Real Estate Wholesaling Basics

Module 1 - Introduction

Wholesale real estate is buying and selling real estate contracts, acting as an intermediary between sellers and buyers, usually investors.
Wholesalers contact owners of distressed properties and convince them to open a wholesale contract.
Goal setting:
- Find distressed property/distressed owner
- Make an offer on Property
- Sign a Purchase Agreement with the owner
- Find a Cash Buyer to pay more than what you have under contract for
- Close on the Property
- Collect Your Check
- Repeat two hours a day, 5 times a week

Real Estate Lingo

ARV: After Repair Value (how much a property is worth after it's completely renovated)
Comps: Comparable Sales (what are the comparable sales in the area)
Free & Clear: No debts, mortgage, or liens (A property that is paid off)
Turnkey: Property that requires no rehab and is move-in ready
Property Specialist: Someone to take pics of the property (makes you sound more professional)
Vacant: A property that has no one living in it
Occupied: A property that has someone living in it
Absentee Owner: Homeowner that does not live in the property they own
Pre-Foreclosures: Process has begun for property to be repossessed
Financial Partners: Our cash buyers
HUD 1/Closing Statement: Official document all properties receive when the sale of a property takes place

Sites We Will Be Using

Podio: Free forever
List Source: Will be used during the course
houseflipping9to5.com: Free 7-day trial
https://www.textmagic.com/: Will have to pay for, will be used during module

Property Types

Rowhomes
SFH (Single Family Home)
Condos
Townhomes

Neighborhood Class Types

A Class Neighborhood: Downtown area, high-paying jobs, average salary $100k+
B Class Neighborhood: Suburban areas, average salary $70-100k
C Class Neighborhood: Can be in the city or suburbs, average salary $40-70k
D Class Neighborhood: Low Income

Business Set Up

Create an LLC (incfile.com)
Business Email
Logo
Expensify (mobile app, business tax write-offs)
Google Apps - Docs, Sheets, Drive
CRM - Customer Relationship Management (Recommended: Podio.com)
Sign docs electronically (Hello sign, DocHub)
Separate phone number for business calls (Google Voice, GoDaddy, Sideline, CallRail)

Module 2 - Real Estate Calculations

Finding Comparable Sales

DO NOT COMPARE OVER HIGHWAYS
Find properties in the same neighborhood (preferable 3-6 blocks NOT ZIP CODES)
Same # of beds, baths, square footage, style of home
Year it was built
Aim for 3 comparable houses sold in the last 6 months
Always click both (MLS and public record)

Determining the After Repair Value (ARV)

Homeowner neighborhoods: Take the average of 3 comparable properties, choose comps close to the property
Rental neighborhoods: As-is comparable sales - no ARV, look for the lowest a cash buyer paid for

Estimating Repair Cost

Based on as-is conditions, look for similar properties in solid condition
Estimated repair cost based on property size and type of repair:
- Light: $10k - $30k
- Average: $25k - $55k
- Heavy: $50k - $100k

Module 3 - Finding Deals

Finding Hot Spots to Find Deals

Google address to see the property and area
Houseflipping9to5.com (propstream)
Redfin (free)
Zillow.com (free)
Realtor.com (free)
Trulia.com (free)

List Source: Steps to Finding Hot Zip Codes

Create your own list
City/state
Property type (Townhome, SFR)
Equity % (99/100%)
Last market sale date (Last 12 months)
Options tab (Absentee Owned)
Trustee-owned Properties (Exclude)
Corporate-owned Properties (No Preference)
Address Completeness Requirements (Both Mailing and Property address complete)

Module 4 - Motivated Sellers

Types of Motivated Sellers to Target

Code Violations
Evictions
Vacant
Expired Listings
Bankruptcy
Distressed Homeowners
Pre Foreclosures
Foreclosures
Inheritances
Divorce
Tax Delinquents
FSBO
Aged Homes
Aged Owners
Aged Homes with Aged Owners
Water Liens
Water Delinquents
Hospital Liens
Tax Liens
Irs Liens
HOA Liens
Pre Inheritances
Personal Representative Leads
Attorney Information
High Equity
Negative Equity
Free and Clear
Reverse Mortgage
New Homeowners Leads
Reo / Bank-owned Leads
Absentee
Municipal Liens
Multifamily Leads
Cash Buyers
Permit Violations List
Bored Investor Leads

Module 5 - Talking to Sellers / Negotiating

Four Pillars to Cold Calling

Motivation
Timeline
Condition of property
Seller’s Price

The Benefits You Provide

We buy All Cash
We Buy in As-is Condition
We Pay All Closing Costs
There are no realtor fees or commission fees
We can close as little as 14 days

Module 6 - Cash Buyers

Types of Cash Buyers

Buyers who use cash
Buyers who use private money or hard money (financing)

Finding Cash Buyers to Buy Your Properties

Affordablehousing.com
Houseflipping9to5.com
Facebook marketplace: Real Estate Groups
Realtors
Live Auctions
Bandit Signs
REIAs (Real Estate Investors Association)
Partner up with other more experienced Wholesalers (jv)
Opencorporates (For LLCs)
Cashbuyersplus.com### Negotiating with Cash Buyers
When dealing with a cash buyer who needs more time to close, request more earnest money than usual.

Understanding Cash Buyers

Important questions to ask cash buyers include:
- What types of properties are they looking to buy?
- What location are they interested in?
- What is their target price range?
- Are they using cash or private money for the purchase?

Contracts in Real Estate

A Contract of Sale is between the seller and the buyer (you).
An Assignment Agreement is between you and the end buyer (cash buyer), assigning your rights to the contract.
Having a contract with the seller gives you equitable interest in the property, meaning the seller cannot sell to anyone else.
When speaking with sellers, use "Agreement" instead of "Contract".

Building a Dream Team

A Virtual Assistant (VA) can be hired to cold call and qualify leads for you.
Websites like Upwork and intergriapartners.com/mit-smith can be used to find and hire cheap labor for your business.
Job postings should include details such as:
- Job title: Real Estate Cold Caller (Lead Generation)
- Skills required: cold calling, lead generation, scheduling, data entry, sales, and outbound sales
- Industry: real estate
- Duration: 3-6 months
- Skill level: Intermediate
- Hourly range: $3-$7 per hour
- Job description: making 200 calls per day, 5 days a week, with a provided script

Training Virtual Assistants

Role-playing with VAs helps meet expectations and improves performance.
Screencast-o-matic can be used to record tasks, allowing VAs to study and learn.
Bi-weekly or monthly meetings help build rapport and a culture of teamwork.
Providing bonuses when deals are closed motivates VAs.
Paying VAs on time is essential.

Daily Communication with VAs

WhatsApp and Slack can be used for daily communication with VAs.

Challenges with Virtual Assistants

Time differences can be a challenge, especially if VAs are located in the Philippines (12-hour difference).
Adverse weather conditions can impact VAs' internet connectivity.
Cultural differences and American conversational norms can cause misunderstandings.
English-speaking skills can be a challenge for some VAs.
Training and role-playing with VAs can help overcome these challenges.