What You Need To Learn To Wholesale Real Estate

The more you learn about real estate, investing, sales, marketing and psychology - and actually implement - the more successful you will be at wholesaling real estate. However, what are the key things you must learn to wholesale real estate profitably?

First, you need to be able to find great deals. This entire process starts with the knowledge of what a good deal actually is.

A deal needs to include one or more of the following criteria:

1. Able to be purchased for significantly below current fair market value, and/or
2. Has great positive cash flow with little or nothing down and/or
3. Has the possibility of owner financing

These usually stem from some type of motivation from the seller. As an aside, the motivation of the seller can be from good news like a job transfer with significantly higher pay to not so good news like a divorce situation. In both good and bad scenarios, you should only make deals where both parties win.

The second thing you must learn, which is just as important, is how to find buyers for your deals. I strongly believe you should be doing this from the very beginning by building your buyers list. A buyers list is nothing more than a list of people who are usually investors, but can also include folks looking for a home to live in. The size and quality of your buyers list can determine your success or failure as a wholesaler because you need people to sell your deals to.

The first two things - finding deals and building a buyers list - are the TWO major areas that you must learn and master as a wholesaler. Practicing, improving and ultimately, mastering these two skills are the foundation that you must work on daily.

In addition to finding deals and building a buyers list, you must also learn how to complete your paperwork to wholesale real estate. This involves learning and understanding your contract to buy (or option agreement if you use that) and your assignment or contract to sell.

Your ability to put deals together and sell houses relies heavily on your ability to negotiate and sell both yourself and the deal. Become a better negotiator and salesperson and you will improve the number of houses you buy, the price you purchase them at, the number of houses you wholesale to a buyer and the price you sell them for. It is that important.

I am tempted to say that you can't wholesale alone, but I will say, at the least, it is almost impossible to do the entire process by yourself. You should have a team of people helping you wholesale, including key dream team members like a real estate agent or broker who can help you find deals, determine value, bring buyers and introduce you to other critical team members. While you are usually not borrowing money yourself to wholesale deals, having a great lender on your team to work with your buyers can make your ability to wholesale a much smoother process. Also, don't forget the importance that a flexible title or closing company can play in your ability to close creatively structured deals.

Finally, you must understand the transaction flow and especially the closing process. Understanding what needs to happen and when in a real estate deal will allow you to fix things before they become an issue and improve the ratio of your deals that actually make it to closing - when you ultimately get paid. A great dream team can help you accomplish this.

Until my next post,

James