There has been a lot of talk lately about flipping properties. Folks are swarming to real estate seminars in hopes of finding the golden egg; the one that will make them rich on their first deal so they can live on a mountaintop in Hawaii. Guru's tell you how easy it is and convince you to buy their programs that will teach you how they did it. As a guru myself, I have to defend both sides. Can you get rich investing in real estate? Absolutely! Is it easy? Actually, it is. They key to success lies in the individual. Are you motivated? Are you willing to invest time to learn a new business or are you going to give up after just a few attempts? Do you like dealing with people? Do you truly want to help homeowners in distress or are you just looking for a quick buck? Do you have a negative attitude and look for reasons why something won't work? Are you willing to work hard or are you simply looking for a get-rich-quick scheme?
These are a few of the questions you need to realistically ask yourself. I have taught many seminars in the past 10 years. There is always someone who comes up to me telling me how they have tried everything and nothing worked. Typically, the person is so negative, it's no wonder nothing works. Folks, you can find a million excuses as to why you can't be successful. If the truth be told and you really took a good look at who you are, it's most likely you. I truly believe that anyone with a real desire and a good system to follow can be successful. The key is to follow a system that works. Many gurus teaching today are teaching you concepts that worked 10 years ago. It's been so long since they actually closed a real estate transaction, they are unaware of the changes in the market.
I began teaching because I had a strong desire to help others have financial freedom; it's definitely a calling. I remember the days when I mailed the phone bill to the electric company and the electric bill to the phone company just to buy time. I've had my phone, electric, and water cut off at one time or another. I have let the bills slide so I could buy food. I've had to park my car down the street so it wouldn't get repossessed. So how does a former waitress become a millionaire real estate investor? By sheer determination. I truly believe that if you have a strong enough desire to be successful in this business, you will! So, if real estate investing is so easy, why doesn't everyone do it? I believe it is a lack of exposure. I teach folks how to wholesale or flip properties. Every time I teach, I ask folks in the audience how many of them know what wholesaling is. Usually about 10 percent of audience members raise their hands. This means that 90 percent of the people in the audience have not been exposed to the concept. I want to expose you to the greatest way to get rich investing in real estate: Wholesaling.
Why do some call it flipping or quick turn, while others use the term wholesaling? It depends on what you heard first. Insiders use the word wholesaling. Let's make that step one to success: using proper terminology. Wholesaling is a simple concept that has been around since the days of Adam and Eve. One person has something to sell and another wants to buy. A wholesaler puts these two people together. You'll get paid to be the middle man. Let's look at it in simpler terms: When you buy groceries you are buying them for more than the store paid for them. The store is the middle man. They buy groceries for less and sell them to you for more. You are going to do the same thing only with real estate. You're going to find homeowners in distress and put them together with rehabbers. Rehabbers are investors who specifically buy houses to fix up and sell retail. They are always looking for good deals. If you can supply them with a steady stream of properties, they will keep you very busy.
Seems simple enough doesn't it? It truly is if you'll do it right. So how does one “do it right?” Follow these steps and you'll be on your way to a hefty paycheck: First, you must find homeowners in distress. There are many ways to advertise what you do: Run ads in the paper that state, “I buy houses cash”; place business card size ads in school newsletters; call local churches and charities to let them know that you are a real estate investor who helps folks that are behind on mortgage payments; place “I buy houses” signs on street corners; wear hats and T-shirts stating what you do; call homeowners listed in the public records who have filed for divorce, bankruptcy, or foreclosure, landlords who have recently evicted tenants, folks who have not paid real estate taxes, and people going through probate; place magnetic signs on your car; go door knocking; and much more.
There are many reasons homeowners find themselves in distress: Job loss, illness, downsizing, job relocation, divorce, death, pay cuts, and more. Just searching for foreclosures limits your business. I have bought many houses from people who were transferred, unable to sell the property before the move, and couldn't afford to make two mortgage payments. Even though the payments were current, the situation was headed for distress. Don't limit your thinking. Once you find a homeowner willing to work with you, go to contract. Get a real estate sales contract from the local board of realtors or an office supply store. Fill it out making yourself the buyer. Give the homeowners a $10 dollar deposit to bind the contract. Yes, homeowners will accept $10. I have never had anyone tell me no. Once the contract is signed, get busy finding another investor (a rehabber) who will buy the property wholesale.
To find an unlimited supply of rehabbers, run an ad in the local paper that states you have houses in foreclosure. When they call, get their contact information and keep it in a database. Each time you get a property under contract, contact the investors on your list. If the property is priced right, it will sell. Another great source for rehabbers is to attend local REIA (real estate investor association) group meetings. These are monthly meetings attended by real estate investors, mortgage brokers, real estate agents, and others specifically looking to work with real estate investors. Once you find a rehabber, simply assign the sales contract to him or her and this person will close on the transaction in your place. You'll get paid an assignment fee for putting the deal together. The closing will take place at a title company or an attorney's office. The rehabber can arrange the entire closing. All you have to do is show up and collect your check.