Flipping houses (also known as wholesaling houses) is the easiest and fastest way to make money in real estate investing.
It also requires the least amount of money invested in any deal.
Here is a quick break-down of how it works.
1) Identify houses well below market value The best way to get houses below market value is to target motivated sellers.
These are people who really need to sell their houses.
People in some kind of trouble and own real estate always get into my mailing list of motivated sellers.
I target people going through divorce, have liens, have inherited properties, in foreclosure, etc.
I also target expired listings from the MLS - these are really looking to sell but they are not successful.
Secondly, I try to target only those people who have owned their house for at least 6 years, meaning they probably have some equity.
This is necessary in wholesale real estate investing.
2) Mail out marketing pieces to your leads I generally send two postcards spaced 30 days apart to each of my motivated sellers.
If they have inherited property, I send them a series of letters for about 8 months.
This is because the probate process can take time and I need them to think of me first when it is time to sell.
In my marketing pieces I always include my website address more conspicuously than my phone number.
I want them to visit my website so they can find out about me and my business without having to ask so many questions.
My real estate investing website is built to convince motivated sellers that I am the best person to buy their house and solve their house needs.
It also convinces them to submit their house information right there on the website so that I get a fully pre-screened and pre-negotiated deal that only needs a few minutes of my time to decide of it s a deal or not.
3) Make reasonable offers All my offers for wholesale deals are less than 65% of the full market value minus estimated repair costs.
This is why this business model needs houses with equity.
4) Sign contract to buy Once we have an agreement, we execute the contract.
I then fax it to my title company so they can begin title work.
5) Identify a wholesale buyer This is the fun part of wholesale real estate investing.
I have built a big lists of real estate investors looking for wholesale deals in my area.
I usually list my property on my real estate investing website, then send out an email to my buyers list.
They can view all the pictures and video virtual tours along with all any documents (like comparable sales, etc) right from my website.
They can also share these deals with their friends on social networking media like Twitter, Facebook, etc.
The website always offers them and their friends the opportunity to join my investor buyers list so that they will be notified when new deals become available.
I also target real estate investor buyers from Craigslist and the local newspapers.
In all cases, I always send them to my real estate investing website instead of a phone number.
6) Sign contract to sell Once I identify a buyer with cash, we then sign the contract.
This can be a simple assignment of contract where I assign my contract for a fee, say $5000.
It could also be a full contract just like I own the property if there is enough money in it for me.
The title company closes both transactions on the same table where I buy from motivated seller then sell to my investor buyer and cut me a check for the difference.
7) Cash the check! I walk home with a check without spending any of my money.
This process usually takes 2 to 4 weeks from the time you get the deal to the time you have a check in your pocket.