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Wholesaling Real Estate

PART -3

By: SOUAD MEHDOUN

COMMON MOTIVATION

FINANCIAL DISTRESS

  • Foreclosure
  • Bankruptcy
  • Loss of Employment
  • Property Tax Lien
  • Judgment
  • Back Property Taxes
  • Child Support Issue
  • Can’t Afford Payments
  • Needs Cash ASAP

PHYSICAL DISTRESS

  • Property Boarded Up
  • Code Violations
  • Fire Damage
  • Trashed Rental
  • Water Damage
  • Abandon
  • Vacant

CIRCUMSTANTIAL DISTRESS:

  • Divorce
  • Seller in Jail
  • Transferred
  • Rental Vacancy
  • Age (Elderly)
  • Inheritance
  • Probate
  • Liquidation
  • Want to Downsize
  • Death in the Family
  • Bad Investment

HOMEOWNER PRE QUALIFIER

COLD CALLING SCRIPT

INTRO

“Hey ____ this is Souad from Direct Buyers Nationwide (you can say “ i’m a local investor in the area) . I was calling about your property on ________. Just wanted to know if you were interested in selling it

REBUTTAL

IF THEY SAY YES: Move right into collecting info and going into your normal scripting.

IF THEY SAY NO: Do you have any other properties you might be interested in selling?

IF THEY SAY NO: OK no worries, we won’t call again. ( make sure not to call again )

PROBE

“Great! So the whole purpose of this call is to get some info about the property so we can make an offer.
Do you have about 5 minutes so I can ask you some quick questions about your property?
  • What’s the general condition of the house?
  • Are there any repairs that need to be done?
    • If yes, what are they?
  • Have you made any improvements to the property?
  • How long have you owned the property?
  • Do you live in the house or is it a rental?
    • If it’s a rental, what is it currently renting for?
  • Is the property currently listed with a realtor?
    “Are there any other properties you’d consider selling?”

    IF YES: Repeat Process

CLOSE

Awesome, a little bit about us, we’re local in _____ and buy properties all cash, no fees, no real estate agents, or inspections.

The check that we write is the check you take home.”
SAMPLE CLOSES
TIMELINE:
“If everything makes sense, how soon would you like to sell?”
AMOUNT OWED:
“If we buy the property will we need to pay off any taxes, liens, or a mortgage?” “If so do you have a rough idea of how much?”

AMOUNT OWED:
“Knowing that there are no real estate agent commissions, we cover all fees, and we pay in cash, do you have an idea on the money you’d want to walk away with?”

 

“You know this sounds like a property we will likely want to make an offer on, I’m going to take everything you told me to my manager. We will evaluate it all and call you back.

When would be a good time tomorrow to reach out?

MAKING AN OFFER

CALCULATE THE VALUE ( AS-IS & ARV )

COMPS

Comparable homes, or “comps,” are properties that are similar in size, condition, and location to the property you’re interested in.
Here are some steps to finding comparable homes:
  • Determine the property’s location and characteristics, such as square footage, number of bedrooms and bathrooms, and any unique features.
  • Search for recently sold properties in the area that have similar characteristics to the property you’re interested in.
  • Analyze the sold properties to determine their market value and how they compare to the property you’re interested in.
  • Consider the Property’s Condition: Evaluate the condition of the property, including any repairs or upgrades needed. This can affect the property’s value and can be factored into the final estimate.
  • Consider the Market Conditions: The current state of the real estate market can also affect the as-is value of a property. If the market is strong and there is high demand for properties in the area, the as-is value may be higher than in a weak market with low demand.
  • ARV: Look for other remodeled or recently built homes that follow similar characteristics as yours

HOUSE 1 + HOUSE 2 + HOUSE 3 = GROSS VALUE / 3 = AVG PRICE

+ or - $5,000 to $10,000 for Features

  • $5,000 – Bathrooms, Dens, Attics, Extra Rooms
  • $10,000 – Bedrooms, Basement, Driveway, Garage

CALCULATING REHAB COSTS

HOW TO CALCULATE REHAB COSTS

Comparable homes, or “comps,” are properties that are similar in size, condition, and location to the property you’re interested in.
  • Inspect the Property: Walk through the property and make a detailed list of all the repairs and renovations that need to be done. This may include cosmetic upgrades such as painting and flooring, as well as major repairs such as plumbing, electrical, and structural work.
  • Get Contractor Estimates: Once you have a list of the necessary repairs and upgrades, get quotes from licensed and insured contractors for each of the items on your list. Make sure to get multiple quotes to ensure you’re getting a fair price.
  • Add Contingency: It’s a good idea to add a contingency of 10-20% to the total estimated cost of the rehab to account for unexpected expenses that may arise during the renovation process.

Remember, accurate rehab cost estimates are essential for a successful fix and flip project. Be thorough in your inspection and get multiple quotes from contractors to ensure you’re getting a fair price for the necessary repairs and upgrades.

House SQFT = 1,000 x $20/ sqft = $20,000 REHAB BUDGET

House SQFT = 1,000 x $20/ sqft = $20,000 REHAB BUDGET

CALCULATE AN OFFER

HOW TO CALCULATE A FAIR OFFER

Making a fair cash offer to a seller is important for several reasons:
  • Builds Trust: Walk through the property and make a detailed list of all the repairs and renovations that need to be done. This may include cosmetic upgrades such as painting and flooring, as well as major repairs such as plumbing, electrical, and structural work.
  • Increases Chance of Acceptance: A fair cash offer increases the chance that the seller will accept your offer over other potential buyers. If the seller receives multiple offers, a fair cash offer will stand out and make your offer more attractive.
  • Saves Time and Money: By making a fair cash offer, you reduce the chances of negotiations and counteroffers. This can save both you and the seller time and money in legal and negotiation fees.

600K x 70% = 420k - 40k - 30k = 350k

Our Offer : $325 Negotiated to 350K

DOING YOUR HOMEWORK

RESEARCH YOUR MARKET

Before starting negotiations, research the local real estate market to identify areas where properties are selling quickly and where there is high demand from buyers.

ANALYZE THE PROPERTY

Analyze the property to determine its potential value, repair costs, and other factors that could affect the sale. This will help you to determine a fair offer price.

MAKE AN OFFER

Once you have determined a fair offer price, make an offer to the seller. Your offer should be based on the property’s potential value, repair costs, and other relevant factors.

SHOW VALUE

Provide evidence and justify the offer: Provide evidence to the homeowner that justifies your low offer, such as the property’s condition or the market demand. Be clear about the benefits of a quick and easy transaction without commissions and fees.

COUNTER OFFER

Listen to the homeowner’s counteroffer: The homeowner may counter your offer with a higher price or different terms. Listen carefully to their counteroffer and decide whether to accept, reject or make a counteroffer of your own.

NEGOTIATE TERMS

Negotiate the terms of the purchase, including the price, closing costs, and any contingencies. Be clear about what you want and be willing to compromise on some points to reach a mutually beneficial agreement.

WHOLESALING CONTRACTS - A TO B

YOUR OFFER COMPONENTS

  1. PURCHASE CONTRACT WITH THE RIGHT LEGAL LANGUAGE
  2. DEPOSIT or GOOD FAITH EARNEST DEPOSIT IN ATTORNEYS ACCOUNT
  3. PROOF OF FUNDS FROM HARD MONEY LENDER
DocuSign is a great way to save time via electronic signature. If you have to meet with the seller, request to meet at the property to inspect with a contract in hand. Otherwise, electronic signatures are the fastest and most efficient way to send and receive contracts. This also is the easiest way to get contracts to the title company fast to start the close. Docusign is very user friendly.
If you or your seller is uncomfortable with signing electronically, then you can easily print the contract and mail or meet with the seller.
LINK TO CONTRACTS

TIME TO SELL YOUR CONTRACT

TAKE PHOTOS

The more the better! Try to get at least 5 really good images that you can use for marketing the property.

  • Front exterior (don’t forget the driveway)
  • Back exterior
  • Kitchen
  • Bathroom
  • Basement/ Attack

These 5 images will be perfect for a Property Analysis! The backyard along with sheds, porches, guest houses, or any other additions built onto the property will help a lot when presenting properties to investors.

MARKETING YOUR CONTACT

Hopefully you got pictures during your inspection. If you are wholesaling virtually you can ask owner to take pictures for you . If property is vacant you would need to hire someone on facebook (boots on the ground) to take some photos for you .

This will save you and the investor time on making a trip in case they are not interested. I utilize Google Drive to store my pictures. Google Drive offers a free way to store and share with your investors via email.

FIND CASH BUYERS

Attend real estate networking events: Attend local real estate networking events and meetups to connect with cash buyers in your area. These events are a great opportunity to network with investors who are actively looking for investment opportunities.

Join real estate investment groups: Join online real estate investment groups on platforms like Facebook and LinkedIn to connect with cash buyers. You can also join local investment clubs to network with other real estate investors.

Build a buyer’s list: Create a list of cash buyers by reaching out to real estate agents, property management companies, and other real estate investors in your area. You can also use online tools like ListSource or PropStream to find potential buyers.

Use social media: Use social media platforms like Instagram, Twitter, and Facebook to reach out to potential buyers. You can also post about your wholesale deals and ask your followers to share your posts with their network.

Advertise on real estate websites: Advertise your wholesale deals on real estate websites like Zillow, Redfin, and Trulia to attract potential buyers.

Email Blasts:
Email blasts can be a highly effective tool for real estate wholesalers when searching for an end buyer. With an email blast, wholesalers can reach out to a large number of potential buyers at once, without the need for individual outreach. Additionally, email blasts can be a cost-effective way to market a property, especially compared to other advertising methods such as print or online ads.
Also Use:
Craigslist, LinkedIn, FB Marketplace, RE Agents, Bigger Pockets

QUALIFY & ACCEPT

90% of “CASH” buyers end up getting a HARD MONEY LOAN

Qualifying an end buyer through a hard money lender before accepting their offer can be a smart strategy for real estate wholesalers. This process involves evaluating the financial capability of the end buyer, as well as their experience in real estate investing. A hard money lender can be a valuable resource for this task, as they are typically focused on providing loans for real estate investments and have a good understanding of the risks and rewards involved.

By requiring potential buyers to go through a hard money lender, wholesalers can help ensure that the buyer has the necessary financing to complete the transaction.
In addition to evaluating the buyer’s financial capability, wholesalers can also gain insights into their experience in real estate investing by working with a hard money lender. Experienced investors are generally more likely to have a track record of successful transactions and a good understanding of the market, which can provide additional assurance for the wholesaler.

TITLE COMPANIES

When wholesaling real estate, it’s important to work with a closing and title company that is familiar with the process and can help ensure a smooth transaction.
An investor-friendly title company understands the unique needs of real estate investors and can provide specialized services such as double closings, assignments, and transactional funding.

They can also help investors navigate the legal and regulatory requirements of wholesaling.

In addition to providing specialized services, an investor-friendly title company can also help investors save time and money by streamlining the closing process and reducing closing costs.
It’s important for wholesalers to build a strong relationship with a reliable and investor-friendly title company to ensure successful transactions and repeat business.

CLOSING DATE

Be prepared: Make sure you have all the necessary documents and paperwork ready before the closing day. This can include the purchase agreement, assignment contract, title report, and any other relevant paperwork.
Communicate with all parties: Stay in touch with the seller, buyer, and any other parties involved in the deal to ensure everyone is on the same page and there are no surprises on closing day.
Confirm details: Confirm the time, location, and any other details of the closing with all parties involved.
Bring your ID and any necessary funds: Make sure you have a valid ID and any funds required for the deal, such as earnest money or closing costs.
Review documents: Take the time to review all the documents you’ll be signing before the closing to make sure everything is in order.
Follow up after closing: Stay in touch with the buyer and seller after the closing to ensure a smooth transition of ownership.

WHOLESALING CONTRACTS - B TO C

YOUR ASSIGNMENT CONTRACT COMPONENTS

  1. PURCHASE CONTRACT WITH THE RIGHT LEGAL LANGUAGE
  2. DEPOSIT or GOOD FAITH EARNEST DEPOSIT IN ATTORNEYS ACCOUNT
  3. PROOF OF FUNDS FROM HARD MONEY LENDER
LINK TO CONTRACTS

THANK YOU

It was a pleasure to have the opportunity to share my insights and expertise with you. I appreciate your attention and interest in the potential of this investment opportunity.
Please do not hesitate to reach out if you have any further questions or if you would like to explore this opportunity further.
I look forward to the possibility of working with you in the future.

I look forward to the possibility of working with you in the future.

 Thank you again for your time and consideration.

https://wholesalediscord.com
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Facebook Instagram Linkedin Tiktok Twitter Yelp Youtube

REINVESTOOLS.COM

(732) 200-7480

Privacy Policy

Copyright © 2023 – All Rights Reserved.

Facebook Instagram Linkedin Tiktok Twitter Yelp Youtube