Are you new or considering property rentals? If that’s the case, chances are you haven’t even heard of landlord insurance. You might be thinking that it’s just another excuse for insurance companies to take your money or that you have another type of insurance that can cover rent-related issues.
But it’s about protecting your investment and financial gains.
Skipping on landlord insurance is a rookie mistake you don’t want to make. With financial gains as your main objective, it may be tempting to cut costs. But if doing so compromises your investment’s security, you might end up spending more than you save.
To help you make wise investment decisions for your rental properties, we’re going to cover what landlord insurance is and why it’s a necessity.
What is Landlord Insurance?
Landlord insurance protects your rental property from damages and financial loss. When your property gets damaged during the occupancy of a renter, landlord insurance can cover these expenses in the condition that the damages that occurred are covered under the terms.
External and uncontrollable factors such as natural disasters, accidents, or other kinds of destructive events can damage your property. Landlord insurance can cover expenses resulting from these events, saving you from financial losses.
Landlord vs. Homeowner Insurance
Landlord and homeowner insurance cover similar kinds of damages brought upon by external and uncontrollable factors, but they can’t stand in place of each other.
Homeowners insurance can only be used if the owner of the property is the current occupant. In other words, you’ll have to be living on your property. That said, homeowners insurance can’t cover damages under rental occupancy. Insurance companies can only cover these damages if the property is under landlord insurance.
To put it simply, the kind of insurance required for the property is determined by who will stay in it.
Another notable difference between the two is their prices. There are higher risks of accidents in rental properties resulting in higher landlord insurance prices. Compared to homeowners insurance, landlord insurance can be 15% to 100% more expensive.
What your Landlord Insurance Should Cover
External factors that pose a threat to your property investment will depend on your location. For instance, the state of Michigan’s most common natural disasters are storms, floods, wildfires, and tornadoes. Considering what natural disasters occur in Michigan, you want to get an insurance plan that specifically covers these types of possible, unfortunate situations.
Here’s a list of guide questions to help you find a landlord insurance plans that suits your property:
What does the plan cover and what are the limitations? (Pro tip: Clarify any vague statements)
Will insurance claims be settled with cash value or replacement costs?
Can the insurance cover lose rent, water damages, and other highly possible incidents?
Can landlord insurance protect me from liabilities of house structure-related accidents?
To help you further assess if the landlord insurance plan you’re considering provides comprehensive coverage, take a look at this infographic:
The point is to avoid being hasty in choosing your landlord insurance plan. Your plan must provide protection against property damages, liabilities, and rental income loss, among many other things that may happen on your property.
Keep It Safe, Keep On Earning
Taking care of your property investment enables you to keep earning so you can use your money for future investments. By taking care of your investments, you also keep your financial well-being secure.
Getting your property investment insured is a surefire way to keep it safe and profitable, so take the time to study what accidents are most likely to occur on your property investment. Getting a comprehensive insurance plan that meets your needs will save not just money, but save you from unnecessary stress too.
Aside from landlord insurance, consider requiring your tenants to get their own insurance as well. Read more about it in our article on renter’s insurance, and get in touch with us if you need more clarification.
Find a motivated seller, acquire the contract, then find a buyer to close the deal. That’s the wholesale process in a nutshell. Seems simple enough, right? But there’s more to it than that, as knowing the process is just the beginning.
If you want to close deals, you need to learn how these steps are done. That’s what will determine if you’ll succeed in the real estate investment strategy or not.
In this wholesaling syllabus, we’re going to break down the process into 7 steps. This will be a lot of information to absorb in one go, so be sure to bookmark this article for your future reference. Think of this as your handy reviewer whenever you need to brush up on your real estate wholesaling knowledge.
The Real Estate Wholesale Syllabus
We will provide videos as a learning aid as we go through each step. Just like when we were in school, all you need to do is read and listen attentively. This time, however, you’re not working for high grades, but high gains. Are you ready for wholesaling class to begin? Let’s get to it.
Some places provide more wholesale opportunities than others. When choosing where you want to conduct your wholesaling business, these 3 factors will help you determine if the market in a given area is profitable:
It’s a Metropolitan Statistical Area: Large areas like Metro Detroit have a crazy amount of people, which will likely translate to higher real estate activity. So aim for areas with at least a million people to ensure that you have enough buyers and sellers to look for.
There are Many Older Properties: These properties sell for a cheaper price, since expensive maintenance and repairs aren’t factored in. But it also opens great opportunities for you to seek out properties that only need minor repairs and touch-ups before wholesaling to buyers.
There’s High Supply and Demand: High supply means there’s a lot of seller activity while high demand means there’s a lot of buyer activity. High real estate activity suggests an abundance of leads, providing more opportunities to close deals.
Take your time to carefully analyze the different areas you plan on wholesaling, as choosing the right market is paramount to your success. With all 3 factors present, you can bet there are deals out there waiting for you to close them.
Flipping Mastery TV’s Jerry Norton looks for two capabilities in wholesale buyers: They can pay in full and preferably in cash, and they are willing to close deals “site unseen.” These are ideal qualities any wholesaler would look for in a buyer, but where can you find them?
Rather than going to different places to find these buyers, Jerry makes it easier by narrowing his search to the spots where you can easily find them. With Jerry’s auction and property foreclosure hack, you’ll be throwing your rods in an ocean full of fish.
Here’s how it works: For buyers to participate in an auction and property foreclosure, they need to have the qualities Jerry Norton stated—they’re willing to close deals site unseen and can pay in full. In these property auctions, buyers don’t have a chance to view the property. And as soon as a bid’s accepted, the buyer has to immediately pay for the property being auctioned.
You can find these auctions online, at your county courthouse, or through third-party sales agents called trustees. Attend these auctions early for a chance to mingle with the buyers before the bidding starts. Some buyers stay after the auction, which can be another opportunity for you to get more contacts. Your goal here is to gather as much contact information as you can.
You can use this method for reverse wholesaling, too. Opposite of the traditional wholesaling process, you first find a buyer and then the seller. Attending these auctions also provides insight into what kind of properties ideal buyers look for. A surefire way to close more deals is by focusing on hot properties in the market and networking with capable buyers.
Although Jerry gives an effective hack to find and grow your buyers list, it’s always better to have multiple methods to choose from. Other strategies to grow your wholesale buyers list that you can try are cold-calling or partnering up with a real estate agent.
In wholesale real estate, time is of the essence. Therefore, it’s important to have methods in place that allow you to quickly connect with motivated sellers. How can you connect with more leads in a shorter time? Jerry Norton suggests a combination of inbound and outbound marketing so you can find and attract motivated sellers simultaneously:
Outbound Marketing
Actively seeking out motivated sellers with wholesale real estate lead generation strategies like cold-calling or driving for dollars are classified as outbound marketing methods. With outbound marketing, wholesalers generate leads by finding them.
Inbound Marketing
On the other hand, inbound marketing methods aim to bring these motivated sellers to you by means of attracting them. Leveraging networking and online marketing tools such as Facebook or Google ads is a great way to be visible, providing motivated sellers opportunities to approach you.
There are also motivated sellers who aren’t so active online, so you can catch them with traditional inbound marketing methods like bandit signs.
Getting the property under contract signifies half the job is done. Once you get the property under contract and have control over the property, you just need to find the buyer and finalize the deal. Here’s how David Dodge gets properties under contract:
Send the Sample to the Seller: Sellers can better assess whether they’re making a good deal if they have a copy of the contract they can review.
Get the Contract Under Escrow: Assuming you and the seller have finalized terms, clauses, and signing, you then have to get the contract approved by a title company and pay a fee.
Send the Receipt back to the Seller: Once your contract is processed and recognized, you send the receipt back to the seller to show that you are legally bound.
Remember to carefully set the terms of your contract. For the deal to go smoothly, all parties must be in full agreement of all clauses and conditions.
Lili Thompson is a 25-year-old YouTuber that shares internet-based wholesaling techniques. For finding cash buyers online, she uses websites like ProStream and Zillow. However, access to these websites comes at a cost, but Lili suggests it’s worth it to close deals.
Her process starts by using ProStream, an online software that helps you find distressed properties. The software lets you highlight an area on a map and shows you properties for sale, auction, foreclosure, vacant, and other real estate classifications. More importantly, ProStream also provides a tab that shows all the cash buyers in the selected area.
Lili specifies her search by choosing the filter “flippers” on the Quick List Choices options of the filters. She says she looks for flippers since they need wholesale properties to flip. To find matches with the current properties she needs buyers for, she also puts a filter for the property type and price range.
After her specified searches provide what she’s looking for, she saves the results using the listing tool of PropStream. She ends the PropStream portion of her process by using the Skip Tracing feature to extract all the contact information from her saved list.
In reference to the video, she got 17 contacts priced at $.25 per contact!
With the property and contact information she extracted, she begins the next part of her process using Zillow, an online real estate market software. She inputs property information from her PropStream list and assesses these on Zillow. If she finds the types of deals she’s looking for, she makes contact using the contact information of the corresponding property.
Her process can be daunting for first-timers, but it’s a fast way to find the cash buyers you need in just a few clicks once you get the hang of it. Lili shares a great method, but remember that you should always have different lead generation marketing strategies to grow your buyers list and market your wholesale properties as well.
There are two ways wholesale deals can happen: First, you buy the property from a motivated seller and then sell it for a higher price to a buyer. Second, you work as a middleman by acquiring the contract from the motivated seller and then assigning it to a buyer for a fee.
Of the two options, the second one doesn’t require money out of your own pocket, making it preferable for wholesalers. Although margins are small, if done properly as a business model, this can provide a constant stream of income given you put in the time and effort.
In addition to the contract made with the seller, you’re going to add your part. The additional page states your transference of the contract to the buyer with a fee. For instance, the contract with the seller states the sale of the property for $100,000.00. Your part of the contract states a total of $115,000.00, making your fee $15,000.
Wholesalers in Oakland County often use contract assignments, but different states have different regulations for this method. REtipster warns that in other states, contract assignments are allowed only by licensed real estate agents. If you’re in one of these states and you’re caught assigning contracts, you can be imprisoned for practicing without a license.
REtipster gives a reminder to carefully check the terms, clauses, and liabilities stated in the contract (like this one from Quora). Creating a contract that protects your well-being is a security step you cannot miss in real estate wholesaling. You can use these contracts as leverage in case other parties aren’t fulfilling their obligations or withhold necessary information.
When everything is clearly communicated and all parties are in agreement, it’s a win-win for everyone.
Once all the wholesale real estate contracts are finalized and signed, the last step to closing the wholesale is to get it approved by the title company. Take note that the state of Michigan uses title companies, but other states may use escrow agents or closing attorneys. Regardless of the different names, these entities all serve the same function.
Assuming all goes well and your contracts are recognized and processed, the title company will either wire or send your fee to you. They will also be the ones to transfer the money from the buyer to the seller. After you receive your fee, consider your wholesale real estate deal closed.
Congrats! You’ve Graduated in Real Estate Wholesaling
You’ve reached the end of our free online real estate class on wholesaling. Whenever you feel like you need a refresher, you can always come back and review the 7 steps to successfully closing wholesale real estate deals.
Now that you have a deeper understanding of the wholesale process and some methods you can use, you’re ready to build a successful wholesaling career.
Is there anything else about wholesaling you want us to take a deeper dive into? Leave a comment down below and we’ll catch you next time!
It’s no secret: wholesaling can be a lucrative real estate investment method to earn a profit with minimal capital. On average, you can make around 5-10% of a property’s market value if you wholesale an undervalued home—that means you’re looking at a profit of $10,000 to $20,000 with a $200,000 home if you can get it under market value!
However, getting a slice of this pie does not come easy. Contrary to popular belief, real estate wholesaling takes a whole lot of skill, patience, and elbow grease.
For example, you need to find a property with a motivated seller, then find a buyer for it, coordinate all the paperwork required, complete the deal as soon as possible, and repeat everything again. You also have to simultaneously grow and maintain your buyer’s list so your business doesn’t come to a halt.
In other words, there’s a lot to keep track of when dealing in wholesaling.
But there is a solution to it: Make a list! Just like most projects in life, it’s easier to streamline the wholesale process if you have a checklist to guide you. That’s why we’ve written this ultimate checklist for wholesaling real estate—perfectly designed to help wholesale investors like you.
The Wholesale Checklist
Having a guide to the step-by-step requirements of a wholesaler can make the entire procedure easy as pie. But we do understand that not all of the things we’ll mention below will apply to you, so we advise that you focus only on the things that are most relevant to you.
Let’s get to the checklist!
A. Select a Market
Have you selected a market? Have you checked the trends of the current market?
Selecting a prime market can land you a hot deal. You want to find a market where there isn’t too much competition but is still highly coveted. In other words, try to find a balance—buyer markets that are on an upward trend without much competition to deal with.
Take for example Burlington, N.C. There’s a total of around 57 thousand brokers in North Carolina—far smaller than states like Florida with 212 thousand. But, the real estate market in Burlington, N.C. is booming right now. In fact, it is the 2nd most lucrative market in the US with listings only lasting an average of 35 days on the market.
You can only identify potential markets like these if you’re familiar with real estate market trends, so here is a quick jump-off point to get started:
Reference the MLS listings to get an idea of current trends in real estate prices.
Look for how long listings stay on the market. The less time on the market, the faster the turnaround for properties, and the better the situation for you.
Additionally, it’s important to know the median price of properties sold, so you know what you’ll be working with. For instance, in Burlington, it’s $295,000.
Once you’ve chosen your ideal market, you can move on to the next step in the checklist.
B. Build a Buyers List
Have you built your buyer’s list? Have you found any willing buyers in the area?
You’ll need a robust buyers list for a steady stream of good deals. Your goal is to continuously generate and follow up with the leads in that list so your wholesale investment becomes a growing business.
Create an online marketing campaign. Use social media and other platforms to get the word out on your name to build a potential buyers list.
Use customer relationship management platforms (CRM). Creating accounts on CRM platforms like Hubspot or Zillow can increase your reach to interested buyers.
Take note of buyer contact information and criteria. Make a note of the budget of your potential buyers and their contact info. When you find an appealing property, you can reference your list to see if the property coincides with the budget of one of your contacts.
By having an established and growing buyers list, you can increase the reach of your wholesale business which can lead to more deals and profits.
C. Look for Motivated Sellers
Once you’ve accomplished the first 2 steps, you can now enter the meat of the wholesale process: Finding a motivated seller with a property that coincides with the criteria of your interested buyers.
Now, in the industry, you’ll notice that distressed properties are popular for real estate wholesaling. There are 2 reasons for this: It’s easier to convince sellers to let go of their unkempt homes, and it’s easier to secure a larger discrepancy versus market price.
Use social media to create a marketing campaign for yourself.
Create a dedicated email address and/or phone number to screen incoming leads.
Once you’ve found a motivated seller. You then must hash out your wholesale contract.
D. Create the Wholesale Contract
Having found a motivated seller, you now need to finalize the wholesale contract. When creating the contract, you need to make it clear to the seller that you’re not buying the property.
You need to establish that you’re only finding an interested buyer for the seller.
Given that, be sure to establish the terms of what will happen if you fail to find a buyer. For example, you can set up an earnest money clause that will act as a guarantee. This clause will protect you and the seller in the event of failing to find a buyer. You will hand over an earnest money deposit that will act as a contingency that will be returned to you once the wholesale is complete.
Then, you need to find a buyer for the property.
D. Look for an Interested Buyer
Once the details of the wholesale contract have been decided, you then need to find a willing buyer. Be sure to thoroughly scope out the property to make it easier to find buyers.
For example, take photos of the property that shows potential buyers exactly what it looks like without having them visit the home. Additionally, take note of important details such as the number of rooms, the size of the property, and the overall condition of the property.
Once you’ve gathered all the necessary information, you should then do the following:
Send the property report to targeted buyers on your buyers’ list. Ensure that you send the property only to the buyers with the perfect criteria—or you lose their trust in the long run.
Like insurance, you can get in touch with local wholesalers to market to their own buyers. This expands your coverage, helps you grow your network, and makes it easier for you to sell.
Once you find a willing buyer, you can then move on to the contract turn-over.
E. Assign the Contract
With a willing buyer, you can then move on to assigning the contract. Here are the basic steps to remember when assigning a contract to a buyer:
Receive the amount necessary to purchase the property from the buyer.
Collect your earnest money deposit from the seller.
Turnover the buy and sell contract of the property to the buyer.
Enter into a new assignment contract with the buyer and collect your wholesale fee.
Contact an escrow company to complete the deal after the arrangements have been made.
Once the buyer has the contract, you can move on to the final step of the wholesale process.
F. Close the Deal
The escrow company will now oversee the process of transferring the property to the end-buyer. During this phase, you should keep in touch with the escrow company to get updates on the progress of the sale.
Once the sale is completed, the escrow company will turn over your assignment fee, and your wholesale will be completed.
Follow this Checklist to Make Your Wholesale Easy
Getting into wholesaling unprepared can be a recipe for disaster, and we don’t want that—not when real estate wholesalers already tend to have a bad reputation because of newbies making rookie mistakes!
But with the use of a checklist, you can avoid many of the pitfalls of wholesaling, increase your odds of landing a wholesale deal, feel less stressed with conducting your business and reap continuous profits from the many deals you’re scoring.
Take our list and make it your own! Good luck in your venture and feel free to comment on any other concerns you have in the comments section below.
You’re eating dinner with your family when your phone suddenly rings. Unfortunately, your tenant is calling to tell you of a serious problem—a burst pipe that has completely flooded the kitchen.
As emergency repairs go, landlords are required to immediately take action. Obviously, this is required for safety reasons and legal reasons. In this article, we’ll discuss how to approach emergency repairs so that you can use these in your landlord practices.
That way, you’ll be able to handle emergency repairs like a pro without ruining your weekend plans. Meet your obligations, keep your tenant happy, and protect your investment.
What is Considered a Landlord Emergency?
Before anything else, let’s review the landlord responsibilities in Michigan regarding emergency repairs:
As the owner of the property, landlords are expected to immediately address any dangerous situation that can lead to occupant injury.
Landlords usually do not have unpermitted access to the property during a tenant’s lease – except when a landlord can reasonably believe there’s an emergency issue.
You’re obligated to take action within 24 hours of the tenant informing you of the emergency. Otherwise, tenants can withhold rent, repair & deduct, file a lawsuit, or report to a public official.
Although the information stated above is from the state of Michigan, other states and cities will have similar rules and responsibilities. Now that we’ve brushed over the legal responsibilities, let’s proceed to what makes an “emergency repair.”
If left up to a tenant, anything that prohibits the tenant from living properly and comfortably on the property is an emergency. Legally, an emergency is anything that is likely to cause injury to a property occupant or visitor.
Here are a few examples:
A gas leak, as could cause an explosion or breathing problems, or poisoning.
Faulty or exposed wiring could electrocute someone or cause a fire that could result in occupant deaths.
A broken water supply line damages occupant possession and/or the property.
No heat during the winter months.
Non-emergency examples:
Sewer backup
No hot water
Minor water leaks
No electricity (unless it affects heat during winter)
List
The general rule to keep in mind is if it can wait until tomorrow, without the situation getting worse, then it is not an emergency.
Best Practices as a Landlord for Emergency Repairs
Now that we’ve covered landlord obligations, let’s dive into some of the best practices in handling and preventing emergency repairs, especially during the holidays. No matter what the situation is, here are some tips you need to keep in mind:
Always Be Prompt
The sooner you can fix a problem, the better. As much as possible, don’t let any repair needed last longer than 3 days. Be prompt when dealing with your tenants’ concerns, especially with emergencies. Being prompt will make your tenants happy and protect your property from serious damages.
Keep Up Your Professionalism
Always be respectful and accommodating even during the holidays. Chances are your tenant also doesn’t want to deal with any problems during these times. Remember to always conduct yourself professionally.
Determine if an Actual Emergency
Before taking the next steps, you need to make sure it’s a real emergency. Tenants might not be aware that some issues fall on themselves to fix. For example, some issues like a clogged sink or a broken element on the stove aren’t emergencies that need to be addressed immediately.
Set Expectations
Before anything, clarify what you are willing and not willing to do in the lease agreement. If your tenants know the extent of your abilities and obligations from the get-go, they won’t place any unreasonable expectations or call you up for repairs that they should handle themselves.
Have a Prevention Plan
The best way to deal with an emergency repair is by avoiding it completely. So, before the holidays come around, do a maintenance check to make sure everything is in order. Identify and deal with any problems you spot during the inspection to protect your property while saving time and effort.
Maintain Good Communication
Whether you can help or not, always keep an open line of communication with your tenants. Even if you can’t fix the problem right away (or the repair isn’t actually considered an emergency repair), picking up their calls and hearing their concerns shows your professionalism as a landlord, and encourages them to keep you updated with the conditions of your investment property.
Have Contacts for Emergencies
For situations that qualify as an emergency, keep a list of contacts with a description of their services. As mentioned earlier in the article, emergency repairs are typically water-related concerns.
With that being said, one of your emergency contacts should be a plumbing service with a description along the lines of “24/7 service including holidays.” However, if there aren’t any, resort to the next quickest option such as services that can be rendered on the next day.
Regardless if you can do anything or not, you still need to deal with your tenants and their concerns during the holidays. As long as you deal with your landlord’s responsibilities the best that you can, you can get the best possible outcome for emergency repair situations.
Be Prepared for Emergency Repairs
Emergency repairs can be a hassle, every day of the week. But by having good practices that help prepare you for such events, you’ll be well equipped to deal with them any time of the year. After all, you never know when a tenant will call for an emergency repair!
Got any more questions about emergency repairs? Let us know in the comments below!
Being a landlord isn’t all sunshine and rainbows. If you try to go in blind, inexperienced, and without proper knowledge—you’ll likely make dire mistakes that will ruin your bottom line.
Plus, doing some research online can only get you so far. You’ll get some bits of good information, but none will necessarily guarantee your success. No, you need to know how the pros do it so you can put yourself in the right direction towards becoming a successful landlord.
Not to worry, we’ve already compiled their “secrets” for you. No need to look elsewhere, here are the 5 things you should perfect to be as successful as the giants out there.
Screening is an important process for every landlord, so it’s of utmost importance that you have a firm grasp of how to properly screen potential tenants. Add to that, you need to abide by tenant screening laws to avoid potential lawsuits.
Generally, you need to keep these factors in mind when screening applicants:
Follow the Fair Housing Act, where it’s illegal for you to reject applicants due to race, sex, disabilities, and other discriminatory factors.
Perform rigorous background checks on their credit history and criminal records.
Once you make sure to abide by these laws, you should make a checklist for your ideal tenants. If your screening process is rigorous, you’ll end up with much better tenants. They’ll pay rent on time, take care of your property, and abide by everything in the lease agreement.
2. Successful Landlords Have a Well-Written Lease Agreement
You need to be specific when writing the lease agreement, otherwise, you might run into confusion later on. List down all the things the tenant can do, all the things they can’t, from having pets to subletting. That way, there aren’t any misunderstandings down the road.
A good contract will make sure to include terms like:
Names of all the tenants
The maximum occupancy
The terms of the lease
The monthly rent
Deposits and fees
Other terms you might include in a lease agreement are:
Pet policies
Parking arrangements
Allowed renovations
Subletting conditions
Property maintenance
Pest control schedule
With a thorough lease agreement, you can protect yourself, maintain your assets well, and be confident that your tenants will support you in your rental business.
3. Successful Landlords Manage Their Property Professionally
How else do you keep good tenants? Well, you do so by being professional at all times. Trust us, this goes a long way in keeping your tenants happy and satisfied enough to stay longer.
Here are a few pointers to keep in mind when managing your tenants:
Make it easy for your tenants to reach you. Ensure that they have your contact details and are fully aware of what situations call for immediate action.
Keep on top of tenant emergencies like repair requests, so the property remains habitable and you solve issues before it turns into an expensive repair.
Don’t be afraid to evict those who defy the lease agreement, such as:
Not paying rent on time or in full
Does major property renovations without your permission
Conducts an illegal business in your rental property
Causes excessive property damage (e.g., broken structures, flooded bathrooms, pest infestations due to hoarding or garbage)
Instead, your goal is to establish and nurture a healthy landlord-tenant relationship where both parties are respectful. That way, tenants will stay longer and effectively stabilize your monthly cash flow and overall investment.
4. Successful Landlords Prioritize Keeping Good Tenants
Landlords don’t just find good tenants—they keep them. In fact, successful landlords are experts at keeping quality tenants around for a long time. For example, they’ll offer to upgrade selected amenities in exchange for renewing the lease.
Those incentives can include things like:
An internet connection upgrade
New flooring or furnishings
Improved HVAC system
New kitchen appliances
New in-suite laundry
While these do cost a pretty penny, doing so will reduce vacancies, turnovers, and maintenance. In other words, they look at the big picture and treat their tenants as they would want to be treated. By doing that, they’re less likely to look elsewhere leaving your rental vacant and not profitable.
Learn How to be a Successful Landlord from the Start
Successful landlords don’t waste their time and money on situations that they can avoid. Instead, they are proactive in figuring out ways to find quality tenants, keep them around for a long time, and list all obligations and expectations down from the get-go.
To give you a running start to becoming a great landlord, follow our tips! By running your rental property like a pro, you won’t have to spend unnecessary time, money, and effort to earn back your investment returns—and more.
Do you have any landlord tips for those starting out? Feel free to share them in the comments below!
Do you feel stuck with your knowledge of real estate wholesaling? Are you having a hard time finding good deals? Perhaps you don’t feel like books and podcasts are giving you enough inside information?
If you answered “yes” to any of those questions—then you’ve come to the right place.
Sometimes, conventional tools aren’t enough to keep you informed or find the best deals. Sometimes, the only way you can learn what you need to know is through unconventional methods.
For instance, social media provides a ton of information for you to grow as a wholesaler. With over 2.85 billion active users on Facebook, there are thousands of groups on the platform that bring wholesalers together, so everybody can learn and discover insights that only the locals know.
If you’re a real estate wholesaler in the City of Detroit, MI, here are some of the best Facebook groups you can join to expand your knowledge and grow as a successful investor in this day and age.
Facebook Groups, Your Portal to Expert Real Estate Wholesaling
With a user base that rivals large countries, it’s not hard to find wholesalers you can learn from. The site hosts an array of groups that talk about any topic under the sun—including the niche investment route called real estate wholesaling.
If you want to find local deals or ask for advice in navigating the Detroit market, these are the groups you should join to expand your network:
1. Metro Detroit Real Estate Investors Group – 12.7k Members
The Metro Detroit Real Estate Investors Group is just what it says—a group for real estate investors in the Metro Detroit area. The group was created as an extension of the monthly meet-up its members continue to have.
By joining the group, you open yourself to a community that knows the local wholesaling scene in the entire Metro Detroit area. You can reach out to them about local inspectors that offer great prices, where the best neighborhoods are for wholesaling, or even get connected to interested buyers.
And don’t worry, the group members are friendly and welcoming to newcomers. They even encourage people to share their wholesaling accomplishments. Generally, the group is a friendly place where wholesalers from all walks of life and level of experience are welcome to participate.
The only requirement for joining is for you to be a resident or have connections to the Metro Detroit area. So, what are you waiting for? Join the Metro Detroit Real Estate Investors Group!
How To Join:
Since this is a private group, you do have to do a few steps, but thankfully they’re quite easy. Simply answer the membership questions and agree to follow the rules. Then you’ll be approved within a few days.
2. Michigan Wholesale Real Estate – 35.4k Members
Are you looking for some off-market deals in the City of Detroit? Then the Michigan Wholesale Real Estate Facebook group is the goldmine of your dreams.
This group works more like a buy and sell group. Members will post property they have for sale and look for willing wholesalers or motivated buyers. They usually post off-market deals that you won’t find on the multiple listing service (MLS) or Zillow. That means it’ll expand your pool of options, giving you access to deals that you otherwise won’t even get to know.
If browsing online and driving around town proves to be unsuccessful, join Michigan Wholesale Real Estate to get insider information and grab some off-market deals.
How To Join:
This one is a public group, so you can simply click join and you’re in!
3. Wholesale Real Estate Investor Network – 26.3k Members
If you’re looking to network and build your buyers list, then consider joining the Wholesale Real Estate Investor Network, where you can do all that and more. While it’s focused on the Detroit area, that doesn’t stop you from learning from experienced wholesalers from different areas
The main goal of this group is to help its members find success in real estate investing, primarily through hosting off-market deals. For example, the latest posts on the group are offers for properties ready for assignment contracts. Scroll a bit more and you’ll find other posts from buyers looking for potential properties to buy, too.
If you’re ever in need of a new assignment contract or you’re looking for a potential buyer, a visit to the Wholesale Real Estate Investor Network might be the ticket you need.
How To Join:
This one is also a public group, so you can just click join and that’s it.
4. Real Estate Wholesale Investors Hub – 21.9k Members
In case you ever need some advice or want the latest wholesaling tips, you should join the Real Estate Wholesale Investors Hub. While the group doesn’t focus on the Metro Detroit area, you can join this group to expand your knowledge beyond your local area.
Many of the posts consist of people asking for and offering advice to members. That means it’s a great place for new wholesalers who want to learn about wholesaling and start networking. So, you’ll never find yourself at a loss when it comes to wholesaling.
If you’re even in need of extra wholesaling advice, visit Real Estate Wholesale Investors Hub and you’ll find tons of advice.
How To Join:
Yet again, this one is a public group, so you can click join and you’re all set.
5. Renegade Detroit Investment Real Estate Club – 3.2k Members
Lastly, if you ever wanted to join a group of like-minded real estate hot-shots, well the Renegade Detroit Investment Real Estate Club (RDI) is the perfect place. The group hosts monthly meetings where members can network with one another. Together, they share stories and give each other helpful real estate investment tips for wholesaling in the Detroit area.
If you’re a fan of podcasts, you’ll feel at home at the RDI. The group’s founder, Jeremy Burgess, is a local podcast host. And hey, if you ever have any interesting anecdotes about wholesaling—who knows, you might be the next guest on the RDI podcast!
How To Join:
This one is a page, so you don’t need to join it as a group. Instead, just “like” the page and you’re ready to go. Soon, you’ll get the latest scoop on all things about real estate wholesaling.
Improve Your Wholesale Deals Through Facebook
It can be a challenge to learn about real estate wholesaling through conventional means. Books and podcasts inevitably become outdated over time. Not to mention most of them aren’t specific to the City of Detroit—which means you won’t get much insider information.
But through Facebook groups, you can find prime off-market leads in the City of Detroit, get access to information that only the locals know, learn from others who’ve already experienced the worst, and talk with successful wholesalers for the best advice.
Join the groups we’ve listed above and start to get answers to all your burning questions!
Do you have other Facebook groups to recommend? Leave a comment below so others can join as well!
Getting better at house flipping can be an essential tool for becoming a successful flipper. Gathering info from books and other resources helps expand your knowledge in the flipping game. Plus, learning from experienced flippers can give you a huge leg up against competing flippers.
But, you don’t have to limit yourself to books. These days, Youtube is a great learning tool. In fact, 7 in 10 Youtube users use the platform to learn. And it goes without saying, that you can gain a wealth of real estate tips from Youtube.
To help you get an upper hand in the house flipping game, we’ve collected 5 of the best Youtube channels to learn from.
5 Best House Flipping Youtubers
If you’re tired of reading books on real estate, well then Youtube is a great resource for getting the latest and greatest tricks in the house flipping business. But, you don’t want to just learn from some random Joe Schmo. You want to learn from someone with a wealth of experience.
That being the case, we’ve sifted through Youtube’s content library to find the best house flipping channels.
Joining the platform in 2008, Lex Levinrad is a veteran of the Youtube landscape. Not only that, but he’s also a veteran of the flipping game. According to Lex, he’s flipped over 1000 houses throughout his flipping career. Currently, he has 17 thousand subscribers and has a total of over 2 million channel views.
The Lex Levinrad channel will help fill gaps in your flipping know-how. For instance, his video on flipping a fire damaged property. In it, he gives tips about the pitfalls of buying a fire-damaged house and what repairs to focus on.
With the Lex Levinrad channel, there’s always something new to learn about flipping houses.
The HouseBarons channel is run by brothers Dave and Rich. They’re quite successful as Youtube creators considering their channel has garnered over 13 million views in its 10-year lifespan. Add to that, the HouseBarons gathered a healthy following of over 38 thousand subscribers.
On the HouseBarons channel, you’ll get find a large vault of very specific tips and tricks. Take, for instance, their tutorial on fixing a faulty door. After all, creaking doors that open by themselves might be something you don’t want to show potential buyers during a property tour.
All in all, the HouseBarons Youtube channel can be a great wellspring of knowledge.
If you’re just beginning your journey in the house flipping business, the Real Estate Investing Tips for Beginners Youtube channels can be a great instructor. The channel has over 720 videos that cover a wide variety of topics for investing in real estate. It has just a bit over 50 thousand subscribers and uploads regularly.
The channel has a series of videos dedicated to house flipping. There’s even a guide for how to start flipping with just $10 if you’re on a tight budget. From house flipping to wholesaling, you can learn a ton of real estate tips from this channel.
Learning from experienced flippers is a valuable experience that can’t be replaced. But some experts forget how to talk to beginners and can drown you in jargon. Thankfully, The Friendly Flipper channel makes this easy. With over 130 videos dedicated to house flipping, you’ll learn a ton and it’s all easy to digest content.
The Friendly Flipper host a range of videos from interviews with fellow flippers to flipping progress vlogs. For instance, in his latest series of videos, you can follow the entire progress of a flip over the course of just 7 days.
When you subscribe to The Friendly Flipper, you’ll get a great guideline for flipping houses.
Finally, BiggerPockets is one of the biggest channels on this list. In fact, it has nearly 900 thousand subscribers to date. And with over 2.3 thousand uploads, you’ll have a lot of content to digest.
On the BiggerPockets Youtube channel, you’ll get the full breadth of what it takes to be successful in the real estate business. While the channel covers the entirety of the real estate market, it isn’t lacking when it comes to house flipping. For example, one of their most successful videos is a series that goes through the house flipping process from start to finish.
Between securing funding to looking for the right property, you can learn a lot from BiggerPockets.
Expand Your House Flipping Knowledge with Youtube
There are a lot of avenues to explore when it comes to learning about house flipping. From reading a book to listening to experienced flippers recount their journey, you can pick up tips from almost anywhere. With this list, you can easily turn on a video to learn a little more every day.
Follow these 5 channels, and you’ll gain enough flipping knowledge to gain an edge over other flippers.
Investing in a short-term rental (STR) is a great way to make some additional income. In fact, according to 2021 figures, the average Airbnb host in North America can make $41,026 annually from a single rental.
But you need to be smart and focus on a lot of factors to earn that impressive amount.
For example, just picking a neighborhood can make or break your investment. While the right neighborhood with all the right conditions will give you high occupancy and rental rates, the wrong neighborhood will only give you high turnover rates—or worse, complete vacancy.
So, what are the right conditions that make a neighborhood perfect for STR investments?
Let’s discuss the conditions you need to consider when picking a neighborhood for your Airbnb.
What Makes a Good Neighborhood?
No one factor makes a good neighborhood. You have to consider several characteristics when choosing the area for your Airbnb. When you choose a neighborhood to invest in, look for:
Airbnb occupancy rate
Airbnb rental income
Airbnb rent averages
Cash-on-cash return
Each factor is as important as the next and they all have to come together seamlessly. For example, if you only take into account the Airbnb occupancy, you could see an 80% rate. But each tenant might be paying you a low amount—and that might not be worth the effort.
So, let’s define each factor and go through their details:
Airbnb Occupancy Rate
The occupancy rate measures the dates a property was booked versus the total number of days it is listed for rent. Factors like location, market saturation, and seasonality can affect a neighborhood’s occupancy rate.
Now, the average occupancy rate in North America is about 44%, but you’ll want to find areas that give an even higher number. Instead, focus on locations that have the highest occupancy rates such as:
Seaside, CA: 71.3%
Little Rock, AR: 75.0%
Phoenix, AZ: 64.1%
Los Angeles, CA: 55.6%
Columbus, OH: 60.6%
A quick search on Google will give you these numbers. If you find another neighborhood with a good Airbnb occupancy rate, you can consider investing in property there.
Airbnb Rental Income
The Airbnb rental income will determine how much income your property will generate over time. For you to determine the potential rental income you can earn in a neighborhood, you need to conduct a market analysis. Using market analysis, you can learn:
The real estate appreciation rates of the neighborhood
The current and upcoming trends of the real estate market in an area
If the neighborhood you’re scouting is suitable for an STR
If long-term rentals are more popular in a particular area instead of an STR
The overall demand for rentals in the area
Take, for example, Mashvisor’s heatmap. With this tool, you can see the average occupancy rate in Detroit. You can also get a glimpse into the estimated rental income of an Airbnb. After you perform a market analysis, you should have a good idea of what your Airbnb rental income should look like in that particular neighborhood.
Airbnb Rent Averages
This is the simplest metric you need to find out. You basically need to look at the average rent STRs are going for in a neighborhood. If you skip this, you might invest in an expensive property that’ll take too long to generate a good return on investment.
You can use Mashvisor to get a good idea of how much people are charging for rent on their Airbnbs. In general, you want to look-out for properties with similar specifications to the property you’re looking to invest in. Watch for things like:
The number of rooms
The number of beds and baths
The kinds of amenities available
The location (e.g., if it’s near tourist attractions)
Once you have a general picture of how much people are charging for stays in their Airbnbs, you get an idea of how much you can charge.
This will also help you estimate the maximum amount you should spend acquiring the property, as you’ll want to charge at least 1% of your total property price to recoup costs fast enough. For example, if a property costs $212,000, you’ll want to charge at least $2,120 for the monthly rent.
Cash-on-Cash Return
Finding out the cash-on-cash returns for similar Airbnbs in a particular neighborhood will give you an idea of whether investing in a neighborhood is worth it. Again, Mashvisor gives you the cash-on-cash returns of Airbnbs in a neighborhood.
To calculate your cash-on-cash return, you just need to follow a simple formula:
Let’s look at the potential CoCR of the listing we mentioned earlier, with an annual rental income of $25,440 ($2120 x 12) as an example. With a total cash investment of $200,000 and a safe estimate of operating expenses being 1/3rd of the annual rental income, it’ll look like this:
CoCR = (25,440 – 8395.2)/200000
CoCR = (17044.8)/200000
CoCR = 0.0852
For this particular example, the cash-on-cash return is 8.52% per year. This is within the benchmark for good CoCR, which is between 8-12%. If you find an area with a CoCR that measures within that range, it’s a good opportunity for your STR.
Pick the Right Neighborhood For Your Investment
Airbnbs can be a great investment opportunity. However, much like any investment, you need to invest wisely. Choosing the wrong neighborhood will put you at too much financial risk, and you might not see numbers anywhere close to the $41,026 average.
Do your due diligence, analyze your opportunities well, and maybe even consult with experts in the industry, and you can be confident in earning that $41,026—maybe even higher.
Do you think there are other factors to consider when choosing a location for an Airbnb? Let us know your insight in the comments below!
When conducting wholesale deals, contract negotiations become an everyday occurrence in your life. This means that if you aren’t knowledgeable about the requirements and details of wholesale contracts—you can end up losing a deal.
You have to be exceptionally familiar with contracts to be a successful wholesaler, which is why we’re writing this article to dive deep into the key paperwork you’ll need. Nail these on the head, and you can navigate through the world of real estate wholesaling with ease.
What is A Buy and Sell Contract?
Otherwise known as a purchase agreement, this is the contract you enter with the seller of the property. It acts as a legally binding agreement and outlines the terms of the offer between a buyer and seller in real estate transactions.
Your job as the wholesaler is to act as a middleman and find a willing investor to buy the property. That means to need to know how this is the contract permits them to purchase the home. Once you find a buyer, this contract transfers from you—the wholesaler—to the buyer.
The content of the buy and sell contract should have the following:
The date of the agreement
The name of the seller/individuals listed on the property’s title
The buyer’s name
Property address
The earnest money deposit.
The total purchase price of the property
Financing
Closing date and transfer of title
Escrow and closing fees
The buyer can be assigned to pay the fees
Or it can be the seller
Or they can pay equally
Or they can pay their respective escrow and closing fees
Signatures of you and the sellers
Date of signature
This list isn’t exhaustive, but these are the most relevant things you should pay attention to in buy and sell contracts. As long as you have these covered, you should be good to go.
Note that your buyer will also thoroughly examine the agreement before getting into the deal with you. As such, it’s best that you know your way around these contracts well enough to answer their questions and successfully close the sale.
What Is A Seller’s Disclosure?
The State of Michigan requires a seller to complete and sign this disclosure to accompany any and all purchase transactions. It’s meant to protect a buyer from seller misrepresentation about the condition of a residential property.
Since most sellers aren’t aware of this form, you’ll want to keep a copy with your buy-sell contracts. Do NOT ever complete the form though, for a seller—legally they must complete it.
The next one to know is an assignment agreement.
What is An Assignment Agreement?
An assignment agreement is a real estate contract that transfers your rights and responsibilities listed in the purchase agreement to your investor—the new buyer. Often, this can also be referred to as an “Assignment of Real Estate Purchase and Sale” agreement.
After signing this contract, the buyer will take over the purchase agreement, and you’ll be awarded an assignment fee. Only you and the buyer will receive copies of an assignment agreement since the seller is not involved in completing an assignment contract.
An assignment contract needs to contain the following:
The agreed-upon assignment fee
The assignor’s name
The assignee’s name
The date of agreement on the purchase contract
The names on the purchase agreement
Location of the property
Closing date
Assignee to pay the security deposit in escrow
Signatures of you and the buyer
Date of signature
Once the assignment contract has been signed and fulfilled, the investor will then take over the purchase agreement. After that, the buyer closes on the property and you’ll be awarded your assignment fee.
Wholesaling Contracts Made Easy
There’s a lot of paperwork that comes with wholesaling in the real estate business. If you get in over your head and gloss over every other contract you get into, you can end up losing your wholesale deals—or worse—alienating your potential buyers.
If you ask us, it’s just not a risk worth taking if you want to grow your wholesaling business.
With our help, you’ll have a good idea of how the contracts you’ll be dealing with regularly are done. If you need more help with wholesaling paperwork, feel free to reach out to us!
Have any questions about wholesaling contracts? Let us know in the comments below!
Wholesaling appeals to newbies in real estate because you don’t need any personal finances of your own to get started. It’s also possible to close a deal in as little as 30-45 days—giving many the impression it’s a quick and easy way to make money.
But that doesn’t paint the full picture.
While it may sound easy, many aspiring real estate investors end up quitting when the reality of wholesaling really dawns on them. Although the idea of finding a motivated seller and connecting one to a serious buyer sounds simple, it’s easier said than done. There’s so much more to it than that.
You aren’t just going to find a buyer and seller walking down the street. Wholesalers need to have good people skills because real estate is a social profession by nature. What’s more, unlike other real estate ventures, wholesaling is very time-sensitive. As a wholesaler, you have to be up-to-date with current real estate market trends, build a network, determine what’s a good deal, negotiate the deal, and so on.
So, before you go into the wholesale business and start investing yourself, you have to make sure it’s right for you. Let’s take a look at how you can figure that out by answering 5 questions.
5 Questions to Determine If Wholesaling is for You
Wholesaling is often seen as more beginner-friendly than other real estate investment strategies. Of course, it still comes without its own unique difficulties. Ask yourself the following questions to get a clearer idea if you’ll enjoy wholesaling, or if you might be better off trying something else.
Do you have a big enough network to find deals?
Wholesaling takes a lot of work, doesn’t have a regular income, and deals in progress don’t always close. To make it easier, you need to regularly build your network. As a beginner, you might not have enough connections to sustain yourself and find deals, making it far more difficult than someone with experience and connections.
But it’s not all bad. For those who power through and successfully grow their network, wholesaling can be a very rewarding career. With familiarity in the real estate market, a grown network, and a good grasp of the wholesaling process, it gets easier as wholesalers become more seasoned.
2. Are you willing to put in the work to close deals?
In wholesaling, to find success, you have to actively work for it. Closing deals takes a lot of effort. From finding a motivated seller to an actual buyer and everything in between—it all needs to be accomplished under time pressure. Wholesaling can therefore be very demanding, especially when the market isn’t hot.
Another thing you need to take note of is that income in wholesaling isn’t consistent. You earn only if you close deals. However, it’s also important to note that your income isn’t fixed. If you close more deals, you earn more, but if you don’t close any, you won’t make any money, either.
If you’re going to pursue wholesaling, you’ve got to be ready for all the mental and physical work it entails—and for the income to be less consistent than other real estate investments.
3. Doyou have the necessary people skills?
Closing deals relies heavily on your ability to be persuasive to sellers and buyers. Remember, they’re also making major financial decisions, and they’re not likely to do business with someone they don’t feel comfortable with.
In wholesaling, you need to be persuasive, but also trustworthy, so you can show that you have their best interests in mind. If you have good people skills, you have a better chance of convincing sellers and buyers to do business with you. And more importantly, increase your chances of closing more deals.
4. Are you up to date with the real estate market?
Wholesaling isn’t just a matter of finding any random property and convincing sellers and buyers to make a transaction. Wholesaling also entails that you do your homework.
You need to know the market values of different properties and what kind of properties buyers are looking for. Research and staying up to date with the current market trends are crucial. When you’re looking for wholesale properties, you should also always consider the buyer and make sure you are finding properties that they’re actually interested in.
5. Can you properly assess and make financial computations for properties?
Wholesaling relies on a lot of math. You’ll have to determine the right selling and buying price, the expected repair costs, profit margins, and so on. Getting the right figures is important to make sure that everything is done fairly. That way when any questions on the pricing come up, you can justify these with numbers and the correct figures.
Make Sure Wholesaling Works for You
If you want to excel in your career, you have to like your work and it has to be right for you. As Steve Jobs—American entrepreneur and co-founder of Apple—once said, “The only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle.”
If after asking yourself the questions you mostly answered yes, then congratulations! You’ve got what it takes to pursue wholesale real estate. But if after asking yourself the questions, you mostly answered no, then you may want to re-evaluate your plans.
Is there anything more about getting into wholesaling you want us to discuss? Let us know in the comments below!
