What am i missing? (wholesaling) - Posted by carson

Real Estate Investing
1

Posted by Joe Kaiser on March 17, 2006 at 01:14:35:

Ugh, no.

You pick one thing, and you become expert at that one thing.

Having a dozen generalized approaches results in knowing very little
about lots of things, and that never works.

Pick one thing and get it sorted out. With one thing, you can really dig
deep and get to a level of understanding exceeding 99% of your
competition who are out there doing your list thing.

The big secret?

Learn more and more about less and less until you know absolutely
everything about nothing and nothing about everything . . . and then
take one step back.

Where do you want to start?

What gets you juiced?

Joe

2

What am i missing? (wholesaling) - Posted by carson

Posted by carson on March 15, 2006 at 16:19:07:

I?m trying to set everything up so I can be ready when I find a house/seller to wholesale.

-I have an add in the paper looking for buyers

-I have a list of hard money lenders I can contact to fund my buyers and give me an prequalification letter for MLS offers (hopefully, read below)

-I have MLS access so I can start making offers on REOs and the like.

-I?m fairly confident I can make offers that will profit me and a buyer (ARVs, comps, etc.)

Now a couple problems/questions

-I don?t have hardly any money or a regular income so will I even be able to get a prequalification letter from a HML? (I do have pretty good credit)

-If worse comes to worse and I can?t find a buyer, would a HML loan me everything and role it into the note (points, closing costs, etc.)? Keep in mind I DO NOT have a regular income. I could borrow the $$$ for monthly payments but would that help me at all for the HML?

-I?ve yet to be to a REI meeting to network so I don?t have an attorney or anything that knows REI. Should I hold out on making offers until I know some other “team” members that ill need for wholesaling?

3

Re: What am i missing? (wholesaling) - Posted by Chris in FL

Posted by Chris in FL on March 16, 2006 at 13:53:37:

Carson, If I am not mistaken, I think Joe Kaiser sells courses on REI… Seems like I have seen his name? Regardless, I am going to disagree with him anyhow. You know enough already to get your feet wet. The fact is, some people spend countless thousands of dollars and hours studying, only to find out they don’t “have what it takes” to do REI. Finding bargains, knowing what to do with them, and acting takes a certain something a lot of people don’t have. Before studying much more, find out if you “have what it takes”. Here is a great plan for you from someone that knows - you decide whether to take it or leave it:
First, find bargains (can find bargains in RE, can make $ in RE; no can find bargains, no make $). If you can find a bargain, you are 90% of the way to success. Second, joining a local REIA would probably be an excellent idea for several reasons, but not completely necessary. Third, easiest way for beginner with little experience, credentials, or money to make money: find bargain, put contract on bargain (longer time until closing the better), and wholesale bargain to experienced investor (you assign the contract, without ever closing yourself). When you wholesale in this manner, which will be very easy to do if you truly have a bargain, ask your investor/buyer if they will tell you what they plan to do (when/how/why/what regarding financing, rehabbing, exit strategy, etc.) and learn. Do a few of these, and you will start to have some money and knowledge, so you can move on to something more risky (if you choose to). The most experienced and wealthy investor I know spends 95% of his investing time and energy wholesaling (does approx. 50-60 houses a year, averaging at least $15k/deal). One thing to beware of - if you want to eventually buy and hold, you may need to do wholesale/flips in a tax entity. IRS says an individual who flips is not allowed the tax advantages of a long-term, buy-and-hold investor (such as depreciation, exchanging properties, owner financing without paying taxes on the sale immediately, etc.). Hope this helps. Good luck!

4

Couple things . . . - Posted by Joe Kaiser

Posted by Joe Kaiser on March 15, 2006 at 22:09:55:

Good start, but missing a couple things - experience, which will come
in time, and you need a game plan.

A-Z.

Yes, I know that doesn’t mean a lot when you’re just sort of feeling
your way through in the beginning stages, but it makes sense to really
get all the pieces down on paper so you can have a pretty good map to
follow. With that in place, you can make sure you get all the pieces
you’ll need to get you to the end part where you get paid.

You said “I’m fairly confident I can make offers that will profit . . .”

Not nearly good enough, Carson. “Fairly confident” are not cards I’d be
playing. I’d need to know in my gut that my plan is a flat out winner
before I really put things into action.

Besides, you must know that there are hundreds of local players
working the “making offers on REO’s and the like” angle, all of which
have more experience and most likely, more resources than you.

How are you going to compete?

Pretty tough, I think.

It’s a great start and just doing something puts you way ahead of most,
but you still have a couple things to consider, with the big one being a
plan of attack that flat out rocks.

Joe

5

Agreed . . . - Posted by Joe Kaiser

Posted by Joe Kaiser on March 17, 2006 at 01:22:26:

I suspect you missed the point. I’m not suggesting additional studying,
I’m suggesting the first thing you do when you get to work is define a
game plan.

Doing it any other way is not advisable.

If you know enough to get your feet wet, you know enough to design a
plan of attack that addresses all known issues and how you’ll handle
them.

Joe

6

Re: What am i missing? (wholesaling) - Posted by carson

Posted by carson on March 16, 2006 at 14:47:00:

Thanks for your comments. I do believe im ready to jump in and I sure am sick of not doing anything!

I have MLS access so I can find deals, but i need a prequalification letter for REOs and such. After i figure out the financial end for incase i cant wholesale it, i think Ill be OK.

Then after a couple deals ill start worrying about starting a LLC or some corp for tax reasons.

Then I guess the last thing would be setting up a “team” to help me out with everything… I guess Ill have to talk with some buyers and see who they use.

7

Re: Couple things . . . - Posted by carson

Posted by carson on March 16, 2006 at 10:31:57:

A game plan for making offers, or a game plan for “getting started”?

Pre game
-find buyers to wholesale or birddog to

-find HMLs to finance them and my self if needed.

-Start looking at properties in my area to get a feel for things

Mean while, look for other “team” members who know REI and attend meetings

Kickoff
-Look at REOs, HUDs, and other rough properties on MLS and make offers. Also drive my area looking for beat down homes and find the owners to see if theyre interested in selling.

-Make offers using 70% ARV discount for buyers (the one I?ve talked to), minus repairs, minus my profit, and minus a good chunk of “I?m a newbie so just in case” money.

-Find comps straight off the MLS

Halftime
-After negotiations are done and the offer is accepted, call buyers to see if they?re interested. If not?

-place adds in local papers for buyers

-After a buyer is found I will make sure his/her finances are in order otherwise send them to a good HML so we don?t have any issues at closing.

-If there is an issue to where the buyer will not be able to close, and I cant find anyone else, I will try my darndest to get a HML to finance me and I will rehab it.

-Keep up with everything so there are no problems before closing

-Close

Post game
-Do it all over again!