A Simplified Road Map To Fast Money
Table of Contents
Chapter 1
Getting Started --------------------------------------------------------- 1
Chapter 2:
Two Steps for Success ---------------------------------------------- 4
Chapter 3:
Controlling the Property -------------------------------------------- 8
Chapter 4:
How Much Can You Expect to Make? ------------------------ 15
Chapter 5:
Motivated Sellers ---------------------------------------------------- 19
Chapter 6:
Prospects-Leads-Deals-------------------------------------------- 22
Chapter 7:
Harnessing the Internet ------------------------------------------- 24
Chapter 8:
Conclusion------------------------------------------------------------- 29
A Simplified Road Map To Fast Money
Copyright Notice This Book/Course is © copyrighted 2012 by Instant Investor, LLC. No part of this may be copied, or changed in any format, sold, or used in any way other than what is outlined within this Book/Course under any circumstances. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means electronic or mechanical. Any unauthorized use, sharing, reproduction, or distribution is strictly prohibited.
DISCLAIMER AND TERMS OF USE AGREEMENT The author and publisher of this book/course and the accompanying materials have used their best efforts in preparing this book/course. The author and publisher make no representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this book/course. The information contained in this book/course is strictly for educational purposes. Therefore, if you wish to apply ideas contained in this book/course, you are taking full responsibility for your actions. Every effort has been made to accurately represent this product and it’s potential. Even though this industry is one of the few where one can write their own check in terms of earnings, there is no guarantee that you will earn any money using the techniques and ideas in these materials. Examples in these materials are not to be interpreted as a promise or guarantee of earnings. Earning potential is entirely dependent on the person using our product, ideas and techniques. We do not purport this as a “get rich scheme.” Any claims made of actual earnings or examples of actual results can be verified upon request. Your level of success in attaining the results claimed in our materials depends on the time you devote to the program, ideas and techniques mentioned your finances, knowledge and various skills. Since these factors differ according to individuals, we cannot guarantee your success or income level. Nor are we responsible for any of your actions. Materials in our product and our website may contain information that includes or is based upon forwardlooking statements within the meaning of the securities litigation reform act of 1995. Forward-looking statements give our expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words and terms of similar meaning in connection with a description of potential earnings or financial performance. Any and all forward looking statements here or on any of our sales material are intended to express our opinion of earnings potential. Many factors will be important in determining your actual results and no guarantees are made that you will achieve results similar to ours or anybody else’s, in fact no guarantees are made that you will achieve any results from our ideas and techniques in our material. The author and publisher disclaim any warranties (express or implied), merchantability, or fitness for any particular purpose. The author and publisher shall in no event be held liable to any party for any direct, indirect, punitive, special, incidental or other consequential damages arising directly or indirectly from any use of this material, which is provided “as is”, and without warranties. As always, the advice of a competent legal, tax, accounting or other professional should be sought. The author and publisher do not warrant the performance, effectiveness or applicability of any sites listed or linked to in this book/course. All links are for information purposes only and are not warranted for content, accuracy or any other implied or explicit purpose.
A Simplified Road Map To Fast Money
CHAPTER 1 Getting Started There are a few different ways you can become involved in real estate investing, which one you decide on all depends on how much risk you are willing to take. One option is to invest in properties that provide a monthly rental income; this leads to the accumulation of wealth with nothing more than making sure the property is leased. Another route you may take is to buy raw land, build a house on it, and then reap the profit from the additional value that you created. The next alternative is to buy run-down houses, fix them up, and sell them at a profit, which is commonly known as “flipping”. However, if you have a bigger appetite for risk and enough room in your pocketbook you may want to buy parcels of land in areas where you believe their value will appreciate significantly over time. Despite all of these wonderfully positive sounding options, there are downsides to all of these “get-rich” strategies. Each endeavor is time-consuming, expensive, and not to mention, unpredictably risky. So instead, let’s turn our focus to a strategy that creates profits almost immediately. This is the business of wholesale real estate deals, where the name of the game is:
Buy Right
Sell Quick
Profit Big
Not only will I tell you how to secure large profit margins, but also how to do so with limited investment and no liability! However, first things first, and before we start let’s discuss the most important aspect of starting any entrepreneurial project WHY do you want to enter the realm of real estate investing? For that matter, why do you want to be an entrepreneur at all?
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What’s Your ‘WHY?’ Everyone has his or her own reasons for getting involved in a business venture. Personally, mine is my family and the desire for financial freedom. I want to be in a position where I can provide my family the lifestyle they deserve, as well as having the luxury of living on my own terms. I do not want to answer to “The Man” for the rest of my life, stuck in the never ending “corporate ladder”. That is not my idea of a happy and successful life. A fixed monthly salary does not mean much to me, nor does it do much for my goal of financial freedom. By developing into a successful entrepreneur I can begin to close in on my aims. One thing that comes with this business is the fact that your salary is never fixed – it is virtually limitless. You determine how much you make by how much you put into it. Thus, my family’s happiness, the comfortable quiet lifestyle that we lead, and the financial freedoms that I now enjoy are what drive me to outperform the competition and what provide me with my thirst to succeed. WHAT’S YOUR “WHY”? Your WHY should be the driving force that is behind your ultimate success. Another principle to keep in mind is that it is imperative to recognize the BIG picture. Most people are not capable of seeing this, and they immediately deem money as the sole motivator for their venture. You are in luck though, by already knowing that money is not the motivator you are already far and above most of the competition, and well on your way to success. The reality is, that money does nothing more than to enable the real motivation to be able to come to fruition. Money alone does not motivate, that should be clear. It’s what the money means to you that will motivate and inspire you to succeed. While I’d love to be able to tell you that once you get started it’s all smooth sailing from there; we all know that this is not the case. Eventually you will face problems and have to endure various setbacks. However, if you have a true driving force you will be able to overcome these challenges and enjoy long-term success
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What is it that you desire? What do you want to accomplish with your life? The possibilities are endless. It could be to have an ideal lifestyle, or to gain that freedom from a 9-5 job, or finally having that wealth and financial security that you always strived for. On the other hand, it could be that you want to leave a legacy for your children, or that you want to help the less fortunate, or that you want to create an endowment for service organizations. You should know what it is before you ever begin.
It is well worth the effort to figure out what your ‘WHY’ is right now, rather than risk losing your drive later. It is absolutely vital to know why you want to start a business and what it is that you want to produce before you ever consider jumping into a new venture. Whatever it may be, write it down on a piece of paper and keep it in a safe place. Whenever times are hard, refer to this ‘WHY’ often to reinspire you and keep the flames of your passion burning strong. I suggest that before you continue reading; ponder for a moment: What’s your ‘WHY’?
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CHAPTER 2 Two Steps for Success Success in any business venture boils down to a very simple two-step formula.
1. Knowing the appropriate information. AND 2. Being able to effectively implement it.
It simply does not make sense to try and propose a new venture without first having a proper understanding of how the systems in your chosen field operate. You should seek out as much information as you can about the subject, and make sure that you understand all of the associated concepts. This way you know how to successfully accomplish your goals, and how to avoid the usual mistakes. Another point to remember is that education must be combined with experience. If all you did was continuously gather and study information without actually implementing the strategies that you learned the education aspect would prove useless, and you would be equivalent to a nice textbook on a college student’s desk.
The correct plan of action is to take a single program and fully implement it. Only after should you even begin to look into different strategies. In other words, rather than trying to cover all the bases and instead ending up spreading yourself too thin to accomplish anything you should focus on a single reachable goal and work from there. It is more productive to master one technique rather than dabble in many.
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Let’s sort this out with an example. This mandate is about turning quick profits by wholesaling real estate. When I began in my real estate venture I hadn’t the faintest clue of what wholesaling real estate was all about. In my previous job I was the manager of a fast food restaurant. For me a wholesaler was someone who sold food in bulk at a discounted price. It was only natural for me to assume that a wholesaler of real estate was doing the same type of thing.
I assumed that I had no use for a wholesaler, since I could barely get the resources together to buy one property, let alone buy properties in bulk. However, this wasn’t the case at all, I was completely wrong in my misinformed judgment. It turned out that in real estate, a wholesaler does not sell properties in bulk. In fact, a real estate wholesaler sells individual properties at a discount. Wholesalers provide investors with great deals that are already pre-negotiated, and already have the large profits built in.
Instead of doing my due diligence and working with a wholesaler, I attempted to find deals by myself, without anywhere near the appropriate amount of education. I was following too much free advice – and while I worked hard, it was all on the wrong tasks.
I finally discovered the true value that wholesalers provide, and not long after had a deal handed to me on a silver platter. In fact, I continued this trend and bought my next several deals this way. That was, until I made the decision to begin locating my own deals and to start reaping the profits that wholesaling creates.
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Before we go any further, let’s first understand what a wholesaler actually does.
How Does a Wholesaler Operate? A wholesaler identifies profitable deals within a targeted marketplace, which may be as small as a single zip code, or as large as the entire country. The first step is to locate motivated sellers, or homeowners that need to get rid of their house. They are usually stuck in some messy financial situations, so they don’t just want to sell – they need to sell. The easiest and most effective method to locate these types of homeowners is to create a marketing strategy that pushes them to contact you. Thereby allowing the marketing to do all the work.
The central idea behind wholesaling is not to buy a property, but to control it. As a wholesaler, you control a property by creating a cloud over the ownership that makes it impossible for them to sell without your consent. You do this by entering into a Purchase and Sales Agreement (PSA) with the seller, which states that you will buy the property within an agreed up time period. (e.g. 30, 45 or 60 days from today or any other date agreed upon). The PSA provides you with Page | 6
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control over the property during that period. All the seller can do now is sit and wait. The Purchase and Sales Agreement provides you with time to advertise the property to your list of investors, collect and evaluate offers, and select the best buyer. It is important to understand that the price does not necessarily constitute the best offer, nor is it the only consideration. The best offer comes from a buyer who has the ability to close, or the available funds for purchase, and who is willing to pay the highest price.
Now here’s the tricky part, you cannot sell the property because you do not own it. You only have control over it via the Purchase and Sales Agreement. What you CAN do is sell your rights to the PSA. Those of which can be transferred via an Assignment of Contract, which allows the investor buyer to take your place as the holder of the PSA. From this point on the investor and seller do not come into contact until the actual closing. This is also when you get paid for your part of the transaction, and finally realize your profit. What the wholesaler gets paid for is locating the deal, and then assuring it gets closed.
You do not have to do anything with the property from the time the original PSA is signed to the time of the final closing. You have ZERO personal liability in this transaction.
You don’t need a loan because you were never going to buy
the property. You don’t have to manage because there is nothing to manage at the property in the interim.
There is NO risk involved. We are talking about a period of 30-45 days, from contracting a property to getting paid. After closing, your job is complete. There is no mortgage in your name, no renovations to complete, and no tenants to deal with. Last but not least, you can do all of this while working part-time. Page | 7
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CHAPTER 3 Controlling the Property If the only chip you hold is control of the property, then it makes sense to ensure that chip is protected, right? After all, the fact that you have already done all the work makes it that much more likely that someone will attempt to steal it away from you and nix you from the equation completely. However, there is good news. There are two readily available tools to keep that from happening.
These tools are the legal documents that create and protect your control of a property. The first is the Purchase and Sales Agreement (PSA), or the document that binds the property owner to the agreed upon sales terms. The other is the Affidavit and Memorandum of Purchase and Sales Agreement, which is filed at the courthouse, and makes the contract legally binding.
Purchase and Sales Agreement
The Board of Realtors usually uses a Purchase and Sales Agreement that is 5-7 pages long. Imagine trying to explain all that legal jargon to a distressed homeowner. They are not educated in the logistics of real estate, and shouldn’t have to be. Not to mention, they are already overwhelmed with the problems that are causing them to sell. A complicated document like the standard PSA will seem even more impossible to understand and only lead to skepticism.
That is why I use a simplified single-page PSA without all of the technical jargon. It states just one thing: That I will buy their house. It’s a simple agreement without all the typical contingencies. There is no financing. There is no inspection. There is no requirement for a Page | 8
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termite report. It even requires that the buyer – NOT the seller – pay all of the closing costs. Example Purchase & Sales Agreement:
There is then nothing left for them to deal with, and they can just pack up and move on with their lives. I handle everything else; all I need is their signature. Can you see why it is so beneficial to have a condensed understandable PSA? In fact, the PSA even favors the seller. Years ago an elderly lady wanted to show my PSA to her son before she signed. When asked if he was a real estate agent she replied that no, he was a local Superior Court Judge. Needless to say I was more than a little nervous. Much to my delight she phoned the next day saying that she was ready to sign, and that her son had said this was the fairest agreement he had ever seen in favor of the homeowner.
By this point you are probably wondering how, if there are no contingencies, and no buyer favorability, we are able to survive a deal
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in which we cannot perform. No need to worry, my PSA includes a basic clause, which limits liability to just the earnest money listed. Therefore, because I put little to no earnest money on a contract, any liability is miniscule. Now let’s make sure we have everything in the right perspective. Although this PSA greatly limits your liability, it is not a permit to make aimless offers that you never intend to execute. It simply provides a safety valve in case you make a mistake. When you stick to what you know works, you will always be able to close and profit from the deal.
Complete Protection To fully protect the deal from the occasional crooked buyer or seller, an Affidavit and Memorandum of Purchase and Sales Agreement is filed at the courthouse to prevent the transfer of clear title without your approval. Simply sign this one page document, have it notarized, and get it filed at the local courthouse. Then you will be good to go. This Affidavit, supported by the PSA, places a cloud on the title and warns any prospective buyers that you have the valid right to purchase the property, which they cannot supersede.
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Example Affidavit:
No closing agent can provide a clear title to the property once the Affidavit is filed. Anyone interested in purchasing the property must, first have you release the rights, which is entirely at your discretion. The three options you have now are: to choose to simply release the rights; charge a fee for the release; or assert your right to purchase. The options are yours.
No Expiration
Once in a while there will be a seller who has a change of heart and doesn’t want to sell. If you used a standard Board of Realtors contract it would have to specify a closing date. If the closing does not occur by that date, both parties must agree to extend the contract, and if the Seller wants to accept another buyer’s offer, they simply have to wait for the PSA to expire. Page | 11
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Now, the PSA I created is different. If the seller does not conform to the contract, it does not expire. The contract is valid even after years have passed. This means they have no choice but to sell to you, unless you release your rights to purchase the property that were created by the filing of the affidavit in the courthouse. If the Seller does conform, however, then the PSA expires within the closing period that is specified (usually 30-45 days).
Assigning Your Contract
Since you do not purchase the property, you do not have the right to sell it. You can however, sell and assign the rights provided to you in the PSA. The paperwork for this transaction is called an Assignment of Contract. The Assignment of Contract I use is another one page document written totally in favor of the Assignor (wholesaler).
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Example Assignment:
The Assignment provides all of the details for the closing. Referencing back to the original PSA, and denotes how the proceeds from the buyer are to be distributed, the original purchase price agreed upon by the seller, and the assignment fee to be given to the wholesaler. It requires the buyer to put up a significant amount of earnest money ($1500-$2000), which is non-refundable. If for some reason the buyer does not complete the purchase (unless it is the Seller’s fault), the earnest money is forfeited and a portion of it can be used as an incentive to persuade the seller to extend the closing period. This does not happen often, but it is nice insurance.
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Wholesaling Benefits Wholesaling is one of the best exit strategies for real estate investing because it offers so many benefits with so little time invested:
1. You do not have to purchase property 2. You do not incur any liability 3. You do not need a lot of money to do it. 4. You do not need a mortgage 5. There is little to no risk involved 6. There is no rehab 7. It is a quick turn profit 8. There is a minimal time commitment, so you can do it part time!
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CHAPTER 4 How Much Can You Expect to Make The amount of money that you can expect to make is determined largely by how committed you are to this business. Some people start off with the mind set that they are going to just “try it out”, and often these same individuals are the ones that are looking for a magic get rich quick program. While wholesaling is a remarkably easy and risk free way of bringing in large amounts of cash on a consistent basis, it is NOT magic. However, with just a little effort and tenacity on your part, you can see your bank account grow at remarkably fast rates. Even working just part time you will be making about $8,000 to $10,000 per deal. Once your marketing has had a chance to grow and actually establish in your area you will be able to close one to two deals a month. Annually this would be somewhere between $96,000 and $240,000 per year, working part time. According to the 2005 United States Census Bureau an income of $96,000 ranks in the top 20% of all household incomes in this country. Incomes of $240,000 are in the top 2% of all household incomes in the United States. In other words, this part time income with essentially no risk will put you in the very top percentiles of national income. This is exactly why wholesaling is my favorite strategy. It is fast, it has a quick turn round, and it is profitable, without risk.
However, I don’t advise dumping your current income while you are getting started in real estate wholesaling. Rather, I encourage you to maintain stability. Operate this strategy part time, create consistent profits, and then can make the decision to retire from your J-O-B if you desire. That’s exactly what I did before I left my corporate position. I retired and went full time with real estate once I started making more from wholesaling than I did in my corporate management position.
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Beware the Naysayers
No matter what venture you pursue there will always be those that feel compelled to offer their opinion as to why it won’t work – especially if they have not had enjoyed the success for themselves. These are the skeptics who look for reasons it won’t work, rather than accept that the responsibility to achieve rests with them. These people have a “victim” attitude: nothing is their responsibility – they are simply victims of the circumstances. They typically acquire little information on the topic, yet still have an abundance of opinions. I call them the “yeahbuts” because no matter what is said, they begin their next sentence with “Yeah, but…”
Myth # 1 Yeah, But There Are No Deals Out There The problem is not that there are no deals. You simply have to locate them. We are now in a booming buyers’ market with plenty of desperate homeowners looking for a buyer. In reality, there are so many deals that you have to actually try to not trip over one. Finding them is easy. Your job as a wholesaler is to cherry-pick, or only go after the best deals with the largest profit potential.
Myth # 2 Yeah, But Investors Aren’t Buying Wholesale Deals. These skeptics would have you believe investors aren’t interested in deals in a slow market; when in fact, investors know that this is the ideal time to take advantage of all of the opportunities that are out there. Investors never stop investing. They simply change their strategy – and in this market, they know to build in larger profits so they can be more conservative on the selling side of the transaction. The reality is that investors are not buying LOW QUALITY wholesale deals. Many wholesalers attempt to sell deals at low margins, and are surprised when buyers aren’t lining up to jump on these duds. At the Page | 16
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same time, I have clients who are reporting selling three wholesale deals every month with and average of $14,000 per deal. Do your math and that’s half a million dollars per year. If there is a profit to be made, investors are always interested. The deals are out there, as are the buyers. What you have to do is get a decent number of leads, sift through them, and find only the best, while also building a large national investor list.
Myth # 3 Yeah, But You Can’t Make That Kind of Money on a Wholesale Deal It is not that the skeptics can’t make that amount of money on deals; it’s that they don’t select profitable deals to wholesale. Many wholesalers will generate no more than one or two leads a month, and will be forced to accept a marginal deal with little profit left for the investor. These wholesalers are lucky to earn $500 to $1,000 IF they can sell the property at all. Dealers of low margin properties never do well. However, you can generate a flood of leads from great marketing, then you can pick and choose the best deals and make $8,000-$10,000 on a deal or more.
Fast Turn Profit Strategy # 1 The key to successful wholesaling is to attract a lot of leads. This should be your main priority. The more leads you attract, the more you profit. It is as simple as that. Without leads there are no profits.
Fast Turn Profit Strategy # 2 Implement a consistent marketing campaign that attracts hordes of leads. Let the marketing do the work for you. There is no sense in driving around town looking for deals when good marketing can drive them right to your desk.
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Fast Turn Profit Strategy # 3 Build a large list of investors. Keep building it. You can never say you have enough. There are never enough!
Consistent Marketing
Investor Buyer List
Huge Profit$
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CHAPTER 5 Motivated Sellers More than a real estate investor, a wholesaler is a problem solver. A wholesaler makes money by solving problems. Therefore, we need to find homeowners who have problems. We call these motivated sellers. The best deals come from motivated sellers who are not actively looking for a solution to their problem. They are overwhelmed and have thrown in the towel, willing to just wait and see what happens.
As we create our wholesaling empire we search where the other investors are not. We find the motivated sellers others don’t know about. We eliminate competition and create more profitable deals. The sellers we help are those who feel they have no other option. Although they “need” to sell, we give them what they truly want: “relief” from their situation. In other words, you will have more success discussing the relief you provide than you will discussing the sale of their home.
Many investors equate “motivated sellers” with pre-foreclosure. While this situation does certainly create more than a fair share of motivated sellers, there are many other events in homeowners’ lives from which they are desperate for relief. Here are some of the different motivating factors that create a situation where people would be willing to sell their house at a great discount, or with very favorable terms.
Pre-Foreclosures: Frankly, I do not specifically target homeowners who are facing foreclosure. Only because I find that my marketing dollars work better in other areas. The difference between the pre-foreclosure leads that I Page | 19
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pursue and the typical foreclosure prospects is that they are usually, what I call, “pre-pre-foreclosure”. In other words, they are receiving threatening letters from their lender, and they realize they are in trouble. However, official foreclosure action has yet to be taken. These prospects, therefore, are not being targeted by the competition simply because no one knows they exist. I am their sole solution.
Divorce: Before I did my first deal I wondered why – and “if” - divorce would be a motivating factor for homeowners to sell at a discount. I assumed the couple would delay pulling their equity out of property, but boy was I wrong. When I actually met my first divorcing couple I realized that their anger towards each other was so strong that they would each prefer to give up all their equity rather than allow the other to receive any proceeds from the sale. That’s no problem for us, right?
On a practical note, a house is often the asset that binds the couple together until it sells. Neither can afford to live in it alone. They certainly don’t want to live together. Both of their names appear on the loan, so their credit is at risk and they can’t afford to continue to pay the mortgage and live somewhere else as well. It’s a bad situation that can only be resolved through a sale – a quick sale! Do you see the value we offer a divorcing couple?
Probates: While it might seem that inheriting a house has financial benefits, what actually happens is that the heirs become stuck with the mortgage, taxes, maintenance, and repair. While at the same time facing inheritance taxes. All of these expenses start eating away at the liquid assets and threaten to wipe out the estate entirely if the house is Page | 20
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not sold. Add to that, that the heirs often live out of town,
and just want to get rid of the property. Landlords: Most landlords are not professionals and will at some point ask themselves “why” they ever became a landlord. They are sometimes faced with bad tenants that don’t take care of the property, or never pay rent on time. These landlords just want to get rid of this nuisance property and move on, which offers us an excellent opportunity for profit.
Old Houses: Many homeowners have lived in their homes for 20 years or more, and while they have paid down the mortgage, they have not re-invested into the property. When these homeowners decide to make a move, they often discover that the house will not sell in its current condition, and they do not have the means to complete the required repairs. They are “trapped” by their house and just need someone to buy it “as is” so they can move on.
Double Mortgages: Some homeowners’ lives have changed forcing them to move to another city quickly. This may happen for a variety of reasons, but unless they can sell their current house quickly, they face a double mortgage. After a few months of paying two mortgages they will do anything to be able to sell quickly.
There are many other motivating factors out there. I have met with people who just wanted to move on with their lives, and others who are senior citizens ready to move into assisted living homes. The reason for their motivation isn’t the important factor – it’s just that they ARE motivated.
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CHAPTER 6 Prospects – Leads – Deals
It is important to define these three important aspects of wholesaling, as many investors confuse prospects with leads and so one, yet still wonder why they have no deals.
A prospect, in a very broad sense, could be considered as any property owner. However, it is more specifically a property owner who is motivated to sell. Prospects are the pool for which you target your marketing efforts. Prospects are not leads. For example, if you receive a pre-foreclosure listing of 500 homeowners every month, these are not 500 leads. These are merely prospects to which you wish to market.
A lead is a prospect that has seen your marketing and has responded. These are people who take action to say they are interested and want to know more. Your goal will be to create an abundance of leads, which you will pre-qualify and cherry pick only the very best. This process takes no more than 5-10 minutes per call. Once you discover a hot lead that will produce a nice profit, you could spend up to an hour on the phone making sure that you secure the deal.
On an average, it takes about 20 leads to uncover one great deal. While it may seem like the odds are against you consider this: if you talk to 20 people over the course of a month, and spend just 5-10 minutes with each while making $8,000-$10,000 profit per, that doesn’t sound too bad does it? That’s like getting paid $2,400 an hour. If you are willing to do this then this is the business for you.
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By focusing on generating leads you can ensure consistency of results - or in every day lingo - paydays! Imagine your initial goal is to earn $16,000 a month. You’ll need to close two deals a month, which means on average you’ll need to talk to 40 leads – that’s just 1.3 per day. Instead of focusing on the $16,000, simply focus on generating the daily leads and the rest will come. Do not act like some of those crazy investors who chase properties they’re never going to buy. It’s a waste of time. Another other problem those investors have is that they usually only have two or three prospect properties a month, and think that’s enough to create a profitable business. Instead, let your marketing do the work for you, driving in an avalanche of leads from which you simply pick the best deals.
I feel I must make one disclaimer at this point: the reality of this business is that the “average wanna-be investor” makes absolutely no money wholesaling real estate. Why? It’s because the average person takes no initiative. Instead they dream and wish for success, while implementing nothing. However, with some consistent action on your part, you can make a significant amount of money. Take a moment now to commit to yourself that you will take action, that you will be successful, that you will create the life of your dreams for you and your family.
Let me remind you what I said early in this mandate. It is having the appropriate information; properly implemented that is the key to success in any business venture. Are you going to be like the “average wanna-be investor” who merely dreams of a different financial future; or are you committed to taking action and living life on your terms? The decision is yours.
You can create fast turn profits wholesaling real estate. It is both possible and probable to make $20-30,000 a month or more just contracting to buy and sell great deals. All you need to do is convert prospects into leads and leads into deals. Marketing is as important to real estate wholesaling as it is to any other business. Marketing does the work for you, finding great deals for creating fast turn profits. Page | 23
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CHAPTER 7 Harnessing the Internet
When I started in the real estate business in the early 1990s the Internet was in its infancy. Most people had no idea what it was or the incredible power that was available to anyone who knew how to harness it. Investors had no web presence. Communication with leads and prospects was done via snail mail (a.k.a. letters and post cards).
In the present day market place it is almost impossible to be in business without a web presence. The web has become the preferred information source for the majority of the population. A new restaurant opens and the first thing everyone does is check out their menu online. No online presence would dramatically reduce their clientele.
Most real estate investors have no brick and mortar storefront for customers to visit, so a web presence becomes that much more important. A website acts just like a storefront in providing both instant credibility, and a place for customers to gather more information. It also offers customers another vehicle for their choice of contact: phone or Internet.
Some customers will prefer to contact you by phone as to receive an immediate response. Others prefer to obtain more information without the direct contact of speaking to someone. The internet provides your customers an alternative method to learn more about you and your services. By having both a phone number and a website you are giving your customers the ability to choose. Either way this will be building a contact list for your leads. Visitors to your website Page | 24
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can be automatically added to your list via the auto-responder software that is installed. A website also offers you the added advantage of automatic advertising since it can be set on autopilot. No matter what time your customers visit your website they are interacting with your company without your involvement. You could be travelling around the world and your contact list will still be growing.
I recommend that you start with a squeeze page. A squeeze page is exactly what the name suggests, a page that squeezes information from the visitors of the site. This type of page offers visitors a download of some relevant free report, and all they are required to do is enter their name and email address. The “free report� is generally a 10-15 page paper about something that would be of interest to them. The report I use is how to sell your house fast, since motivated sellers are likely to be interested in that topic. This report provides them with some real strategies and tactics they can implement themselves; or they can choose the simplest strategy, which is to contact me for an offer on their house in the next 24 hours. This report serves two purposes: to build trust and credibility with the audience; and also to advertise the benefits of the service.
So why not create a full blown website and give them the entire sales pitch about how great you are and how you can help them? The reality is that visitors to a new website are likely to dedicate no more than 1-2 seconds before making a decision to continue surfing the web, unless something attracts their attention on your site. If they move on and you have not collected their contact information, they are gone forever.
Right from the beginning offer them something free; all they have to do is enter their contact information. Once you have the contact information you have a way to reach them on a regular basis at no cost via email. As soon as they submit their information, the report is Page | 25
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automatically made available along with a solicitation to buy their house. All the prospect needs to do is complete a simple web form and they’ll receive an offer on their home in 24 hours. If they accept and submit their information on the house they want to sell, great. If not, then the auto-responder software will continue to automatically send them preset emails, which builds trust and credibility and of course, continues to solicit to buy their house. If we had not captured their contact information at the first step, then all of this on-going, automatic, free marketing would be impossible.
The beauty of having a website is that you can attach an auto responder to the back of your squeeze page and let everything happen automatically without getting involved at any stage. Initially a series of marketing messages are loaded into the system where they are automatically sent to each prospect on a predetermined schedule. Every message is designed to build trust and to provide them an opportunity to fill out the web-form and get an offer on their house. Once completed these web-forms are sent to your email box for review. It can’t get any more automated or easier than that!
I also recommend having your incoming phone calls answered by a service, which will then transmit the lead information to you via email. Your email box will fill up with leads and you haven’t done a thing!
All you have to do is pre-qualify each of the leads by spending 5-10 minutes on the phone with them, and then select those that are potentially great deals. No sense in wasting a lot of time with leads that are not deals. If the lead is motivated and the numbers seem to work, then you can pursue further without wasting a lot of time.
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Building an Investor Buyers List Remember, you get paid only after you assign your contract to a buyer. You need to build a list of investors so that at least one or more of them are ready to buy your deal. Let us go over some ways that you can build that list.
Investor Associations and Clubs. You can work with your local real estate investors association (REIA). Check your local newspapers in the real estate section to see if they have a listing of where different groups meet. You can also go to the national REIA website at www.nationalreia.com or visit www.REIclub.com and although neither provides a complete list of all REIAs, they do have listings of groups around the country. Once you locate a local REIA, work with them to see how you can advertise to them and their investor buyers. Some ideas: speak at their monthly meetings; pass out flyers to all in attendance; place an ad in their newsletter; send a mailing to their list; or set up a table at the meetings for members to stop by and register for your list.
Mail to Multiple Property Owners. Get a list of everybody in your area who owns multiple properties. Anyone owning three or more is likely to be an investor.
Joint Venture with Other Wholesalers. Contact other wholesalers once you have a fair number of investors on your list. Offer to cross promote each other’s wholesale business.
Utilize the Internet. The easiest way of building a list of investors is to do it on the internet. Drive traffic to a squeeze page, which offers a free report, similar to the way we captured seller information. Obviously, this report will be on a topic relevant to the investor buyers. For instance, the report I offer is entitled: “How to Buy Wholesale Properties Without Taking a Bath”. I wrote this report when I realized that many Page | 27
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investors are wary of dealing with a wholesaler. This report has two functions: it teaches them how to evaluate the deals (so they will know that I have good deals); and it builds trust, since I am willing to share this information. The principle here is the same as with seller prospects: only request basic contact information to receive the report, then follow-up with a series of messages sent via the auto-responder to build rapport with investors.
With a list built online all you have to do once a wholesale property is available for sale is simply distribute a broadcast message and then drive interested prospects to a website which contains all of the information they need to make a buying decision. Most importantly, how they can make an offer on the property. With a decent size list, a profitable deal, and good marketing you should receive offers within 24-48 hours!
The driving principle should be to‌ Begin building an investor buyers list and never stop building it.
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CHAPTER 8 Conclusion To profitably wholesale real estate three things are required:
A market for motivated sellers A list of investors whom to send profitable deals which they can easily make offers on.
Efficient prequalification of leads and negotiation over the phone.
Profit Wholesaling real estate offers many benefits over traditional real estate investing:
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Wholesaling is a fantastic business with huge income potential and only part time hours. I realize that you may still question if it is truly a part time business. Here’s a break down of the ongoing required tasks, and their monthly time consumption based on a target of closing two deals a month.
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Marketing
Pre-negotiating
House Visits
•Allow roughly 19 hours for marketing. This includes the time required marketing for sellers and marketing to buyers on your investor list.
•16 hours is far more than enough time to prequalify leads and pre-negotiate on the phone on viable deals.
•12 hours a month will allow for 4 house visits to get 2 deals including travel time (assuming the prequalifying was completed as stated).
Negotiating with Buyers •This is a very simple negotiation because those offers are already coming in. Allocate 4 hours for these negotiations.
Attending Closings •Technically the wholesaler is not required to attend closings, however, it’s a good idea to be present to creatively resolve any last minute issues that could arise. Moreover, they are fun to attend because this is payday. Two closings a month will take about 7 hours.
Altogether this totals just 58 hours a month or 14 ½ hours per week. Even completing just 1 $8,000 deal per month translates into $96,000 per year or $1,846 per week. That’s not bad part time income, wouldn’t you agree? As you continue to grow your business your profits will also grow. Just two deals a month will earn you almost a quarter of a million dollars if you average $10,000 per deal. Considering the limited time and money resources required there is almost no limit to how much you can earn. You can wholesale many more than 2 houses per month, which means that your income can continue to grow. If wholesaling is not currently part of your real estate investing portfolio, you need to seriously consider adding this extremely profitable strategy.
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