / by / in , ,
Angel Investors AKA Private Investors for Real Estate Deals

What is an Angel Investor?  An Angel investor as an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. Sometimes angel investors will pool their money to give themselves a larger capital pool of funds.  From time to time, they are looking to diversify their investments from start up businesses to investing in real estate ventures. 

You may want to go and pitch your ideas where angel investors gather. Here are some places where angel investors come and those looking for funding can come and pitch their business plans.

There are a number of expectations you need to discuss with your potential angel.  First, you should find their motivation.  Especially in real estate, many may simply be lacking the time necessary to find deals.  You must know how much the angel wants to be involved and what value you are bringing to the investor.  You must be able to show him clearly why his money is best in your hands despite the risks.

Real estate seems intuitive to many people, and therefore they will want to understand in more detail exactly how you plan to generate returns for them.  Remember throughout the process that raising money, especially large amounts, takes time.

Be sure to have a strong business plan and describe what makes your business idea stand apart:
Angel Capital Association http://www.angelcapitalassociation.org
Angel’s Forum http://www.angelsforum.com
Band of Angels http://www.bandangels.com
Common Angels http://www.commonangels.com
Keiretsu Forum http://www.k4forum.com
Launchpad Venture Group http://www.launchpadventuregroup.com
New World Angels http://www.newworldangels.com
Robin Hood Ventures http://www.robinhoodventures.com (charges $250)

Go Big Network http://www.gobignetwork.com 

Most angel investors require very high returns to offset the high risks they assume.  If you are planning a business that will bring you a large amount of income personally but will not generate millions of dollars in revenue or grow extremely quickly, then you may have trouble attracting investors.  They may want to see 30% returns on their money per annum.

 

June 29, 2011 / 2 Comments / by / in , ,
Finding Cash Buyers for your Wholesale Deals Part 1
Building Your Cash Buyers List

Build Cash Buyers List

There are a variety of different ways to find real estate investors, rehabbers, wholesalers, and  cash buyers for your wholesale real estate deals.  No matter, if you are just getting started in real estate or a seasoned real estate investor you can use these techniques to find buyer for your wholesale property deals. 

We will focus on creative ways to find cash buyers, rehabbers, and wholesalers for your wholesale properties.  Here are some of the techniques you could use to build a buyers list:

  • Section 8 Landlord List – Any local housing authority will have a list of the available properties that qualify for section 8 housing vouchers.  You will find the property address, contact name and phone number for each of these properties.  These people are landlords and real estate investors.  Many of these people are looking to buy more rental properties right now.   You will want to focus on properties on this list that are single family homes, duplexes, triplex, and fourplexes. 
  • MLS Relisted Properties – Real estate agents have access to the Multiple Listing Service AKA  MLS.  They can do a variety of different searches for you.  One of the searches can be for properties that are sold and relisted for list prices that are more than the original list price with the keywords remodeled or updated in the comments or remarks section.  You will find the address and you can cross reference that with the county records to find the owners name and address.  You can then take that information to google or reverse search on white pages to find their phone number. 
  • MLS Sold Properties – Real Estate agents can also do a search on the MLS for properties that have sold for cash.  These are real estate investors and cash buyers.  We can get a great list from our agents to pursue.  We will get the proeprty address and we can then take that information back to the courthouse records in that area and find the name and address for the real estate investor on that property. 
  • Driving Areas & Looking at Properties For Sale – When you are out looking for properties you can find real estate investors, rehabbers, and wholesalers in these areas if you keep your eyes open.  As you start going into different areas you are going to see properties go on and back off and back on the market for sale.  If the property looks like it is being rehabbed, you have a very high probability of it being a real estate investor, rahbbers, or wholesalers project.  I have walked up to the workers on the project.  Many times I have spoken to the rehabber themselves or met the contractor on the project who gave me the rehabbers contact information.  Even if they did not give me the rehabbers contact information, I have acquired enough information to know that it is a property owned by a rehabber. In some cases, I will see it has a for sale by owner sign, I will take own that information and call on that property.  Majority of the time, I will talk directly with the rehabber.  If it is listed by a real estate agent,  I will take that property address and go back to the courthouse and look up the property address to gain the owners information and their mailing address. 
  • Driving Areas & Calling on Properties For Rent – When you are out looking for properties you can find real estate investors, rehabbers, and wholesalers in these areas if you keep your eyes open.  As you start going into different areas you are going to see properties for rent.  No matter if it is listed for rent by a property management company  or a private party sign, I call and ask them questions about the property.  In some cases, it is a private retail property owner, but many times I find that it is an investor who buys and rents properties in that area.  The best part is that now I know what areas they are looking to buy in and what types of properties they are looking for. 
  • Courthouse Research: Tax Deeds & Tax Lien Certificates – the county courthouse has wealth of information and many oportnities to find cash buyers, wholesalers, and rehabbers.  One way to find these real estate investors is to look for tax deeds or tax lien certifcates recorded in your county courthouse land records department.  Why? These are cash buyers and can be great keads to build your buyers list.  You will want the parties that have multiple entries in these records.  You will find their name and mailing address on these documents.  You can do a google search or reverse search on whitepages for their name. 
  • Courthouse Research: Sheriffs Deed or Trustees Deed – again we are back in the county courthouse looking for more documents.  We are looking for TRustees Deeds or Sheriffs Deeds.  You want documents that have grantee, mortgagee, or benficiary listed as a private name, trust, or a small LLC.  Basically, any name is okay as long as it is not a bank.  You will want to collect their name and mailing address.  Obviously, you will prefer to collect the names of buyers who have done multiple deals. 
  • Courthouse Research: Quit Claim Deed – At the courthouse, you will find that people also record quit claim deeds too for a variety of different reasons such as:  Divorce, Name Change, Estate Purposes, and Real Estate Investing.   So, it is not a full proof approach, but it is a great way to find rehabbers and other real estate investors.  You will look for people doing these quit claim deeds over and over again.  YOu will want to collect thier name and mailing address.  In some cases, you will actually find two real estate investors in your area, due to a wholesaler selling the property to another real estate investor.  Some times, you will find that the investor will buy the property in their name and then quit claim the property to their LLC or Trust.  Now, you have two names and mailing addresses to try and contact these people.  You will want to collect their name and mailing address, so you can do a google search or reverse search on whitepages.  

These are just a sampling of some of the many ways your can find rehabbers, wholesalers, real estate investors, and cash buyers.  We will continue with other techniques in the Finding Cash Buyers for your Wholesale Deals Part 2 post. 

June 29, 2011 / 1 Comment / by / in , ,
Finding Cash Buyers for Your Wholesale Deals Part 2
Building a Cash Buyers List

Building a Cash Buyers List

In this part, we are going to focus primarily on search engines to find cash buyers, rehabbers, wholesalers, and just simply real estate investors.  Did you know that a majority of all people shopping for homes today whether to buy or rent will go online first to start their search?  The numbers are insane.  There are so many people using online tools to find their next place that we would be great fools if we chose to look elsewhere.  HEY…but you said we were going to look for cash buyers, wholesalers, rehabbers, and real estate investors not the people buying from them……yes…..let’s see if one of these groups is going to effectively hit their target audience they need to be online and marketing right…to their target audience to be competitive in their local market!!!  So, we are using their marketing to find them!!!  Get it!!!  Yes, we make it very easy and like to work smarter than harder.

So, where do real estate investors, wholesalers, rehabbers, and cash buyers market to attract their buyers and renters?  Well we don’t even need to know that….we have a search engine that can help us figure that out and bring it all back to one spot.  Now, not just any type of search will do.  You want to work smarter rather than harder right, so you need to search using certain keywords the real estate investors use to advertise. Let’s go through a list of some of the words they might use.  Oh and a quick reminder, these keywords are what real estate investors use in their marketing to find seller and buyers. 

Sellers   Buyers
We Buy Houses Lease Option
Cash for Houses Rent to Own
We Take Over Payments Seller Financing
Stop Foreclosure Owner Will Carry
Fast Closings No Banks Needed
We Buy Houses Fast Financing Available
We Buy Houses for Cash Bad Credit, No Problem
Behind on Payments? $XXX down/$XXX month
Avoid Foreclosure Why Rent, When Can Own!

These are all headlines or “buzz words” they will use in their different online advertisements.  In addition to those, you might find that they will also advertise to sellers using these buzz words:  Fixer Upper, Handyman Special, TLC, Wholesale Property or Wholesale Properties, and Completely Remodeled. 

In order to continue working smarter and not harder, let me show you how to perform a search on google, yahoo, and bing with better results.  The group of words introduced above will need to be enclosed in quotation marks to keep the words together in the search.  For example, if we wanted to search for the phrase WE BUY HOUSES, we would enter it into the search box in this way “We Buy Houses”.  The quotation marks helps that whole keyword phrase stay together and return only those results.  Now, if we want to make it specific to a particular location for instance, Philadelphia, PA we would put quotations marks around it too and link the two sets of words together with a plus symbol.  For example, we would type this into the search box “We Buy Houses” + “Philadelphia, PA”.  We would find the search results to have we buy houses and philadelphia pennsylvania ties together in the first sets fo search results.  Again we save time because we focus on our area and our target audience in the search.  We can interchange the keywords too.  For example, we want to search for Lease Options just in Pennsylvania then we would type into the search box “Lease Option” + “Pennsylvania”.  See how this can be interchanged and used to get more dialed in results for our area? 

You will find that your search results will contain online classified ads, yellow page listings, blog posts, websites, social networking listings, discussion threads, online videos, photos, and much more.  Hopefully, you can see how powerful and easily you can build your cash or investor buyers list.  You will just need to jot down their contact information and follow up with them after that.

June 29, 2011 / 4 Comments / by / in , ,
Finding Cash Buyers for Your Wholesale Deals Part 3
Building a Cash Buyers List

Building Cash Buyers List

There are a lot of different ways that we have mentioned to gain a list of cash buyers for our wholesale property deals.  You will want to build and tap into your powerteam.  On your power team you should have real estate attorneys, mortgage brokers, lenders, handymen, contractors, home inspectors, real estate agents, property managers, accountants, title companies, etc.

You will want to make sure these power team members have experience working with real estate investors or are real estate investors themselves.  If they have this level of experience they will have many contacts within the industry.  In many cases, they will offer referrals of these cash buyers to you. 

For instance, handymen & contractors are the main people doing the rehab and repair work on the cash buyers  properties and it is in their best interest to help these cash buyers find more wholesale properties.    In fact, if you know that one contractor is pretty popular with real estate investors.  You could request a list of properties that they have filed/pulled permits on in the area.  You can then cross reference those and find out who their real estate investors are that way by who was owner at the time the permit was pulled.  If you see these same owners over and over again you have you cash buyers. 

Real estate attorneys write the contracts and handle the legal issues for real estate investors.  They can offer your contact information to their clients or pass a long the details of the deal they are helping you with onto other investors.  They will help you with your assignment of contract, simultaneous close, or other technique to transfer the property from your control over to another real estate investor.  They might even be the party that takes care of the closing. 

Home inspectors, mortgage brokers, lender,  and propery managers are in the same boat as the rest in that they will make more money if they help you find cash buyers to buy your properties, because it will put more money in their pocket too.  The more deals they help you do, the more money they make for their investor clients, thus the more money they make too. 

Real estate agents who represent local cash buyers might be a great source to help you find cash buyers for your wholesale properties.  It is in their best interest because they make a commission from the matching up of the deal.  You might be finding wholesale properties that are not on the MLS, thus you help the agent bring desireable and unadvertised deals to their cash buyers. 

Title companies can be a great source to pull courthouse information for you.  In many cases, they have more fields that they can select to narrow down a courthouse search to your specific criteria.  In fact, they could do a search for out of state owners.  In many cases these are cash buyers, landlords, or even motivated sellers.  They can do a search for people who have sold property with financing.  In some cases, these are those real estate investors that are offering seller financing.  They will be the mortgagee, grantee, or beneficiary on a mortgage or deed of trust.  They will have their own name, their trust, or a small looking LLC.  Essentially, they will look for anything other than the major or local banks listed in this position on the mortgage or deed of trust.  These people are great sources for cash buyers. 

Accountants are going to be helping real estate investors with tax, financial and estate planning.  They might help advise them on 1031 exchanges and other tax deductions they can take to minimize the real estate investors tax hit.  It is in their best interest to help bring more real estate opportunities to their clients attention to help them meet their goals for each year. 

All in all, if you build a power team full of these key members for your business they will help you build your business not only by their level of expertise, but also through the strategic alliances they have in the industry too.

June 29, 2011 / 1 Comment / by / in , ,
In Today’s Economy: First Step to Successfully Making Money in Real Estate Investing!
Steps to Success in Wholesaling Property

Success in Wholesaling Property

During the years 2000-2007, we had quite a bit different real estate market then we do today.  During that time, buyers were easy to find, but discounted properties werehard to find.  Today, we have a situation where the properties are easy to find and for great prices, but the amount of qualified buyers is limited.  This is due to the lenders clamping down on their lending criteria. 

Therefore, in order to be successful in real estate investing  today, you need to have a buyers list first.  You need to know what your buyers want and where before you start looking for properties.  After all this should make sense from a business perspective, because a business is a lot more  successful when it focuses on what its customers want and for what price.   We are doing something similar to this by finding out what they want, where they want it, how much they can afford, what features it needs to have, etc. 

If you are focusing on real estate investing that offers quick returns, such as flipping houses.  In this case,  you can target two different types of buyers.  These buyers will be owner occupants and wholesalers. 

Let’s discuss the owner occupant buyers first.  They are the buyers who are looking for another home.  In most cases, they will live there for the next 3-15 years.  It will need to meet their specific budget, accomodate their family via size and accomodations, and be located in a favorable area to support their lifestyle.  Essentially, they will be a lot more picky buyers.  They will need to qualify for conventional financing, thus fewer of these buyers will be able to obtain a loan to buy the property from you. 

Wholesalers are real estate investors working in your local area.  They are actively buying and selling properties.  They have established a system that works for them in that area.  Therefore, they will have specific criteria for the properties they buy in order to maintain a certain profit margin.  There criteria will not be as limited as the owner occupant buyers, because they will not be living there.  Wholesalers want a certain type of deal, but many homes will meet their criteria.  The best part of working with wholesalers is that they have connections in the area to make sure their properties close.  Most of them are going to be cash buyers, thus they will be able to close faster and more consistently.  Wholesalers have a power team in place that will help them close deals on a regular basis too.  If you are a new real estate investor, wholesalers can help you shorten your learning curve in real estate.  They will teach you where to look, what to look for, what to pay, how to exit the deals for profit, and who to work with in that area.  Essentially, they give you a ready made system that is proven and works. 

You might wonder why a wholesaler would pay you money to find them properties, when they already have the experience and resources to do this on their own?  You make a great point.  However, many wholesalers are busy and try to reduce the amount of time they spend doing things they don’t have to do.  They are willing to spend money to buy your property leads, so they can reduce the amount of time they have to spend finding properties and negotiating deals.  Think of it this way, the more properties a wholesaler has the abiity to close on the more money they can make.  They make money  buying and selling properties.  The only way they can increase their income is by closing more deals in a given year.  Now, hopefully you can see why they are willing to pay you good money over and over again to help them find good property deals to buy.  

Wholesalers are the main buyers that I would recommend focusing my attention on when you first get started in the real estate investing industry.  You will be able to close more deals faster and more consistently.  They are repeat buyers too.  In any good business model, it is best to have a customer base that you can rely on for repeat purchases.  It will save you time and money spent constantly looking for new buyers for your properties.  You will be abke to do more deals faster.  In many cases, you will be able to do multiple deals at a time when you have a group of wholesalers to work with in your area. 

It is best to shoot for at least 30 wholesalers that you have spoken with, so you know what their investment criteria is, so you can start looking for properties for these wholesalers.  Once you start putting deals in front of these property wholesalers, you will find that 8-12 will close consistently.  They will most likely be your best customers and the ones that will take you under wing a bit.  In many cases, they wll teach you more about their business so you can structure better deals for them.  In the end, it will benefit them and put more money not only in their pocket, but in yours too.

So, in order to get on the fast track to success in real estate investing today, your first step is to build a list of wholesalers who are doing real estate deals in your own backyard.

June 29, 2011 / by / in , ,