Sun, Nov 22, 2009
|
Buy Low, Sell Low
| | Tuesday, August 30, 2005 @ 11:04 AM EDT
|  Printer Friendly Page
 Send this Story to a Friend |
Contributed by: Larry Goins
Larry Goins Properties
Read more archived articles about U Make The Call
Most of you are saying I thought it was buy low sell high. How can you make money by buying low and selling low. Remember the key is that like any other investing you do, you make your money when you buy and you realize the money when you sell. If you can learn the negotiating skills it takes to get a real deal under contract. What do I mean by real deal? I mean a deal that you have negotiated well enough to have enough profit in it that any investor would be glad to take it off your hands.
Most investors starting out like the appeal of wholesaling to other investors because it is the fastest way to generate quick cash. The key to being able to sell houses fast is having your buyers list lined up in advance. In addition to that is having a good hard money or rehab lender lined up also. Lets face it, if you don't
have a relationship with a rehab lender that can finance investors offering no money down including the funds to rehab the property then the only investors that you can sell to are all cash buyers or buyers with enough experience to have a bank line of credit. How many all cash buyers do you think there are in relation to buyers that will buy if they can get 100% financing? Whether you use Financial Help Services, Inc. or another company doesn't matter but what does matter is that you find a good lender that understands investors and investment property and you build a relationship with them so when you get a deal to wholesale to another investor it is a smooth and painless transaction.
I'm telling you from experience that when you sell a house to an investor and you have left some profit on the table and the investor feels good about the transaction then they will keep buying houses from you. Even though we have thousands of investors in our database we probably only sell houses to about 50-100 of them. You only need a few good investors to have a thriving wholesale business. Also don't forget that your investors are also a great source of properties that you might want to buy as well. We have sold houses to and also bought houses from the same investors. Is this a great business or what?
If you decide to get into wholesaling houses there are a couple of things I want you to keep in mind.
1: Always do good clean business. If you ever start to push a deal or try to force a deal to close you end up being transaction oriented instead of people oriented. We have a policy in our office of putting people and principles before profits. When you do that EVERYBODY profits.
2: Always use conservative numbers. If the seller or realtor says it will take 7-10k to repair the property use 10k in running your numbers. If the realtor says they can sell it for 50-60k use the 50k number. We leave more money on the table than any wholesaler I know and it is because we are conservative in our analysis. I tell you one thing, it keeps the investors coming back and calling us to see if we have any more deals! One more thing about being conservative… always use a conservative appraiser. It doesn't do any good to get a pumped up appraisal to get your deal to close only to have the take out lender beat up your appraisal and lower your loan to value. You have to be able to get the investor out of the hard money loan you get them into.
3: Always make sure a deal is win win. Nothing will hurt your wholesale business more than trying to sell a house to an investor at 85-90% of value with no cash flow. Investors should be paying no more than 70% of value as is and 80-85% for a property already repaired with a tenant in place.
Note: Larry H. Goins is not only licensed as a mortgage lender and mortgage broker in North Carolina and South Carolina, he is also licensed in both North Carolina and South Carolina as a Real Estate Broker and General Contractor. He is a member of the North Carolina Association of Mortgage Professionals and a member of the National Association of Mortgage Professionals.
Larry will be speaking on our Teleconference on May 16th at 9PM EST . You must register for this event! Register for Larry's Teleconference here
Word Cloud:
enough deal only matter other houses make low, profit will able relationship wholesale they sell hard there rehab always about business value another investors cash realtor want mean them when lined transaction buying property close have keep with profits. numbers. more then wholesaling loan like what good conservative says business. experience real investor because being than people appraisal take doesn't buyers money house also table lender great having don't
|
|
| |
|
|
|
|
Logged In members can moderate all comments.
|
|
