All right, you decided that you want to wholesale houses for instant cash. In fact, you’re down the road on the learning curve and you’ve done all the homework by having a strong buyers list already established. In fact, your specific marketing for wholesale deals is paying off and you’re not only getting leads but offers that are getting accepted!

Now you just need to solidify that buyer contract and a BIG paycheck with your name on it is right around the corner. Let me be very, very frank with you and state that wholesaling properties is like being in the middle without being squashed! You’re negotiating with both sides and most probably your buyer and seller would not need your assistance if they could get together in the first place but that is your job to facilitate the transaction while having a vested monetary interest in the property initially.

Moving right along here it is time now to get that buyer contract and initiate the closing process. The next question I ask you is the entire meaning of this subject and it can be quite delicate and may blow your entire deal:

How are you going to get your buyer into the property to look at it?

In my wholesale deals first off I simply don’t make offers that I know absolutely would not work. By ‘work’ means even in worst-case scenario I would be able to close with a hard-money lender if my wholesale buyer disappeared off the face of the earth within a matter of days. Even though I have that no-brainer deal my wholesale buyers want to SEE the property. Only a fool would buy the property needing major repairs sight unseen…..well, that is except for my few core group of buyers who I’ve wholesaled numerous properties to and they just want me to fax them the contract and that my friend is called a relationship and another story.

Now your buyer wants to view the property just to make sure it meets their buying criteria and you can’t blame them.

Do you have access to the property to show your buyer the inside?

If you don’t, then put it in reverse and let’s back up to how you negotiated the deal. On ALL of my properties that I wholesale I will insert a clause similar to this:

“Access to property shall be granted to Buyer(s) with a key, solely for the purposes of showing property to interested parties pertinent to this agreement inclusive of Buyer(s)’s partners, contractors, property inspectors, and lenders.”

It has rarely been a situation for me that a seller balks at granting that stipulation. You ask why and the answer is my sellers are MOTIVATED! If they are accepting my offer making it a no-brainer can’t lose deal then giving me a key to access the property is usually very minor. However, at times this can be an issue.

If your seller just won’t relent, then you have a few options and one of them is to simply walk away. My personal opinion is it would be the ethical thing to do rather than to accept the contract without access to show your buyers. In all probability you may not secure a buyer since they can’t see the inside and thus not close on the deal opening up yourself for non-performance contract issues.

The other option is to be very up-front with the seller and say something like the following:

“‘Mr. Doe I can certainly respect you wanting to be there at the property any time I need to access it. I simply can not amend my contract offer without access as my time is valuable like yours and the professional advisement on this property makes it absolutely necessary for me to have access at my convenience. However, I am associated with many other investors and if you would allow me an option to buy the property under the remaining price and terms of our contract then I would be glad to pursue this further.”

Lastly, as a wholesaler you will have MLS properties through Realtors in which you can locate some real gems. I deal mostly with independent sellers just because of the flexibility, however I do some deals with Realtors and it is a much different ballgame when wholesaling properties.

The true fact of the matter is that a significant number of Realtors are not that receptive to you wholesaling deals while you make a few thousand and they make a few hundred. I know there are many out there that may disagree wtih that statement, but after doing deals in this scenario I’ve had Realtors starting to deal directly with my buyers and/or doing the deals themselves. Nothing really unethical in my feeling on that as I don’t have the only license to be the only wholesaler in my county (smile!).

The most important issue with that is that any reputable Realtor should not give you a key, lock box code, or any other access to a property….unless you’re another licensed Realtor. That would be a total violation of their code of conduct and matter of law without the written permission of the owner. What if he/she does give you a key and in the midst of showing the property you forget to re-lock the back door and in the night someone comes in and vandalizes the house? What’s going to happen then? This is a worst-case scenario example but serious issues to consider.

I simply do not know another way to deal with MLS properties that when you tie the deal the listing Realtors needs to know that you are wholesaling before hand AND they to be available to let your buyers in to look at it. If you do not address that situation contractually with your Realtor, then you may be setting yourself up for failure and/or legal consequences for non-performance or forfeiture of earnest money.

Just in closing, my hope is that you earnestly think ahead of the situation on how to get your buyer access into the property while you have it under contract. There are many situations of ethics that will arise continually around this issue and you will have to address them personally on the level of integrity in the way you want to run your wholesaling business. Make no doubt though….once you get the green light ‘GO’ having that deal tied up at a great price and the key to the castle, then truly that big check with your name on it for all intense purposes is already in your pocket. Think through the obstacles that potentially could keep you from a profit and have a ‘gameplan’ to address those issues.

Let’s start out clarifying a few points about ‘short term’ investing and ‘long term’ investing. First, understand that wholesaling and ‘flipping’ houses are for short term activities. Traditionally, when we think of real estate investing, we envision someone buying a property and holding the property for the long term.

In this ‘traditional’ buying situation, the investor would find a good and well maintained property sold through a real estate agent, borrow the money from a bank to fund the purchase and then hold the property for a number of years. The property might have rental income and certainly over time would increase in value. At the end of perhaps 10, 20 or 30 years, the true investor has a property that has appreciated in value and maybe even paid off. This is a long term real estate investor.

To the contrary, what we will be teaching you in this program is quite different. From this point forward we are not going to use the term investor to describe the short term buyer and seller of real estate. We will call the short term buyer and seller a ‘real estate entrepreneur’. Thus, one involved in the short term buying and selling of real estate is in essence, building a true business, a business which supplies others in the real estate industry with an inventory of properties. For example, unlike the long term real estate investor:

1) The short term buyer may never obtain a loan on the property

2) The short term buyer may or may not perform repairs on a property

3) The short term buyer’s total investment in the property may be only $50 to $100 and their return might be 50 times this amount

4) The short term buyer may hold only a contract to buy the property and may sell or ‘assign’ this contract to another investor for a profit of $3,000 to $5,000 in 1 week

5) The short term buyer won’t always use a real estate agent and in many instances will buy the property from someone who is ‘motivated’ to sell

6) The short term buyer might buy a property that needs repairs and may spend months coordinating such repairs, and then sell the property

7) The short term buyer might learn about the property from a beginning investor and not a trained real estate agent

The short term buyer does not rely on market appreciation. They rely on ‘buying correctly’ at the right price and under a very specific set of conditions

As you can see, there are some significant differences. The first of which is that the property is generally being sold quickly (i.e., in less than a year in most instances). Also, you might notice that the short term buyer may never obtain a loan in order to purchase the property. The short term buyer may only invest $50 to $100 in the property and then ‘assign’ or ‘sell’ their rights to the property for $3,000 to $5,000.

My purpose for introducing these 7 fundamental differences is to change how you think of this process. The short term buying and selling of real estate is without question more aptly a business activity than an investment activity. Take a moment and think about any successful business that you know. As you can imagine, there are numerous parties and players in such a business.

Do you want to earn an extra $5,000 next month? No really, I mean it. Of course you do!

Flipping or Wholesaling is the way to do it. It’s fast, fun, and easy. First, let’s determine what wholesaling actually is. Some folks consider buying a house, rehabbing it, and selling it quickly wholesaling. Others consider buying a house and reselling it without doing any work on it, wholesaling.

To us, wholesaling is making money on a house you never own. Never owning the property is the key to successful wholesaling. “How do you do that?” you wonder.

That is our topic this month, making money on houses you NEVER own. The first step is finding a property that has sufficient equity. Try to find a property still owned by the homeowner and get it under contract. Work it out so that you have 30 to 60 days to close. Be sure to place the words “and/or assigns” after your name on the contract. Give a small deposit (we typically offer a$10.00 deposit) to secure the property and get to work.

Run an ad in the “houses for sale” section of the paper. Use key words like “handy”, “investor special”, “needs work”, “distressed”, and “must sell”. You will get hundreds of calls. Be sure to get the name and number of each caller so that you can call them with your next house as well. If the house is a good deal with plenty of equity, one of these buyers will want it.

You have your buyer… what next? Assign your contract to the new buyer, who, in turn, closes in your place. It breaks down like this — You placed the property under contract (with the words “and/or assigns” next to your name) for $45,000. You found a buyer and assigned your contract to him for $50,000. He then comes to closing and buys the house.

The original homeowner receives his $45,000 and you receive your $5,000 assignment fee. You just made $5,000 and all you invested was $10.00 for a deposit and some time answering the phone. Your buyer rehabs it and sells it for $80,000. Everyone is happy.

Some of you might be wondering, “Why make $5,000 on a wholesale when I can make $20,000 on a rehab?” It’s basically a matter of personal preference and, of course, your financial situation. You might not have enough cash to rehab a property, but you have $10.00 for a deposit and plenty of free time. No matter which path you take, it’s win/win for everyone!

It’s so funny. At least once a day someone walks up to me, says hello, and then with a pseudo-sorrowful look on their face and a hand on my shoulder as if my mother just died in a fiery car crash asks how I’m doing in real estate. When I reply that I’m doing awesome and it couldn’t be better they look shocked for some strange reason.

“Really?” They exclaim. “Wow! That’s great. Good for you.” They look a little perplexed, and then they walk away tapping on their cell phones. I’m not sure what all the tapping is about. I heard *666 is the auto text alert to the FTC so I suppose they’re reporting suspicious activity.

The fact is these fine friends of mine have reason to be suspect. The market sucks! Why the heck would I be doing so good? Even I was a little surprised this past week sitting in my good friend Kenny Rushing’s office listening to him tell me that he’s currently making more money than ever in real estate. And for those of you who don’t know Kenny…that’s a lot of money. You wouldn’t believe me if I told you.

“That doesn’t make any sense” I thought. “I’m supposed to be the only one making it big in the 2008 real estate market.” But then it hit me: It’s not just me (as hard as that was to swallow); it’s my particular niche in the real estate industry.

Wholesaling.

Wholesalers make the world go around. That’s just a little Snapple Fun Fact for you in case you didn’t know. We find and negotiate all the good deals, we make all the connections, we make all the money, we get all the girls, and we work at least a full 15 hour “work” week (if you really wanna call it work). What can I say? It’s a tough job, but someone’s got to do it.

I recently spoke at a big Century 21 Realtor meeting. I was there to discuss how my buying strategies could assist them in their efforts to sell more houses in this “down” market. They all ended up calling me afterward but not for help with their listings; they wanted to sign up in my coaching program! Hilarious. I think I single-handedly put that whole office out of business. Apparently in this particular economy we find ourselves in, these folks saw something in “wholesaling” that made more sense to them than “retailing”.

STOP! Drop and roll. Because you’re about to be on fire after you hear what I have to say next. Prepare yourself for an insider tip that will revolutionize the rest of your life here on earth. I’m serious. Pay special attention here because this one thing I am about to tell you is absolutely critical, and you’ve never heard it before. It is responsible for my success and happiness to a large extent. To the degree you don’t listen, appreciate, and apply this to your life you will most certainly be completely miserable.

Actually…put that thought on hold. Let’s get back to that later. I won’t forget; I promise. First I should explain what wholesaling is in relation to all the other options you have available to you in the marvelous and magical land of real estate. Here is a brief definition and synopsis of the different arenas you can choose from:

The Landlord Find and buy houses that cash flow with a renter living there and manage them for eternity. Have fun. You’ll get rich…in approximately 30 years. My friends and I drive 745’s and Bentleys and live like famous people (because we are). You see any landlords doing that? I wrote almost a whole chapter on this subject in my new book Flip Your Way to Financial Freedom. It’s hilarious. You definitely have to read it. You’ll be entertained if nothing else. If you want passive income do something like write a book, start an online business, or do network marketing.

Want something to provide an income for you once you retire? First of all, who in the world wants to retire? And do what? Eat right and exercise and you’ll never be helpless and sick in a nursing home (which would require lots of assets to pay for). Second of all, get a whole life insurance policy and plan your retirement around it. It all comes out tax free and it’s the smartest way to transfer wealth to your family.

All the truly elite financial planners know this (Merrill Lynch, Fidelity, and Morgan Stanley are not examples of elite financial planners just in case you were wondering. Stop listening to Suze Orman and anyone else on TV or in a magazine for that matter if you have any hopes at all of being free and wealthy). Contact me and I can steer you in the right direction for all that.

Of course I’m over-exaggerating everything in order to make my case for wholesaling. Investment properties aren’t all bad. I have a few. It’s cool to pick up some rentals here and there if they make sense, but you need a way to produce cash flow. A lot of it. In other words, landlording is ok for long term investments, but you need to make a living in the mean time.

The Rehabber I’m reluctant to discourage you on this one because rehabbers buy all my wholesale deals. So go ahead and be a rehabber. To each their own. Just make sure you plan on selling at least 10% below market to ensure your house sells. And plan on completely renovating at least 4 houses a month to make as much as I do talking on the phone at Starbucks and typing. Enjoy the heart attack.

The Realtor LOL Dude. Please. This is a serious article.

The Commercial Investor Admittedly, commercial real estate appears to be moving along just fine. Therefore commercial real estate investing would not be the suckiest idea you ever had in your life…if you have the wherewithal to make it happen. I myself plan on slowly building a commercial portfolio and I have plenty of friends who are millionaires from doing the same.

However, to do so requires massive amounts of available cash as most commercial property is expensive and the banks require 20% down at least. And in case you’re wondering, Carlton Sheets no-money-down schemes on skyscrapers owned by Fortune 500 companies don’t work. I’ve tried. You can’t just go in and assume their V.A. loan.

So scratch commercial investing. That’s not for the average Joe. And right now I’m writing to the average Joes out there who are looking to make a mere few hundred grand a year in real estate somehow someway. So how will you do it (and you can do it by the way)?

The Wholesaler Ah the beloved wholesaler. Sometimes at night I just lay there and thank Wholesaling for being so good to me. For finding me and showing me the light. “Thank you wholesaling. Without you I would be forced to do real work. Amen.”

As wholesalers we simply contract on real estate at below market value (typically 40-60% of the after repair value) and then sell our interests in the transaction for anywhere from $2,000 to $100,000. And it’s even easier than it sounds.

Remember earlier when I told you I had something important to tell you? A life changing tip? Well here it is:

Go where the money is abundant and easy.

Sounds simple enough, but you would be amazed at how many people are making life hard on themselves unnecessarily. Sometimes the wisest things in the world are the simplest. I base my professional life around this concept of “easy money”. No matter what industry I find myself in I always research it and go straight to that section of it that allows me to work smart and not hard. I go where the money is easy. I just don’t like stress and I refuse to allow it in my life.

An example: I recently got involved in network marketing. I picked probably (definitely) the only company in the world whereby if you speak to 100 people about the product all 100 of them will listen to you and be extremely interested. The product sells itself. I’m proud and excited to talk about it with others. You couldn’t pay me enough to represent any other MLM company. Why? Because this particular company and industry makes life easy on me. It’s an easy sell.

The same is true with wholesaling. I picked a certain niche in real estate that makes my life easy. I do not have to talk people into buying from me. I do not have to show houses. I do not even have to see houses. I am the most valuable player in both the seller and the buyer’s eyes. People come to me. I do not come to them.

Does that sound good to you?

Life is too short to be stressing over work and trying to talk people into things. Do something enjoyable, and easy, and profitable. Be a wholesaler. Shoot, I might even know someone who can teach you how to get a fast start.

Be real here for a minute and ask yourself, “why are you investing in real estate?”

* Long-Term Wealth Accumulation

* Cash-Flow Opportunities

* Large Capital Gains—-Rehabs & Subject To Loan Payoffs

Those are excellent reasons to be in real estate whether you’re wanting to make a little more money on the side while having your corporate job….but do you have larger aspirations in life??

That’s exactly what I’m getting at here and I’m asking those of you who are truly seeking a

LIFESTYLE CHANGE!!

What would it be worth to you to plan your own schedule? Just how much value could you possibly place on determining your own income level rather than a 4-6% cost-of-living adjustment?

That key to a true lifestyle change can be closer than you realize being a FULL-TIME real estate investor. You’re probably thinking, “just how do they do it and make a living at it day after day?”.

It’s not a secret to be revealed and is summed up in one word:

CASHFLOW!!

If you can’t pay the bills from your real estate profits, then you’ll be clinging to the myth of job security in corporate America. Cynical?-Yes, but true and I’ve experience first-hand that “downsizing” is a nice word meaning expendable asset.

I did all the “right” things in life for financial security that society has conditioned us to believe as true:

* Go to school and get a degree

* Get a great job and work longer, harder, and better than anyone else and you’ll make a ton of money

* Stay with the same company being loyal and they will be loyal to you

In my experience there is a corporate ladder and you eventually fall off the other side when you make it to the top! In no uncertain terms I wasn’t going to be “caught like a deer in the headlights” ever again….nope, no way, not ME!

So I took the journey in creative real estate and now lay a pathway for YOU. I’ve graduated from the “school of hard-knocks” to become a FULL-TIME real estate investor—and so can YOU!

The answer for you is not “rocket science” and lies in CASHFLOW!! I was soooooo hard-headed until this concept painfully set in with me and just a few ways I unsuccessfully tried:

* True rentals with no-money down techniques (because I didn’t have any) making marginal cash-flow

* “Home-Run” rehab and subject-to deals that were great but at the time too far and few between

All too often I’ll advise and counsel new investors away from hitting the “home-run” deals and to take care of paying the bills! I know because I use to scramble in between each big payday trying for weeks and months to put the next one together.

For me it was a vicious cycle for years going back and forth from a wannabe full-time real estate investor and then back to find a corporate job with my tail between my legs. Talk about despair!!

It all changed when I mastered one technique:

WHOLESALING HOUSES!

So just how did it happen for me? I had just been to an appointment meeting a truly motivated seller but he just wasn’t budging on all-cash needed; the price was right though! I left the appointment somewhat disappointed because my credit was tapped out and this guy had to sell like yesterday. M-O-T-I-V-A-T-E-D !!

I knew if I didn’t do the deal, there was a line of investors that would probably be running over each other bidding the property up. I could just hear the guy shooting me down and calling another investor: NEXT!!!!!!!!!!!!

Then, it hit me! Right around the next corner I was driving and I saw a rehab crew working on a house. Thought I’d stop in and just get a rehab crew number in case anyone would ever lend me money on a rehab again (right!). Come to find out the owner of the property just happened to be there looking in on his crew and the guy was cordial—SURPRISE!!!

In casual conversation we talked about being both investors but he just simply said that if I knew of any other deals like the one his crew is working on to let him know—GEEEZ!!! You could have knocked me over with a feather because I just left the deal with my payday written all over it.

I got back on the phone calling the seller of the deal I just left “tieing” it up under contract and literally begging that my $100 earnest money check be held by my attorney (that I hope didn’t bounce). Literally within the hour I had two contracts in hand: one to purchase for $12,000 and the other to sell for $14,000!

FINALLY I GET IT!!!! You make TRUE money in real estate by using your brain. It’s not about how big of a credit line you have, how much financing you have lined up, how great you swing a hammer or even how good looking you are. That is all a bunch of G-A-R-B-A-G-E! You get paid consistently month after month for being SMART!!

To be honest with you I didn’t even know what wholesaling was! I just knew that in a matter of days I had a $2,000 check in my hand and there was no stopping me now!

Now, $2,000 isn’t going to get you to retirement but from that first deal and 10 months later led me to 72 deals. Some I made more on, some less, but the principles were the same.

I can remember it vividly that day my boss got fired at deal #29 and this time it was for good! I now had my own cash machine that was on autopilot and freed me finally for all the “home-run” deals to get coming my way.

Wholesaling houses can put quick cash in your bank account and if you’re looking for the quickest way to become a FULL-TIME real estate investor….then please challenge me to any other more sure-fired way to get there than wholesaling houses!

We’re talking about:

* ZERO credit needed

* ZERO down payment money needed

* ZERO liability

What part of ZERO don’t you understand??? So, what’s your excuse now for not wholesaling houses?

Probably the one question I get asked the most on wholesaling is, “can that work in my area?”. Let me try to hold my emotions here and to sum this up in one word “yes”!!!! Wholesaling great deals knows no city, county or state boundaries and deals are where you find them.

More specifically of what I want to emphasize is that wholesale deals are relative and unique to your area. What I mean about that is that I am simply not going to give some blanket crazy statement like, “you can only wholesale properties if they are 65% Loan-To-Value including purchase price and repairs”….or “bread and butter three bedroom houses located in blue-collar neighborhoods”. Baloney!!!! Once again, the deals are where you find them and they know no boundaries are they simply ready for those willing to seek them out.

A three-bedroom house in some areas I’ve wholesaled in even repaired at 65% LTV were passed on by investors all day long. On the other hand in some areas I’ve wholesaled properties making money financed at 80% and still needing repairs. You see it is all a matter of the market you are in relative to the location of the property and strength/weaknesses of being a pro-buyer or pro-seller market.

So what do you do and how do you figure out which way to go? The answer lies in working backwards in wholesaling than traditionally what you think you would need to do. The very FIRST thing you need to do is develop a quality buyer’s list. Let me just give you a couple of pointers on how to develop your buyer’s list:

Run advertisement in your local paper for Sunday only in “Investment Property” or “Realty Wanted” section that simply reads: Rehabs and Rentals…all areas and all conditions. Call now! 555-1212″. You’re talking 2-3 weeks at on average $25 a week to get a good base of investors going. If you really want to be frugal then you can probably advertise for about half of that amount in the “Penny/Thrift Saver” publications.

Section 8 Goldmine!

You probably have the greatest list of strong and quality buyers right under your nose and haven’t even realized it: Section 8 Landlords. For properties that most likely are in the true “rental” strong areas needing moderate to major repairs, then you will also find the cash-flow king-Section 8 Landlords. All you have to do is go down to the government Section 8 Office and ask if you can get the recent listings of Section 8 properties available. The contact and phone number for those Section 8 Landlords are the same exact quality buyers you are seeking. Now they are just a phone call away to put in your database.

You now have a quality buyers list and thee you start marketing for wholesale deals taking into consideration relative to what you can get for them in your market. There are some out there that will read this and dismiss wholesaling opportunities for example in a hot, hot seller’s market like a South Florida or premium California area. Absolutely nothing could be further from the truth.

If you are in tune with your market truly understanding and knowing property valuations, then if the deals on the average are being bought by investors at the 85-90% LTV range then all you need to do is secure properties under contract at the 75-85% LTV range. It’s that simple and don’t make it harder than it has to be thinking you have to get “steal” deals to make money wholesaling houses. Even a 5% difference wholesaling a house of what you tie it up for and what investors will pay for can mean thousands of dollars of quick-cash in your pocket.

Take heart and just believe and know it right now that wholesaling properties for instant cash happens in your own back yard right now, and don’t you miss out on the quick money opportunities. Good hunting as luck has absolutely nothing to do with it!

I was asked this question last summer, “I put a “junker” property under contract for $7,000. It had an “after repaired” value of $45,000 and needed about $12,000 in work. This seemed like a classic wholesale deal, but I was unable to find a buyer at $10,000 before my inspection period ran out. I chickened out and exercised a contingency to get out of the contract. I’m very sure of my numbers and I’m sure this would have been a great deal for someone at $10,000. That lost profit has been haunting me for months. What can I do next time?”

As I see it, you have two separate problems here. First, you don’t have the resources to find a buyer quickly. Second, you don’t have any strategies for buying or controlling your great deal if you didn’t find a buyer right away. Let’s look at these problems one at a time.

When a wholesaler offers a deal where a buyer can purchase and renovate a property for an investment of less than 50% of the value of the property, and that wholesaler can’t find a buyer for that property, one of four things is happening. One possibility is that the property is in an area so bad that buyers don’t want to deal with. If other buildings in the area of yours are mostly boarded up, or the area is extremely unsafe or has a reputation for open drug and gang activity, finding a buyer can be difficult even when the numbers seem to work on paper.

The second possibility is that your estimates of the value or cost of repairs are badly wrong, so that the deal is not as good as you present it. This mistake is sometimes caused by overlooking an incurable defect in the property itself that makes it significantly less valuable than your comparable properties. Examples of this kind of defect might include a house sandwiched between industrial properties, or a terrible floor plan, or the only concrete-block bungalow in a neighborhood of brick Tudors. Fortunately, these mistakes don’t usually hurt you in the long run, because your potential buyers will quickly enlighten you as to the reality of the situation. You then have the opportunity to enlighten your seller, and renegotiate or get out of the contract through your inspection or partner approval clauses.

The third possibility is that you did not leave enough time in your inspection period to locate a buyer and give him time to inspect the property and make a decision. If you’re working with the right kinds of buyers - that is, experienced investors and rehabbers with cash - this is not a particularly lengthy process. Still, a minimum of 10-15 days is a must.

The final - and most likely - possibility is that you have neglected the very important task of creating and maintaining a good buyer’s list. A professional wholesaler does NOT depend on “finding” a buyer to make a profit on a particular property. Instead, he works hard to identify potential buyers before he’s ever found a property to sell to them. By networking with investors and rehabbers, he learns who’s a cash buyer, what areas and types of properties they’re looking for, what their exit strategies might be, what their requirements and pet peeves are, and how fast they can close. He gathers this information and keeps it where he can get to it when he needs it - that is, when he has a deal to sell them. By having a list of potential buyers, and knowing it well, you’ll know to whom the property will probably sell before you even get it under contract. At that point, it’s simply a matter of calling the right people until you get the answer you want.

Occasionally, matters conspire to put you in a position of having a great deal - but no buyer - despite your best efforts. This is where your real estate education comes into play. If you have the knowledge and resources to get these properties purchased and/or for getting your closing date delayed, you can still make these deals fly.

Tools you might use include a partner or private lender who can come up with the cash to close very quickly. Once you own the property, your exit strategies are no longer limited to a quick flip; you could retail the property or offer it for sale with owner financing. Another strategy might be to negotiate short-term seller financing or a “split funds” deal where you pay part of the purchase price now and part in 90 days. In wholesaling, as in the rest of the real estate business, knowledge is the key to profits.

Once in a blue moon you’ll get the same type of problem, or rather should I say “Opportunity” to wholesale a property but seemingly you run into a brick wall. Ok, here’s the scenario:

You find or become aware of a very motivated seller and that seller just happens to be a bank. It’s moving time and they want to get this one off their books and fast. All reasonable offers accepted.

You make your best reasonable offer and through your Realtor of countering a couple of times and a little bit of hee-hawing you get an acceptable price. Now you can smell that wholesale flip and after getting your contract back, your #1 buyer looks at and puts contract on. Things look great and you take the wife out on the town for the night because you’re going to score big! The attorney on your team initiates all the paperwork getting clear title, collecting and dispersing of funds from your buyer closing, and couriers the documents over the bank’s closing attorney…..you already figure by now how you’re going to spend that $5,000 that you’ll get tomorrow.

Let me interrupt this dream for an abrupt break in reality…..

The Deal Falls Through!

You get a call from your attorney with the bank closing department had a contract with you and not your wholesale buyer and the contract is considered null and void. There is not a darker shade of red on my face that could have expressed my emotions more clearly at the time.

Make it known right now that when you are wholesaling properties that are bank REO’s, that they do not understand a wholesale flip and nor will they ever understand a wholesale flip. In fact it will do you absolutely good to try to impress upon the bank’s closing attorney or anyone else in their underwriting department the nuts and bolts of a creative real estate transaction. Real life is this happened to me early on in my wholesaling career. In the end we all got it worked out and thankfully my buyer had a sense of compassion for the situation and didn’t really care that I was making $5K. Heck, he was going to make three times that much ones he got it rehabbed. Yes, there was a silver lining with my big paycheck in the end but my blood pressured registered beyond all comprehension before I could get settled down. I mean, really who cares who funds and closes on the deal in whatever is chose as long as it meets the time constraints of the contract as well as the price we agreed on. Right?—wrong!!!

Regroup and Get a “Gameplan”

# Just get it in your mind right now that when you can tie up a house at a great price, then absolutely nothing is going to stand in the way of your payday. Period! However, we can’t exactly hold people at gun-point to get our way though now can we?

# Let’s just see now where our problem lies and how to fix it. Everything was going great until the closing documents got the bank right? We had the certified funds and it was well inside the time limit of the contract. So what exactly went wrong?

Answer: It Is All in the Name of the Buyer!

The attorney I was working with in this particular case had my wholesale buyer listed as the actual buyer of the property. This is correct in theory and in reality the way the deal works. I was listed as an expensed item of “Finders Fee” for $5,000. I even admit looks a little “fishy” but nothing even with the hint of illegality. It goes to the bank’s attorney and the contract they have on file all of a sudden doesn’t match up to the closing documents couriered over by my attorney. I mean the numbers make sense but not the players. Here is what this comes down to and let me spell it out for you in clear and plain English: Never have your wholesale buyer’s name on the deed that goes to the bank’s closing agent. It’s just asking for trouble and a delay deletion of you getting paid.

Your Attorney

The most important part of this entire concept is for you to be working with a competent attorney Knowing creative real estate deals. You have to have someone on your side that is intimate with what you are trying to do as an investor. When you are truly getting on the creative side of real estate an attorney who talks your same talk is invaluable. Some of the creative options in real estate are simply not taught in law school. I can’t tell you how many attorneys I’ve talked to who had absolutely no idea what a land trust was which is a primary title holding device I use for my subject-to deals. You really do have to shop around for someone of like mind understands your needs. The experience and creativity that you will present in theory, will need to be materialized in legal terms with a competent attorney who will look out for your best interest. Some of the questions I’ve asked attorneys in pre-screening if they can fit my mold of what I’m looking for are:

How Do You Conduct a Simultaneous Closing?

* I wholesale properties that I tie up under contract that I have with the original seller. Do you know exactly what I’m talking about and do you routinely do these type of deals for investors?

* Do you customarily charge on one set of closing documents or two? (be careful here as it’s really just a little more paperwork and not double their effort!)

* How do you prepare the closing documents that go to seller…ie, when my buyer funds the deal and you send closing documents to the bank will I be listed as buyer on HUD statement?—with bank REOs that is the way you want it so that the name is not an issue.

* Will you be transferring ownership to my wholesale buyer through quit claim or warranty deed?

* Are you familiar with Land Trusts as title holding devices in the circumstance being that my buyer prefers to hold title in this manner?

* Are there any specific concerns or advisement you would give concerning wholesale properties and especially on contracts as bank REOs?

Process Revisited

Once again you may be asking yourself, “why does the bank care whose name the title eventually goes to as long as they are getting their money?”. Don’t try to change the system and just be prepared to circumvent it. The reason that you got that great deal under a bank REO in the first place is most likely they have pressure to clear up certain parts of their financials and as the saying goes, “stack ‘em high and sell ‘em cheap!”

One man’s loss is another man’s gain and you can be the beneficial recipient in this case when you’re talking discounted real estate. A couple of times this situation happened to me before I changed submitting closing documents without my name being actually on HUD closing statement bank gets. Let’s just say they were less than enthusiastic when they finally received funding and documents and the names didn’t match up just exactly as they expected. Absolutely nothing unethical in wholesaling with bank REOs…..or by the way “Mr. Big Shot Bank Closing Attorney” it says right there in my contract your bank signed off on “Scott Rister and/or assigns”. Some attorneys have even accused me of practicing law (gasp), and considering some attorney’s ineptness I feel like stating the same! Just be prepared with bank REO’s that the rules may change somewhat but the name of the game remains the same, “Instant Cash Wholesaling”.

Ever wonder why things happen? If not, then just stop reading. This will be way over your head. Go watch cartoons.

Why did real estate values suddenly climb to record highs the past few years? Why did interest rates drop so low allowing so many average people to refinance and get access to more cash than they had ever previously seen? And more importantly…

Why did it stop all of a sudden?

The answer is – someone wanted it this way.

Now I’m not pointing any fingers at the government or blaming the government or insinuating that the government is responsible in any way shape or form (the government did it). But that’s only because I don’t want men in black to come assassinate me in the middle of the night. I hate assassinations; especially when they happen to me. It’s one of my biggest pet peeves. Being assassinated. Unless they send a ninja. That would be cool.

But all undeniably true and irrefutable conspiracy theories aside, it is obvious that the market is somewhat controlled by the United States government. And I mean somewhat in the sense of totally and completely 100%. The U.S. is a proverbial control freak. Is there a proverb about control freaks? There should be.

I love this country. A LOT. But it would be nice if they would take their hands off of things every once in a while and let us pretend to be free for a smidge of a nanosecond. But hey, it’s not my country. Wait a minute, yes it is. I forgot. Ok, now I’m pissed. Someone hand me a picket sign.

My point is simply this – someone thinks you’ve made enough money in real estate…and it’s time to end the party.

You think the media blasted out their never-ending “sky is falling” stories for no reason? Someone was basically sending you a message –
The show is over. It’s not safe anymore. Go do something else.

Did it work? Did they scare you out of the market? Did you jump back in the rat race like a good little boy or girl? Did you get in line? Huh, little lemming? Did ya? Huh? Have you ever had lemming soup? Delicious.

I saw it coming. All the negative press surrounding the real estate market was the first clue. Especially since those “reports” were while interest rates were at record lows and people were still buying. I was so mad because I knew what would happen. It would work. People would believe it and get scared. And they did.

First of all, stop being such a scaredy cat. Scaredy cats are annoying. And smelly. Remember the song Smelly Cat by Phoebe Buffay on the sitcom Friends? Good. I have nothing at all to say about that song. I just wanted to make sure you don’t ever forget it.

My point is - stop watching the news. It’s stupid. You’re better off watching cartoons with the guy from the first paragraph of this article.

In other words – create your own reality instead of taking all your cues from what everyone else is doing. Everyone else is a freakin’ robot fully programmed and brainwashed by that same “someone” we mentioned earlier. That “someone” may be Suze Orman. I’m not totally sure. She looks suspiciously like a hostile space alien so she’s definitely suspect in my opinion.

I mean, let me ask you a question; if no one would have paid attention to those stupid news fabrications (I mean stories) and just kept on doing what they were doing, do you honestly think the market would have stalled or regressed. Of course not. We are the market.

I have good news for you. Especially for all you rehabbers, realtors, condo converters, pre-construction investors, and landlords. Yeah you. You’re all suffering right now so you may as well admit it. “Hi, my name is John, and I’m a recovering Realtor. Please help me.” Say it!

The good news is as follows:

I just saved 15% on my car insurance. Just kidding. With my driving history, that will never happen. I recently got a copy of my actual driving record and one of the (many) infractions was “driving on the sidewalk.” If that’s not funny, I don’t know what is. That particular infraction was a couple years old and I honestly have no idea what that is all about. I wish I could remember though because it sounds hilarious.

But we don’t have time to talk about me right now. Let’s talk about you. And the good news. One more time -

The good news is as follows:

My students and I are making just as much money in real estate right now as we always have. And you are free to join us at any time. How do we do it? Very carefully. That’s all I’m sayin’. Very…carefully.

I would venture to say that our elite group is the only one making any money right now buying and selling real estate. I know it for a fact actually. We are the only sector of the real state “investing” community that makes money no matter what the market is doing. Sounds fun doesn’t it?

Want in?

It’s fun in our land. Magical even. We don’t give a rat’s ass* what “someone” wants the real estate market to be doing. We just keep right on making money. And we do it by buying it really really cheap…and selling it really cheap. Buy really really cheap. Sell really cheap. Get it? We buy with 2 reallys (one of which is italicized so that you can easily see that it is leaning slightly to the right) and sell with 1. We all on the same page? If not, just read this paragraph sixty seven more times. You’ll get it eventually. Don’t give up.

In other words – we wholesale real estate. And we do it without ever taking title to the property, without ever spending a dime, and without ever using our credit. Joy!

I mean, it just makes sense doesn’t it? To make any money in a market you have to sell something people are buying. Duh. Well, people aren’t buying retail real estate right now. So that poses a serious problem for realtors and rehabbers, doesn’t it? Guess what people are buying lots of? Wholesale real estate.

When do the rich like to buy? When the market is up or down? If you can’t answer that then I’m going to have to ask you to go join the cartoon watchers please. I recommend The Simpsons. They buy when the market is down. Actually they buy all the dang time, but especially when it’s down.

When my students and I get a hold of a good property we have it sold in a day. One of our properties recently sold in two hours. Beats 3-6 months on the market doesn’t it? I have severe A.D.D. people. If it doesn’t move at the speed of light – I’m not involved. I’d choke myself to death with stiff nylon if I had to wait 3 months for a property to sell. So whoever likes fast money you have found your personal Pied Piper. Follow me. And start collecting checks.

How do we do it? Don’t have time for that now. It’s easy. I’m sure you can figure it out. If not, give me a call. I’d love to help.

Wholesaling is an incredible way to generate fast cash, and keep it flowing. Here’s a story that happened to us recently that demonstrates how great wholesaling truly is…

Through our marketing, a motivated seller called us (we no longer do outbound sales calls looking for motivated sellers) about a house they had in a very good neighborhood. Joe spoke with the seller on the phone and assessed that it was worth going to see the property.

It was in really good shape – already had new electric and HVAC – but needed a new roof, kitchen & bath updates, and general cosmetics. The only problem was that it had a tenant, and the Seller didn’t know how to get rid of the tenant. We told him not to worry, that we have an friendly way to entice tenants to move. Joe spoke to the tenants and offered our moving allowance of $250 if they move by a certain date and leave the property in broom clean condition. Joe, not being such a great negotiator (ha ha), had to go up to $300. This technique always works, and it did here again. The tenants left with no problem, and they left the house clean. (Is there a better way to have tenants move out?)

Joe had negotiated with the Seller to close within 30 days after the tenant moved out. As soon as the house was vacant and we had a key, we posted an ad on our wholesale buyers website. Within 24 hours we had a full price contract. We verified funding with the buyer’s hard money lender. And the house closed a little over 2 weeks later for a $20,000 profit. Is that great or what? That’s why we love wholesaling and think it should be part of every investor’s portfolio. How many of those deals do you have to do in a year to replace your current salary? And oh, by the way, that’s not a “special once-in-a-lifetime deal”. That’s not far from our normal average everyday profit on a wholesale

So what’s the lesson here? What other business can you do from home, at your own pace, and earn $20,000 in 2 weeks with almost no money, no ownership, no repairs or tenant headaches!!

We’re not saying all of this to brag, but so that you can see all of the potential of real estate investing. If you’re not wholesaling houses now, you should be. What’s stopping you?