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Nine Steps To
Quick Cash: The Anatomy Of a
Wholesale Flip By Stephen
Cook This article is excerpted in
part from Stephen Cook's course, “Wholesaling for Quick Cash: A Real Life
Guide to Flipping Homes." Wholesaling
properties for quick cash is something that anyone can do, even the beginning
investor. In this article, I would like to give a brief introduction to the
world of wholesaling, going over the nine basic steps that are involved in
flipping a property. Step
#1: Make Your Offer. Whether you pursue FSBO’s (For Sale By Owner’s) or properties listed
on the MLS (Multiple Listing Service), you’re never going to be able to flip
a property unless you first make an offer.
In making your offer, you need to keep your customer, the rehabber,
in mind. It should be based upon a
conservative estimate of the market value of the property after repairs less: ·
a profit margin for the rehabber, ·
money for closing costs (both for buying the
property and for reselling it to the retail
buyer), ·
money for holding costs, ·
money for repairs, and last but not least ·
a profit margin for you, the wholesaler. Typically, I deduct the greater of 30% or $25,000 for profit,
closing and holding costs, money for repairs and about $5,000 for my
wholesale profit. Step #2: Once The Offer is Accepted, Sign Contract to Purchase The
Property. Once your offer is accepted, you will meet with the seller (if it’s a
FSBO) or your real estate agent to sign the contract and give them an earnest
money deposit. Step #3: Start Title Work. After signing the contract, contact your settlement attorney (title
company, escrow company, etc.) to start the title work on the property. They will order a title search and
schedule a settlement date. There are two reasons to start the title work ASAP. First, you want to be ready to settle when
you are supposed to settle. Second,
in the event that you find a buyer who claims to be ready to buy, you want
them to be able to settle right away.
Step #4: Begin Marketing to Find a
Buyer. There are two main avenues that I use to market my properties. First, I’ll call the people on my buyer’s
list to see who might be interested. As I’m doing this, I will place an ad in the Investment Properties
section of the Sunday paper for the upcoming weekend. Here’s an example of an ad that I’ve used
in the past: Fixer
Upper*123 Main St., $80k
comps, only $40k (xxx)xxx-xxxx
Step #5: Come to an Agreement With a
Prospective Buyer. At some point, someone will show interest in your property. Whether you have one potential buyer or
multiple potential buyers will depend upon the deal. Each one is different. The more buyers you have, the less flexible
you need to be in reaching a final sales price. Step #6: Qualify the Prospective Buyer. Make sure the prospective buyer either has the cash or a line of
credit (ask for proof of funds if they say they do) or will be able to borrow
the money from a private (hard money) lender to purchase your property. Step #7: Sign a Contract With Your Buyer and Collect a Deposit. After verifying your buyer’s source of funds, meet with them,
execute a sales contract or an assignment agreement with them, and collect a
deposit. The sales contract serves as the receipt for their deposit. Either handwrite or include typewritten verbiage somewhere on your
contract a statement such as the following, “Received $(insert dollar amount)
as an earnest money deposit on (insert date)” and initial it once you receive
their deposit. You might also include their check number or write “CASH” if they
give you cash. Step #8: Submit Executed Documents To the
Title Company Submit both items–the executed contract with the original seller and
the executed sales contract/assignment agreement with your buyer–to your
attorney (title company, escrow company, closing agent, etc.) and schedule a
settlement date. Step #9: Go To Settlement. Go to settlement, pick up your check, and celebrate! Real Life Experience When I first started in the business, I believed everyone who signed
a contract to buy a home from me. I
believed everything they told me and took their word. Often, I got burned; however, it didn’t take too many slaps in the
face before I realized that I needed to take control of the entire process. At that point, I decided to control every deal by lining up
contractors, lining up the lenders, starting the title work myself through my
attorney, and mandating that my buyers use my attorney. Before taking control, I estimate that about 25% of my deals didn’t
settle with my first buyer. Since taking control, that percentage has been reduced to about 5%
of my deals. End of the Article Dead-Broke
Ex-Owner Of a Failed Restaurant Venture Hits a Goldmine In Real Estate.
His Recipe To Making Hundreds of Thousands Is……
Buying Ugly Properties At Bargain Bottom Prices And Quickly Re-Selling Them
For Cash.
In 1998 Steve was just coming out a failed restaurant venture with
the debt load up to his eye-balls. He was at a low point in his life, when he
heard about “nothing down” investing in real estate. Without thinking too much he jumped into it having no prior
experience. He learned about flipping homes wholesale to other people for
quick cash. Since that time less than 4 years ago, Steve has bought and sold
over 170 properties, including 27 in the first two months of 2001 alone. Steve specializes in both wholesaling and retailing of properties
for profit, and he’s perfected this craft. When he started he was wholesaling
most of his properties to other investors for small profits of $2,000-$5,000.
As Steve developed his own sources of funds he started running
rehabs and made $20,000-$40,000 profits per transaction. He earned his money and reputation in the trenches. Can You Start Making Fast Cash With Run Down Homes? Steve thinks you can. But you need to start by learning from someone
who knows how to do it right and cut through years of painful and costly
mistakes. I don’t like to get my nose bloodied because I didn’t know something
I could have and should have. Do you? Luckily for us, Steve shares the systems he created to buy and sell
a lot of homes and the lessons he learned in the field through 2 of his real
estate courses: Wholesaling for
Quick Cash: A Real
Life Guide to Flipping Homes and Rehabbing For Big
Cash: A Real Life
Guide to Retailing Homes Not Ready To Tackle RehabsAnd Deal With Contractors? Let Others Mess With That, While You Generate A Stream Of $2,000-$5,000 Checks With Paper and Pencil Wholesaling for Quick Cash: A Real Life Guide to Flipping Homes Just like the title says, this course offers a refreshingly
realistic account of the real life world of flipping homes. From the
trenches, Steve tells it like it is with 219 pages of hard-hitting facts
about the day-to-day life of buying and selling properties for quick cash. In this powerful text, he touches upon many issues left unresolved
by other courses and reveals the secrets that allow him to average a $5,000
profit per wholesale deal. Whether you're a seasoned investor or just getting started, if you
want up-to-the-minute information on how to make QUICK CASH flipping
property, this course is for you. Steve jam-packed this course, covering
every aspect of flipping properties including the inside scoop on such topics
as: §
How to evaluate a neighborhood §
How to define your "goldmine" target
area §
How to find profitable properties §
How to determine the after-repaired value of a
property §
How to estimate repairs, even if you've never
done it before §
How to construct money-making offers §
How to increase your chances of having an offer
accepted §
How to use a Realtor to make money §
How to find and qualify a Realtor §
How to build a professional success team §
How to find all the hard money lenders you'll
every need §
How to profit without cash, credit or provable
income §
How to market your properties and maximize your
income §
How to find and qualify wholesale buyers §
How to create "win/win" situations so
everyone profits ...and most
importantly... How to make some QUICK CASH
STARTING TODAY! This is no ordinary course. Wholesaling for Quick Cash: A Real Life
Guide to Flipping Homes is designed to put you head and shoulders above the
competition in your town and place you on the fast track to success. Steve doesn't pull any punches in pouring out page after page of the
knowledge he's gained while buying and selling over 170 homes in the last
three years, including 27 houses in the first two months of 2001 alone. For the first time, from start to finish he explains in his own
down-to-earth manner how to flip a property step by step. Chock full of
information and REAL LIFE EXAMPLES, this course is not for the faint of
heart. If you're a serious investor looking for detailed instructions on how
to GENERATE CASH NOW without having your own cash, credit or even a full-time
job, this course is a MUST for your real estate library. But don’t just take Steve’s word for it. Here’s what some of the purchasers
of Steve’s “Wholesaling…” course say:
Click
Here To Order Your Copy Now! *Includes 219 page course manual plus computer diskette with sample
legal forms. Not Sure If You Are Ready To Settle For Small $2,000-$5,000 Checks? Then Learn About The Other Side of Business… Rehabbing For Big Cash: A Real Life Guide to Retailing Homes In Rehabbing for BIG Cash, Steve explains exactly everything you
need to know to start injecting your bank account with large sums of money. Just like the title says, this course offers a refreshingly
realistic account of the real life world of rehabbing homes. From the
trenches, Steve tells it like it is with a whopping 351 pages of
hard-hitting facts about the day-to-day life of buying and renovating
properties for big dollars. In this powerful text, he touches upon many issues left unresolved
by other courses and reveals the secrets that have allowed him to average
$20,000 in profit per rehab and to make as much as $40,000+ on a single deal. Whether you're a seasoned investor or just getting started, if you
want up-to-the-minute information on how to make BIG CASH rehabbing property,
this course is for you. Steve jam-packed this course, covering every aspect of renovating
properties including the inside scoop on such topics as: §
How to evaluate a neighborhood §
How to define your target area and develop your
own "goldmine" §
How to find profits amidst the good, the bad and
the ugly §
How to use Bird Dogs and Wholesalers to your
advantage §
What are the advantages and disadvantages of the
various marketing methods, including rent to own and owner financing §
How to use a Realtor to make money §
How to find and qualify a Realtor who will work
with you §
What to expect from your buying agent §
What to expect from your selling agent §
How to construct money-making offers §
How to determine the after-repaired value of a
property §
How to estimate repairs, even if you've never
done it before §
How to increase your chances of having an offer
accepted §
What to do once your offer is accepted §
How to fund your deals with private or bank
financing §
How to find all the hard money lenders you'll
every need §
What to do after you purchase a property §
How to find and qualify a good contractor §
How to pay your contractor §
How to build a professional success team §
How to find and qualify a good mortgage broker §
How to evaluate offers from potential homebuyers §
How to understand the homebuyer mentality §
How to solve the mystery surrounding appraisals
and inspections §
How to stay in control of your deal, including
the loan process, from start to finish §
How to read a settlement sheet §
How to avoid common hurdles and pitfalls §
What are the keys to successful rehabbing §
How to approach a bank for a line of credit §
How to generate huge profits without cash, credit
or provable income §
How to invest honorably and ethically §
How to create "win/win" situations so
everyone profits §
And much, much more... but
most importantly... How to make some BIG CASH STARTING
TODAY! This is no ordinary course. The “Rehabbing
for BIG Cash: A Real Life Guide to Retailing Homes” course
is designed to put you head and shoulders above the competition in your town and
place you on the fast track to success. Steve doesn't pull any punches in pouring out page after page of the
knowledge he's gained while buying and selling over 170 homes in the last
three and a half years, including 27 houses in the first two months of 2001
alone. For the first time, from start to finish he explains in his own
down-to-earth manner how to rehab a property step by step. Overflowing with information and REAL LIFE EXAMPLES, this course is
not for the faint of heart. If you're a serious investor looking for detailed
instructions on how to GENERATE BIG CASH without having your own cash, credit
or even a full-time job, this course is a MUST for your real estate library. Click
Here To Order Your Copy Now! *Includes 351-page course manual with sample legal forms. Copyright Alex Gurevich, 2002 |