Wholesaling 101

Congratulations to those investors who have signed up to do the 30-day Challenges sponsored by the Real Estate Association of Puget Sound. I have been meeting with a number of these novice real estate investors and coaching them on how to get started.

Many of them are interested in wholesaling real estate. "Wholesaling" simply means to buy low and sell low. Wholesalers typically find distressed or otherwise undervalued properties, and sell them to another investor who will fix up the property or add value before offering it for sale to an end-buyer at market price. In order for this to work, the investor who is doing work on the property must be able to purchase the property at a low enough price to make a profit after they have completed their work.

Wholesalers make a modest amount of money by finding properties, and getting them under contract for the rehab investor.

Many new wholesalers are still confused about how and where to start, and many, without a solid background in real estate, are nervous about talking to Sellers.

I do not recommend that they start with Sellers. Instead, I recommend that they talk to buyers - the investors that will pay cash quickly to purchase a good wholesale deal. These buyers are easy to find - they are members of your local real estate investment association.

How easy is it to identify these buyers? Simple. Just go through your association's membership directory and start calling. You are now taking orders for the types of properties for which you should be searching.

Here are a list of questions for your buyer prospects:

• Do you buy properties from wholesalers? What types of properties do you buy? What is your criteria for these properties? Where? What price range?
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• If I found a property that meets your criteria, should I contact you?
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• Are you a cash buyer? How much money would you have to put down on a property? How many deals can you handle a month/year?
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• How quickly could you come up with the funds?

Now, armed with your buyer information, doesn't this make it much easier and safer to speak with sellers?
Hello, Mr and Ms Seller. I have several buyers who are interested in purchasing properties like yours - would you consider selling? 

And for those of you doing the 30-day Challenge, be sure to identify a challenge that you can control. You may or may not be able to get a property under contract in 30-days for example, as that requires a willing seller. But you certainly can control how many phone calls you will make every day to sellers, for example. You have total control there.

Do the behaviors that lead to success in real estate investing, and you will eventually be successful.

Happy Investing!

Building a Cash Buyer List

Trevor Mauch uses the following letter to build his private buyers’ list, which he sends to a list of people who have used all cash to purchase property in his area :

Private Lender Name
Address

RE: Discount cashflow properties here in [your city]

Hi [name of investor],

I’m [your name] with [name of your company] and we’re an active real estate investment firm here in [your city]. I ran across your name in the public records for [private loan property address] and noticed we’re active in the same market.

Our focus has always been to find great properties that we can keep and cashflow ourselves… but the last 18 months or so we’ve been finding so many great deals and great properties with our relationships with the banks here in town and our marketing systems we’ve developed…

… that we have more properties at 40-60% discounts than we can handle ourselves.

We’d love to put you on our “buyers list” so we can send you over the new properties as we get them so you can jump on ones that match up with your strategy.

It doesn’t cost you anything… we just email out the discounted properties we’ve put under contract (minimum 30% discount) to our small buyers list (usually 2 to 3 times a month) as we get them. From there the properties usually get picked up within a week because of the deep discounts we’re negotiating with the sellers.

You can visit our website at www.yourwebsitehere.com to join the list or give me a call anytime on my cell, [your cell #] to let me know you’d like on the list.

Have a great week and I look forward to connecting with you!

[signature here]

P.S. I noticed you’ve done some private lending in the past… we’ve got a few dozen quality local real estate firms on our buyers list who pick up their properties from us. I know some of them work with private lenders to buy our properties… so if you’d like, I can pass you along those private lending leads so you can take a look and see if you want to put more of your idle capital to work for you.

I’m not a broker so I don’t want a referral fee or anything… I just want to help our good buyers close more quickly and help you deploy some of that capital that might not be working for you right now. If you want me to pass those leads your way let me know! If it’s a fit, great. If not, no big deal at all.

[your name, company name and info]

Happy Investing!

Wholesaler's Buyers List

Real estate investor Patrick Riddle offers a free Investor Phone Script, developed and used by Eric Medemar, that outlines how wholesalers should talk to prospective investors and cash buyers. This is a great method for developing a Buyer's List, if you are planning to wholesale properties to other investors.

Basically, the script goes something like this:

• "Hi, this is Wendy Ceccherelli, from Home Land Seattle.com." (It helps to have a website with a URL that relates somehow to the type of investing you will be doing. It is inexpensive to set up, and creates instant credibility that makes you look like a big time investor).
• "I'm an investor here in Seattle (name of your city) and I was researching a house to buy on (name of street). I noticed that you had purchased a property at (address on same street)."
• "Do you still own that property?" Depending on answer, follow up with questions about their particular niche for investing.
• "What do you think of the area (where their house is located)?"
• "Hey, thank you for your time and insight (on area). It's been really helpfuI and I really appreciate it."
• "Now before I go, I do occasionally come across some bargain properties that I can't close because I am tied up on other properties. I'd be happy to return the favor and give you the inside track when I come across these. Would you mind if I gave you a shout whenever I have some properties that you might like?"
• "OK, is this the best number to reach you? or should I shoot you an email?"

That's it! For access to this FREE investor script, or others like it, please contact me at HomeLandInvestment@gmail.com or 425-270-7292.

Happy Investing!