Must-Read for Real Estate Investors

Starting a real estate business can be a bit overwhelming, especially for the new guy or gal. Understanding the process is a really big part of your success. So here is a quick over view of what real estate investing is all about.
First there are different ways to make money in real estate.
• You can buy and hold: which basically means that you buy a property and then rent it out.
• Flip: which means that you buy a property, fix it up and resale it. These are normally properties that need to be repaired so that they can be move-in-ready
• Wholesale: means you find a property put an offer on it (put it under contract with an Agreement to Purchase contract) and then pass it to an investor (with and Assignment of Contract)
There are other ways to invest in real estate but these are the ones most used.
Now let’s discuss the overall process of wholesaling.
Step 1: find investors (bandit signs, Auctions, REI clubs, etc)
Step 2: find properties (Get an Agent that understands investors and find bird dogs)
Step 3: put properties under contract and put down your earnest money down (this is going to be the purchase agreement between you and the seller) Make sure that you have “and or assigns” in this contract. Also know what your time frame is to inspect the property as this is your way out of the contract if needed.
Step 4: Get in touch with the investors. Put the investor under contract and have them pay you the earnest money. (The contract will be the “assignment of contract”) You can find this and many other forms under “Student Resources” and “Forms and Docs”.
Step 5: Investor goes to closing and you get paid.
Now that you have an overview lets cover more in depth each step. So I gave a few examples of finding investors. Here are a few more:
Land Lord meetings
Contacting professionals (Doctor, Dentist, Lawyer, etc) this is anyone that has money but no time and/or knowledge.
Google Maps
Websites like Dean’s where you can network with other investors
Once you have the investor you need to qualify them, which basically means you are going to ask them what kind of property they normally buy, where they buy, what range they normally buy in and how much rehab they normally do. Be sure to find out what the investor needs to make in order to make it worth their time and money.
2) Finding the property. As I already stated this is going to be through the agent or bird dog. The agent will need to set the filter on the MLS. So that you are finding a property that needs repair. The verbiage you are looking for are things like: handyman special, needs tlc, etc.
Also you want a property that is vacant and has been on the marketing 30 days longer than normal. Let me give you an example: If the normal time to sell a house is 60 days, then you are looking for the DOM to be 60 plus days on the market. Be sure to look at the CDOM, if it is different that means that the property was on the market then taken off the market and then back on the market again.
Having a vacant property most likely means that someone is losing money on the property. That is why we can come in with a low offer, they could be desperate to move that property quick.
3) This is the part that scared me the most. Don’t over think it, it isn’t as hard as you may be thinking and you do have the real estate agent to help you understand this contract. I promise this part will get easier and easier.
4) Next step is to get in touch with your investors and also market the property to your real estate club, websites like this one.
I hope this helps you newbies!!