How to Wholesale Real Estate Step by Step_
Real Life Transactions Hi, this is Neva at Timeforinvesting.com.
Today I�m continuing my segment on going over a couple of transactions that I worked
on answering these four questions: How did I get the lead or find the property? How was
I able to help the property owner or to motivate them to sell? Or how to find the cash buyer?
And what was the crazy thing that happened? This one was a property � how did I find
the lead? I found the lead, I actually called the property owner and asked him if he was
interested in selling. At that time I think I probably called a couple of hundred and
finally I found somebody who said, �Yes.� So calling is a good technique but you have
to be willing to call a lot. I would say I�ve definitely called like
a thousand people so far � so I call a lot. I haven�t called in a long time but when
I was calling it was a lot. It took me a full year to get somebody that says, �Yes.�
So that�s a way � a marketing method as well.
Two, so what was the motivation for the property owner to sell? In this situation the property
was tenant-occupied and his requirement was that we closed on the house with the tenant
in the house. The issues deal was that the tenant�s rent
was like the average rent probably in that neighborhood would be like $3,000. And if
I can remember correctly she was paying like $600. It was like something really, really
crazy because it was like a family member but then you know you�re kind of stuck because
then you can�t evict the family member. So she had been there like forever and he
was just kind of like, you�ve got to buy � you get her out type of thing.
You�ll find though that when the rent is that low that even still the cash buyers are
going to be kind of hesitant sometimes to close with the tenant in there because then
they�re also going to have to fight to get this tenant out as well because you can�t
really buy a property and then raise rent from $600 to $3,000. I really think that this
person isn�t going to be able to pay it. So you kind of know, whoever buys it knows
they�re buying this headache. So in this situation what I did, I said, �Okay,
we�ll close with the tenant,� and what I did, I negotiated for us to close with the
tenant and then we held back. The title company held back, I think it was $5,000 or something
like that. And what that does is they hold it until the
tenant leaves. So it�s kind of like it helps the seller to also help us get the tenant
out. And just in case we can�t get this tenant out then that money is used to actually
start the whole court process and eviction process, and things like that so that the
cash buyers don�t have to use his own money to get the tenant out. So that�s what I
used in that situation to get around that issue that he�s saying, �Hey, I definitely
need you guys to close with her in the house.� So this is a situation where it�s definitely
a good transaction for a cash buyer because a traditional person is not going to want
to buy the headache of going through this knowing that if you want the property you�re
going to have to evict someone. It�s a great opportunity for us but I think
you just have to be always be aware that you�re always trying to kind of problem-solve things
so don�t just give up when things like this happen. So once I�d negotiated that then
I had a lot of cash buyers that were interested in buying the property.
How did I fund the cash buyer that did buy the property? Actually, by the time I got
this house in the contract I had like a really large buyer�s list. But it just so happened
the guy that purchased it, he�s actually the first cash buyer that ever gave me his
card and I got his card at a Rio meeting. I was at a Rio meeting, they used to let us
� they still do, you put these stickers on saying like if you�re a wholesaler, if
you�re a rehabber. And so what they say is if you�re a wholesaler then you should
be making sure that you�re networking with a rehabber because the rehabber will be buying
what you get on the contract that you make to wholesale.
It helps the right people to network with each other, and so he was the first person
that I have build myself up to, to go to � I think at that time I hadn�t wholesale anything.
I just had like the sticker, I was like trying to claim it and say, �I�m wholesaler,
I need a cash buyer.� And he gave me his card. So it worked out because I probably
wasn�t able to actually get him a property � I�m sure like a year or two had passed
but it was great that I still had him on my list and he bought the property. So that�s
how I found the cash buyer. And then my last question I always answer
is, �What crazy happened?� So what happened on this one was we got ready to close. We�re
ready to close, and this property was actually it was owned – it was free and clear but when
we got ready to close it was showing that there was like outstanding loans from 1980
something and the owner was like, �I don�t remember ever taking out a loan.� He didn�t
have the papers stating it was paid off, or what was going on.
And then, the issue was because the loan was so old, excuse me, the original bank and the
bank that it was now was I think it was like five, six companies it just had been sold.
And if you ever work for a company and they merged, and you know that when companies merge
they don�t really merge their systems. They just slap the new company name on, and they
keep the systems separate. So then I�m like calling, and calling, and
calling trying to find which section of the bank now has access to those old accounts.
So that was taking me days. I even at this point this title company, they sent someone
because we couldn�t � the bank couldn�t even find the loan to say if it was paid off
or it was on. It was just literally saying, �We can�t find,� every time we reach
someone they were like, �Oh, I don�t have access to loans that old.�
So finally we were able to find it and it turns out that the loan�s paid off like
the guy said because he�s saying, �I can�t even remember taking out a loan.� And it
was for a tiny amount, and it was paid off but the bank never went back and released
that lien when he paid it off so that�s why it was still there. So they released it
and then we were able to close. So that�s why I�m saying. It�s things
like that that you have to � until you get to the closing table and everything is final,
you have to monitor and be prepared to jump-in and solve some issues because more than likely,
like I said, something�s going to happen because at least for me I remember when I
first started, my mentor at that time, Tom Z., he was saying that, �Something always
happens.� And I used to think, �Oh, I�ll just make
sure I�ll dot all the I�s, cross ever T,� but even that is just out of my control
that something just always happens, somebody�s calling me which is something crazy so just
be willing to jump in and work. Because if I don�t jump in and be the person calling,
and making sure somebody finds this loan and get the release then we�re not going to
close and the whole, entire thing is going to fall apart. And I don�t want that for
the seller and I don�t want that for myself. So that�s my tip for this week and I�ll
go over this again, those four questions: How did I find the lead? I called. What were
their motivating factors? And also, this house needed a lot of repairs, the site also that
the tenant is in there, it also needed a lot of repairs two. And three, how did I find
the cash buyer? I found the cash buyer at a Rio meeting. And four, what crazy happened?
There was this old lien that we had to make sure it was released on the property.
So continue to send me your questions and any other thing that I could tell you that�s
helpful on my wholesale deals. Let me know those questions as you have. But these are
some of the common questions that I�d been getting that I thought if I answered, and
actually gave you examples it would be more helpful.
So I�ll see you � like I said, I�ll try to do two videos a week so I�ll see
you next video. And remember to subscribe! Bye, bye.