Categories
Wholesaling

Whole-Tailing vs. Wholesaling: Which One Should You Do?

Signing a contract for a wholesale deal
Photo by Romain Dancre

To get the most profits from the real estate business, you need to decide what kind of transaction and type of property best fits your resources and goals. After all, the most successful real estate investors don’t limit themselves to just one strategy. 

Now, wholesaling is a great way to get your feet wet in the real estate market. But, after dipping your toes in with wholesaling, you might also be curious to try other adjacent methods to the investment strategy—whole-tailing being one of them.

While wholesaling involves buying a contract from a house owner and finding an interested third party to purchase the home, whole-tailing is a hybrid of wholesaling and house-flipping. In a nutshell, a whole-tailer will purchase a distressed property, make quick and easy renovations to improve the value, then put it up on the market themselves. 

While a house flipper makes the finishing touches to an entire property, a whole-tailer only addresses the issues that are the most obvious, have a high impact on the price, and are easy to address. Then, they try to sell the property to a buyer willing to fix up the rest of the house themselves. 

Whole-tailing isn’t all that different from wholesaling. 

So, which type of real estate investment strategy should you focus on? 

Here, we’ll discuss the advantages and disadvantages of the two strategies for you to decide which type of method is more appropriate for your means. 

What is Wholesaling, exactly? 

Let’s start by refreshing our minds with how real estate wholesaling works. Wholesaling is a short-term real estate transaction where the investor looks to make a profit with very little capital investment. Here’s how that typically goes: 

  1. The first step of a wholesale deal is to find a good deal on a property with a motivated seller. You’ll then execute a purchase and sell agreement with the seller, who is usually the homeowner.
  2. During the execution of the contract, both parties will agree on an earnest money clause. This clause allows you to deposit a sum that serves as your collateral for finding a buyer. If you can’t find a buyer within the allotted time, you will lose your earnest money. 
  3. The next step is for you to find a willing buyer for the property. Once you’ve found a willing buyer, the both of you will enter an assignment where the buyer will take over your role in the purchase and sell contract. 
  4. Lastly, the buyer will pay the agreed-upon value for the property and your assignment fee—also known as your wholesale fee or wholesale profit.

Here’s an example to illustrate what a wholesale deal looks like. 

You find a homeowner willing to sell his property for $55 thousand, so you enter into a purchase and sell agreement with him. You then find a buyer willing to purchase the house for slightly higher at $65 thousand. Once you find a willing buyer, you’ll enter a signed agreement with them and they’ll assume your position on the purchase. 

Finally, you’ll close the deal with the buyer and homeowner, where the buyer will pay $55 thousand to the seller and $10 thousand to you for your assignment fee.

Advantages of Wholesaling 

Now that we know what the process of wholesaling entails, let’s discuss some of the advantages that wholesaling provides. This will help you see the most important benefits that you’ll get with this method: 

  • It’s the most pain-free way to get into real estate investment. You can learn the basics of the real estate market without much risk. 
  • You’ll earn profits in a short amount of time. The wholesale process is relatively quick in comparison to other real estate transactions such as house-flipping or whole-tailing, taking between a week to a month before you can pocket your profits.
  • You’ll have high rewards with low risks. You don’t need a large amount of capital. In fact, you sometimes don’t spend anything when conducting a wholesale transaction. That said, most experts agree that you can see profits of around 5-10% of a property’s value.   

Disadvantages of Wholesaling

Wholesaling comes with a lot of advantages, but that doesn’t mean it’s a guaranteed prospect. Let’s take a look at some of the disadvantages inherent to wholesaling.

  • Wholesaling tends to have a negative stigma. Because wholesaling is the gateway to becoming a part of the real estate business, it often attracts inexperienced people looking for quick and easy profits. Inexperienced wholesalers can commit mistakes such as overestimating a property’s ARV or underestimating the estimated repair costs (ERC).  
  • Wholesalers face trouble if they can’t find a buyer. If you can’t find a buyer within the allotted time you and the seller agreed on, you will lose your earnest money deposit. 

What is Whole-tailing, Then?

As mentioned before, whole-tailing is an in-between of wholesaling and house flipping. 

In a whole-tail deal, you’ll still buy a distressed property from a motivated seller. Unlike wholesaling though, you won’t be finding another buyer to purchase the property. Instead, like a flip, you will be renovating the property then will try to sell it yourself. Unlike flipping a house though, whole-tailing involves making minimal repairs to get the house sold as soon as possible. 

Those minimal repairs are done to address the most visible and unattractive problems that negatively impact the value. Once you’ve made the repairs to make the property mortgage eligible, you can start searching for the perfect buyer. 

Your dream buyers are usually homeowners willing to fix it up themselves. However, you can also sell it to a new house flipper as well for them to finish the project. 

Now, right off the bat, it’s clear whole-tailing requires more time and effort to generate good profits. You need to do a thorough examination of the property to determine which issues need to be addressed. Remember: You aren’t fixing everything, just the most important things. 

This is not a skill that many people have—which is why wholesaling is more common.

All that aside, if you have the expertise, whole-tailing a property can be a more profitable option than wholesaling. Instead of just earning an assignment fee, you’ll be earning the entire amount of the property. If you’re confident that you can:

  1. Afford to buy the distressed property
  2. Perform quick repairs on the house
  3. Put it up for sale and entice potential buyers

Then, whole-tailing can potentially be a lucrative venture for you.

Depending on the state of the property and the amount of money you’re willing to invest in a property, whole-tailing might be a more profitable option. 

Advantages of Whole-Tailing

Whole-tailing is considered a riskier investment than wholesaling. You’re risking more than earnest money when dealing with a whole-tail. But, that doesn’t mean that whole-tailing is a worse option than wholesaling. In fact, it comes with some benefits like:

  • Wider buyer pool than wholesaling. When conducting a whole-tail, both regular buyers and investors are both be interested in your property. This is in contrast to wholesales, where investors are your primary market. 
  • Higher potential profits over wholesale. When whole-tailing, you have higher profit margins than a wholesaler. In a wholesale, you’re looking at around 5-10% of a property’s value in profit. If you can whole-tail a property, you can see far more than that. For example, a property is up for sale for $50,000. If you wholesale the property, you’re looking at a profit of around $2500-$5000. But in a whole-tail you can potentially make more than that. Here’s a simple breakdown:
    • Property bought at $50,000
    • Repair costs of wiring and plumbing: $8000
    • ARV: $80,000
    • Estimated holding costs: $1000
    • Estimated resale fee: $4800
    • Total costs: $63,800
    • Gross profit for a whole-tail: $16,200       

Disadvantages of Whole-Tailing

Now, let’s take a look at some of the disadvantages of whole-tailing. You might earn more from whole-tailing than wholesaling, but it isn’t all sunshine and rainbows:

  • Riskier than wholesaling. In a whole-tail transaction, if you’re unsuccessful in selling the property, you’re looking to lose all the money you invested in the project. 
  • Whole-tailing requires more capital than wholesale. You also need to consider the purchase price and the repair costs when conducting a whole-tail investment, compared to a wholesale deal where you can make profits without any capital. 
  • Holding costs. You will have to deal with property holding costs if you plan to make it a whole-tail investment. When whole-tailing a property you’ll need to deal with the expenses that come with having a property. This means dealing with any utility fees or homeowner association fees. 

Wholesale or Whole-tail? Both Sound the Same But Are Very Different

If you are new to the real estate business, wholesaling can be a good introduction. It is a low-risk, high-reward deal that can get your toes wet in the real estate market. You can learn the ins and outs of the business in a relatively low-risk situation. 

But if you have the adequate know-how to conduct a whole-tail transaction, it might be the better option for you. You can earn greater profits in a whole-tail deal, making it a more attractive choice if you have the knowledge and the means.

At the end of the day, the best option depends on how well-versed you are in real estate—and how much money you’re willing to invest to earn a profit. Be clear on that before you get started, and you’ll have the highest chance of succeeding in your real estate investment venture.

If you have any questions or suggestions, feel free to leave them in the comments section below! 

Categories
DIY Landlords

Investing in Real Estate from a Property Manager’s Perspective

Executive Summary

Many real estate investors self-manage their properties and I did too learning from my experience as I went. However, professional property managers have a lot of experience to help both new and seasoned real estate investors make the best investment and property management decisions. I asked my property manager, Jill Powell, of 1st Choice Real Estate, PLLC to share some of her insights into what investors should be considering.

Property Management Considerations Before Purchasing

Interestingly, all of the suggestions from my property manager come before purchasing the property. Thus, education and preparation are key to success in real estate investing. However, from my own experience, there are things that you just cannot anticipate and only experience teaches you.

15 Things to Consider Before Making that Next Purchase (in no particular order)

  1. New property investors should not buy older homes that have been turned into multi-units with all utilities included. These properties are often efficiencies or one bedroom units with transient tenants. You will have sky high turnover and sky high utility bills. Plus, you can’t hold anyone responsible for leaving the junk sofa on the curb that you now have to pay to have disposed.
  1. If you buy in a college town, have the parents co-sign.
  1. Always run prospective tenants’ credit and have a good way to score the rest of the application findings. Make sure the application is complete and all steps followed—no cutting corners or exceptions.
  1. If you don’t have a lot of spare time or don’t enjoy tenant calls at 3 a.m., when their heat goes out in Michigan in the winter, think about hiring a property manager. After self managing at first, I now buy my properties with the intent of having a professional property manager help me run my rental business.
  1. Use a cashflow or deal analysis spreadsheet prior to writing your offer. My property manager has seen many out of area investors pay for inspections only to walk on the deal once they find out what the local taxes will be after buying, local cost of the rental licensing and the true cost of rehabbing the property. It pays to have a professional on your side. I always have my property manager weigh in and be involved prior to making any offers. They are a valuable part of my team.
  1. Use a local Realtor who specializes in rental properties. They can tell you not only what is happening with property values and market rents in the area but also things like is there a moratorium prohibiting rentals in that subdivision, a limit on the number of unrelated persons in a property or a limit on the number of pets a tenant/owner can have in a property in that area. 
  1. Get the details from your lender before making the offer so you have the exact downpayment number as this will affect your rate of return.
  1. Start slow and learn from each property.
  1. Investing in real estate is not a way to earn “passive income.” It is a very time consuming business unless you use a property manager.
  1. Be cautious purchasing rental properties with tenants in place. Ask for a tenant ledger. Ask for current photos or, better yet, inspect all units personally. Look up rental/tenant violations for the property historically. Drive by the property at multiple times of the day to see how the tenants maintain the property.
  1. Research rental rates for the area. Just because the listing says they can get a certain rent doesn’t mean they actually are—verify it against market rents.
  1. Know the local laws regarding “discrimination based on income source” for things like section 8 vouchers.
  1. Decide if student housing is right for you. You will have high turnover, higher costs to get the property ready to re-rent and potential issues locally if the tenants like to party.
  1. Have a good CPA. They can help save you a lot of money and understand the tax implications of the investment.
  1.  Make sure you understand the local rental laws where you purchase property.

Conclusion

A professional property manager is a valuable part of any real estate investor’s team. Even if you self-manage your properties, you can learn from their experience to make the best investment and property management decisions before you buy your next property.

About the Author

Categories
Flipping

Top 5 Real Estate Flippers to Learn From (Part 3)

Image by Matheus Bertelli from Pexels

To quote the founding father of the United States of America, Benjamin Franklin, “An investment in knowledge pays the best interest.” 

When people learn more about the things they venture into, they can do it better. However, it’s also important to consider who you learn from. The better the source, the better your improvement. You want to learn from teachers with plenty of experience and successes in their careers. 

But who are the “good teachers” of house flipping?

In this article, we’ll be talking about some successful flippers, their stories, and their valuable insights. With the right mix of information and inspiration, you too can follow in their footsteps. Read through the list below and find out who you should be following to step up your flipping game.

Mike Cantu

Based in Southern California, Mike Cantu runs a buy and sell operations, deals in wholesaling, and manages his own portfolio of rentals. As a successful figure in the industry, he aims to teach others through books he’s written: Don’t Get Voted Off Real Estate Island and Rental Management and Properties. Apart from books, Mike Cantu teaches through talks in Southern California’s investment clubs.

Being an established figure in the industry, Mike Cantu has reached a point in his career where he wants to help others find success. Although he’s made it now, he took over 30 years to reach where he’s at today. He has two bits of advice for people trying to find success in the business: First, always be eager and dedicated to learning. And second, believe that it’s possible.

According to Mike Cantu, by constantly showing up to learn and believing in yourself, you can find success in real estate. If you’re interested to learn more about Mike Cantu or his courses, find out more here: 

Nick Manfredi

A household name in the real estate community of Southern California, Nick Manfredi is the CEO of the Manfredi Group. He’s also an expert when it comes to buying and flipping, as well as a speaker teaching others about real estate. 

Due to his accomplishments as an entrepreneur, he has even earned features in Fortune Magazine and Los Angeles Times. He’s well-established now, but he overcame many hurdles and challenges over the years to get there—all of which made him the experienced expert that he is today. 

His advice for those starting in the business is to do business with experienced people. By doing so, you can learn the ropes as you work alongside the professionals. That said, this is your chance to “work alongside” and learn from one of the bests—check out Nick Manfredi’s pages online:

Danny Johnson

Apart from being a top house flipper, Danny Johnson is also a best-selling author. In fact, his book Flipping Houses Exposed was the number 1 best-seller on Amazon. And for those of you interested in reading it, it’s free! He also has a blog, FlippingJunkie.com, where he shares his stories and teaches people about the flipping business. 

He started flipping houses in Texas and has now been doing it for over a decade. If there’s anything he wishes he could change early on in his career, it would be that he chose to flip houses he liked rather than flip the ones that investors would buy. His advice is to always consider the investor—not your personal preference. 

To learn more and learn from Danny Johnson, you can click on the following links:

Glenn and Amber Schworm

Husband and wife, Glen and Amber Schworm, started their flipping business in 2008. Fast forward to 2021, and they have bought, flipped, and sold over five hundred houses. On average, they flip about 38 properties a year! To teach and help others find success, they also host a podcast. On it, they talk about all the flipping business alongside other real estate investment tips.

Their top tip for those who want to make it big in the industry is resilience.  As they tell all their followers, “Your mindset needs to be all about getting things done no matter what obstacle is thrown in front of you.”

If you want to keep up with Glen and Amber Schworm, you can head over here:

Doug and Andrea Van Soest

The last entry on this list is another unit, husband and wife Doug and Andrea Van Soest. Their story starts when they first read the book, Rich Dad, Poor Dad by Robert Kiyosaki. After being inspired, they started pursuing their passions. In 2008, they started flipping houses in Southern California, and eventually they went on to invest in rental properties as well.

Today, they have bought and flipped over 140 properties and have over 40 rental units. When they were getting started, they only had one thing in mind: Keep going. They believed that to become successful, you have to actively chase it and make it your reality.

For more about them and their podcast features, you can refer to the links below:

Learn From The Best, Reach Your Best

Before any of these people were successful, they all had to work their way up. But it’s not work alone that got them there—it’s the right mindset, perseverance, and resilience. Once you’ve mastered those key things, it’ll get easier. 

By learning about some accomplished flippers and their insights, you’re already on the right path to finding your own success. You never know, one day we might be sharing your stories to inspire others as well.

Do you have another inspiring flipper in mind that you want to share? Let us know in the comments below!

Categories
Flipping

House Flipper Tips: Steps to Avoid Over-Improving Properties & Keep Profits High

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As someone who flips houses, one of your objectives is to appeal to buyers so you can close a deal. To make this happen, you make improvements on the property. But, more often than not, novice flippers overdo the renovations and subsequently end up with lower profits. 

They invest a lot of time and money only to have it backfire on them when they realize that they can’t sell it at a price that offsets their investment. In other words, they quickly notice that they’ve spent way too much. on something that the market isn’t remotely interested in.

In these cases, more isn’t always better.

Nevertheless, there is a solution to this problem. Read on to find out how you can improve your properties without falling into the common trap of over-investing in a fix-and-flip project.

5 Steps for Planning a Satisfactory Flip Project

Have you ever heard of the Goldilocks principle? The principle is based on the children’s fairy tale, The Three Bears, where Goldilocks is always looking for something that’s  “just right.” 

The moral of the story is to hit that sweet spot that’s not too much or too little. You can apply the same principle in a flipping project. Make just the right amount of improvements on a property so it appeals to more buyers, without spending too many unnecessary hours on it—or far more money than you should.

Here are 5 steps you can take to do this and increase your chances of success:

1. Assess the Property

Once you have a property in mind, you have to assess if it’s worth an investment. Here is a quick list you can use to get started:

  • Determine the After Repaired Value (ARV) based on the neighborhood
  • Determine the features of properties that sell quickly in that neighborhood
  • The property should have these main features that local buyers want
  • The number of repairs should be manageable, within your skill set or knowledge
  • Your quick evaluation budget should have at least a 10% margin of error
  • The ARV less repairs, less purchase price, should meet your profit criteria

If your prospective property meets the above criteria, the property you want is probably a good option for a fix-and-flip project. And it goes without saying that a comprehensive assessment of a property will help you determine the necessary improvements you’ll have to make.

2.. Study Properties in the Area

Do you have your eyes on a property already? Perhaps you’ve already purchased a property and are wondering how to make the most out of it? 

Well, the next step is to conduct in-depth research to evaluate similar properties in the local area. We are referring to the properties that have similar features and price points to your home, so you’ll have a baseline to decide on what to improve in your flip project. 

Scouting local properties is an opportunity to learn what buyers value. For example, here are some questions to answer as you assess properties competing for buyers:

  • Which rooms do they prioritize—kitchens, bathrooms, or living spaces?
  • What characteristics will make your property stand out from the others?
  • What features will make your property more valuable?
  • Are there building codes you need to follow?


By evaluating what’s already selling fast in the market, you won’t waste time and money on unnecessary improvements and your property will get the interest of a large pool of buyers.

3. Consult with a Professional

If you’re investing in an area that’s new to you, we suggest that you seek the help of real estate agents that have sold the most properties in that area. As local experts, they’ll be far more knowledgeable about what sells, at what price, and what to avoid. 

In other words, they are your right-hand-men for insights on planning your flip project better. They’ll know what buyers are looking for and the exact things to improve to sell quickly—enabling you to make the right improvements that will make your property a hot item on the market. 

Understand though, that you shouldn’t expect them to work for free – unless you want to ruin your reputation. So, you should either pay them for their time or agree to let them list the property for sale once ready.

4. Plan Your Budget

Based upon your research and feedback from area experts, you should have a renovation scope of work and now you’ll need to get bids for the corresponding pricing. 

Be prepared for some unpleasant surprises! It happens. When it does, you may need to figure out where you can cut back in other areas.

Once you’ve finalized your budget, you’ll also need to stick to it. This is probably the biggest challenge! You can easily get caught up in “budget creep”, where you spend a few extra dollars here and a few more there, and don’t track these extras until completion. Then you get a nasty surprise that those dollars add up to thousands and ruin your projected profit.

Have a budget in mind of how much you can invest in your flipping project, including the acquisition cost and estimated repair costs (ERC). Only when you have these, can you find properties that fit within your budget and will give you the expected returns.

For example, you can use the industry-standard 70% rule in your budget planning. The 70% rule states that you shouldn’t spend no more than 70% of the after repair value (ARV) minus the costs of repairs on a property. 

Let’s say your total budget is $100,000. You should then be on the lookout for properties that come out at around $100,000 after applying the 70% rule, which means the purchase cost shouldn’t go above $75,000 and the renovations shouldn’t cost more than $25,000.

Using the 70% rule helps you estimate the price range and renovation costs you can afford. That way, you only work within your budget for guaranteed flipping returns.

5. Do Only What’s Necessary

When you’re renovating a property to get it “just right,” you need to focus on the essentials. Keep in mind that you don’t have to go out of your way and make drastic improvements. As long as you cover what’s necessary, the property will be good to go. 

These are what you to focus on when flipping a house:

  • Ensure that electrical wiring and plumbing systems are functional
  • Confirm that foundational factors such as walls, floors, and ceilings are in good condition
  • Make the house look presentable by conducting a deep cleaning and adding a fresh coat of paint

Also, take note to invest in good quality items that are reasonably priced. Splurging and overdoing these things is extra work you don’t need to do, but you do still have to show potential buyers that the house has durable, functional items inside of it.

Moreover, doing too many improvements can elevate the price of the property beyond the buyers’ budget. For example, having a glorious fountain with a group of goldfish in the backyard will only jack up the cost without adding any value for the buyer.

So, just like Goldilocks, you need to make sure the property is just right.

Conclusion

Going above and beyond won’t pay off in the flipping industry. Instead, focus on making the right level of improvements to increase your chances of a successful project that will give you the highest profits. As a  real estate investor, financial viability will always be top priority. 

Bonus

We recommend developing the knowledge to have a rough idea of renovation costs before offering on a property. You should find some example properties and develop a budget to renovate 2-3 sizes/styles of kitchens and baths. You should know about how much it costs to replace a window, exterior and interior doors, the cost of painting per floor plan square foot, what roofing costs per “square”. If you don’t know what something will cost, you should either have a contractor you can quickly contact for pricing or pass on houses that need that type of work until you can develop estimated pricing for that issue.

Did we miss anything? Let us know in the comments below! 

Categories
Shortterm Rentals

Post-Pandemic Challenges and Opportunities

If you have a short-term rental, COVID-19’s travel restrictions likely had a negative impact on your short-term rental investment.

The pandemic challenged everyone’s travel plans all across the globe last year. In turn, travel-related businesses, such as short-term rentals, initially took a major hit and saw business declined. Many markets rebounded relatively quickly, but COVID challenges haven’t fully disappeared yet.. 

Although we are finally regaining our freedom to travel, the World Health Organization (WHO) still advises that individuals and business owners engage in their COVID-19 safety measures. This includes avoiding crowds, spreading high traffic areas out, and cleaning surfaces which many people touch. 

With all this in mind, there are new challenges for short-term rental investments in the post-pandemic world. But, there may just be some new opportunities as well. 

Challenges for Short-Term Rentals

COVID-19 has brought an increased focus on hygiene, cleanliness, and even crowd density. These days, people are still advised to avoid public places, where cleanliness and social distancing can be compromised. 

This means that if your short-term rental property does not meet the current standards for cleanliness and safety, you may find it challenging to rent out your property. You’ll need to make your rental property a desirable option for people and that it keeps their health and safety in mind.

We suggest you prioritize the following aspects:

  • Cleanliness: Now more than ever, having a clean rental property is a key factor in getting booked in the post-pandemic world. Since the spread of COVID-19 can occur due to unsanitized surfaces, people want hosts who go the extra mile to make sure it’s well cleaned. 

Make sure to highlight your cleaning policies in your posting, and in great detail. You want to show them you care about their needs and will go above and beyond to make their stay with you safe.

  • Pandemic Measures: Another consideration is how your property provides safety measures for the pandemic. Onlookers feel safer when they know that rental property owners promote practices to mitigate COVID-19. Leaving extra bottles of hand sanitizers in different rooms, Lysol wipes, bottles of surface disinfectants, and even complimentary masks, can help your property stand out in the sea of online options.

For the general safety of your guests and yourself, there must be a strict adherence to these standards of cleanliness and safety. More so, even if you do your part, your guest might not. So another set of challenges are the ones presented by guests themselves.

  • Unsafe Guests. To keep yourself and your rental unit safe from COVID-19, you have to examine your guests thoroughly and pick them wisely. For example, Airbnb’s COVID-19 guidelines align with the current advice provided by authorities. Guest bookings for a stay after exposure or after testing positive are not allowed. 

Always keep yourself updated with the guidelines and advice regarding COVID-19 and apply these measures when booking guests. 

Opportunities for Short-Term Rentals

While there are some new difficulties for STRs, there are also some opportunities for short-term rental property owners. Here are some things you can promote about your rental property to make it a hot pick for people’s vacation or business plans in a post-pandemic world:

  • Preferred Lodging. As you already know, the way people travel has changed immensely due to the pandemic. Locations that involve high-traffic areas where the virus can easily spread are still advised against by the WHO. As such, places like hotels, restaurants, and public markets are categorized as higher risk.

Luckily, when weighing the pros and cons of hotels versus STRs, an STR is considered safer and more preferable. Due to an STRs exclusive nature, it minimizes the risk of contracting COVID-19 from strangers staying at the same location. 

In addition, guests don’t share facilities and spaces with other guests, so both airborne and surface contamination is far less of a concern. As long as you do your part and keep your rental unit clean and safe, your rental unit will be the preferred choice for bookings.

  • Local Attractions: Most short-term rental properties cater to people looking for lodging while they’re on vacation. And when rental properties are designed to cater to these people, the surrounding area usually provides options for all sorts of activities for guests to enjoy. 

Some may look to retreat in nature, while others want to explore a new city. Whatever options and activities your short-term rental property provides, you can advertise. 

Since short-term rental properties are a safer option to stay in for holiday, more people are shifting to this option. Pair that with the resurgence of traveling, and you can expect that your short-term rental property will be fully booked!

Want to keep doing business? Keep up with the changes!

COVID-19 has brought many unexpected changes in the way people travel—including what kind of short-term place they want to stay in during vacations and trips out-of-state. But these changes aren’t all bad, as the safety measures that go along with COVID-19 can actually heighten the attractiveness of your short-term rental properties if you can make them stand out from the crowd.

The pandemic may have negatively impacted your short-term rental investment, but that’s all about to change. If you deal with the challenges and seize the opportunities given the travel changes, your investments can make a comeback. 

Did we miss anything? Let us know in the comments below!

Categories
Uncategorized

Wholesaling Real Estate With Minimized Risk: Reverse Wholesaling Strategy for Surefire Deals

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Are you looking for different opportunities to generate more income? Taking on similar real estate projects that use a skill set you already have is an advantageous way to create more avenues of income. So, if you’re a seasoned wholesaler, you might want to consider reverse-wholesaling.


What is reverse-wholesaling?


Reverse-wholesaling is when you focus on finding out what a flipper or landlord wants and then start prospecting for motivated sellers with properties that match. Just like in wholesaling, the motivated buyer will purchase the property as is, without any repairs or touch-ups. And just the same, reverse-wholesalers earn through the margins they make from linking a buyer to a seller.


How is reverse-wholesaling different from wholesaling?


You might not even know it, but you could have already done a reverse-wholesale deal! The difference between reverse-wholesaling and wholesaling is that the order in which you look for deals reverses—instead of first looking for a motivated seller, then a motivated buyer, you first look for buyers/investors, then find a motivated seller that has what they want.


Are there benefits to reverse-wholesaling compared to traditional wholesaling?


Here are 3 benefits that you should know if you’re considering reverse-wholesaling.

No Mortgage Concerns. In traditional wholesaling, buyers sometimes try to purchase the distressed seller’s property through a mortgage loan. But here’s the thing: It’s not always approved. You got everything lined up and ready to go, only to disappoint yourself and the seller if the buyer can’t go through with the plan. It’s stressful for everybody in the process.

Reverse-wholesaling eliminates this problem, since the strategy requires you to build a list of serious buyers with the cash to purchase before bringing a seller into the deal. With one less factor for a deal to fail on, reverse-wholesaling provides more assurance that the deal will push through.

Faster Closings. With buyers ready to pay in cash and the motivation for a distressed seller to quickly get a full cash payment, reverse-wholesale deals close much faster than traditional wholesaling.

More so, since deals faster, you have more time to focus on other projects and investments. As the saying goes—”time is money.”


Less Concern Over ARV and Repair Estimates. Inspecting a property, noting down what needs repair, and calculating for the repair estimates and after repair value (ARV) can be a tedious process. Apart from that, what needs repair and how much you will budget for them depends on your subjective assessment.


In reverse-wholesaling, buyers are more involved. When inspecting the prospective property, they may even send their own contractor to take note of the properties’ state. Buyers also decide on the extent of repairs they want, which might not align with your personal assessment. If you come by an investor that works this way, it takes the burden of inspecting, assessing, and calculating off your shoulders.


In addition, you can also learn from contractors and how they inspect to improve your inspection and assessment skills.


Skip the Listings. If you didn’t already know, it’s illegal to advertise a property that isn’t yours unless you’re a licensed broker or a real estate agent. Sometimes when looking for buyers, you may resort to putting the property up online to attract buyers instead. With reverse-wholesaling, the deal starts with the buyer, so that eliminates the need for postings and listings.


Challenges. Really the only challenge is making sure you’re dealing with serious buyers that have the cash to buy once you bring them a deal. No one has an endless supply of funds, so you should expect a buyer to occasionally pass on a deal you bring them. But that’s why you should try to find 2-3 buyers for each category of property you end up looking for.


Conclusion.

Traditional wholesaling is a quick and lucrative business, but it’s not perfect. Reverse wholesaling, on the other hand, has the same characteristics, except deals close faster, there’s less tedious work, and more assurance of a deal pushing through.


It may sound simple, but it’s a very smart way to minimize the common risks that come with the usual wholesaling process. Who knew that doing things in reverse can have such a great impact on your profitability? Well, now you know!


Did we miss anything? Let us know in the comments below!

Categories
Landlords

5 High-Volume Influential Real Estate Investors to Learn From

There is no better way to become an investor than by learning from those who came before you.

When you are seeing an investment for the first time, it’s easy to get overwhelmed. But if you can learn from a mentor who has been around for a while—one who knows everything there is to handle the trickiest situations—you can be more confident with even the most complex of investment ventures.

So, here are five of the most popular rental investors that you can follow and learn from. We’re incredibly lucky that these experts are generous and open to share their experiences with us—and on a constant basis, too!


Brandon Turner
Brandon Turner is one of the most well-established rental property investors in the United States. As a host of the BiggerPockets Podcast, he shares tons of valuable insights regularly for first time real estate investors. You can also grab a copy of his book, The Book on Rental Property Investing, where he breaks down the basics of how to buy and hold real estate. If you’re just getting started in real estate, this is a great place to start since he covers everything like:

  • Repairing your rental properties
  • Choose quality rental properties
  • Calculating your return on investments
  • And the basic how-tos that are not easy to find

“Remember the story of the tortoise and the hare? While many investors have ‘sprinted’ toward their investment goals, success is most often found by consistent action, not big action.” —Brandon Turner


Follow him on his social media profiles to get more useful tips:
-LinkedIn – Brandon Turner
Twitter – @BrandonAtBP
Instagram – @beardybrandon

Image via Twitter


Gary Keller

Gary Keller is the author of the several best-selling books, most notably, The Millionaire Real Estate Investor. In his book, he talks about the basics of real estate investing, the common myths on real estate investments, and all the things that you should not do. The last bit is especially important if you’re only starting out in the real estate investment industry.

With decades of experience in the business, Keller is a highly respected real estate expert and motivational speaker. As a founder of one of the largest real estate companies in the world, Keller Williams, he’s won several awards over the years. If you want to learn from the best—Gary Keller is one of them.

Follow him on social media to get in touch:
LinkedIn – Gary Keller
Twitter – @kwri
Instagram – @kellerwilliamsrealty

Image courtesy of Wikipedia


David Greene
Another top real estate investor is David Greene who’s been featured in the media on Forbes, CNN, and, of course—HGTV. Since he started out in sales years ago, he’s now gone on to own several properties across the country and is also a host on the BiggerPockets Podcast.

Beyond all that, David Greene has authored several books: Long Distance Real Estate Investing, Buy, Rehab, Rent, Refinance, Repeat, and Sell Your Home For Top Dollar. As his clients often say, Greene has seemingly infinite real estate knowledge. And he’s sharing that knowledge with any and everyone. His popular real estate website, Greene Income, teaches you all about the basics of real estate investing.


Find him on social media to learn more:
LinkedIn – David Greene
Twitter – @davidgreene24
Instagram – @davidgreene24

David Greene Real Estate Expert
Image Courtesy of Forbes

Desiree Patno
Also the CEO of Desiree Patno Enterprises, but Patno was also a founder of the National Association of Women in Real Estate Businesses (NAWRB). She’s got over two decades of experience in the business and has even been featured in magazines, like Entrepreneur. Now, she’s sharing her knowledge to encourage more women to become leaders.

Patno also hosts the podcast, Know the Rules of the Game, where she invites guests to talk about life, equality of course, entrepreneurship. As one of the most influential women in real estate—her advice is worth listening to.
Check out her social media to learn more:
LinkedIn – Desiree Patno
Twitter – @DesireePatno
Instagram – @desireepatno

Desiree Patno Real Estate Investor
Image via Twitter

Barbara Corcoran
If you haven’t heard of Barbara Corcoran, you’ve got some catching up to do. While many know her as one of the sharks on the TV show, Shark Tank—she’s done a lot more than just that. Nicknamed the “NYC Real Estate Queen,” Cocoran started out with just $1000 to start her small business in the Big Apple. Just 25 years later, she turned that small loan ino an over $5 billion real estate business.


If you’re looking for someone whose footsteps you want to follow in, then look no further. She also hosts the podcast, Business Unusual, where she shares her “utterly candid and totally unfiltered” advice with listeners.


Follow her social media accounts to learn more:
LinkedIn – Barbara Corcoran
Twitter – @BarbaraCorcoran
Instagram – @BarbaraCorcoran

Barbara Corcoran Real Estate Investor
Image via Getty Images
So, Are You Going to be Next?


Real estate is a business that can be tough to break into—but following the advice of these experts is a good place to start. Reading their books, podcasts, and blogs will give you an edge and help boost your confidence if you’re a beginner.
With the right mindset and a little effort, maybe we’ll be writing about you next!

Still not enough? We also have another list of Influential Real Estate Investors where you can find more experts to follow and learn from.
Who inspires you the most? Leave us a comment below!

A—but following the advice of these experts is a good place to start. Reading their books, podcasts, and blogs will give you an edge and help boost your confidence if you’re a beginner.
With the right mindset and a little effort, maybe we’ll be writing about you next!

Still not enough? We also have another list of Influential Real Estate Investors where you can find more experts to follow and learn from.
Who inspires you the most? Leave us a comment below!

Categories
Flipping

Selling Flips at Top Dollar: How to Price Your Flipped Home Correctly

A house under renovation
Photo by immo Renovation

Flipping a perfect house is a feeling like no other. After hours of fixing it up and giving the property a facelift, you can sell it knowing you’ll get back all your hard work. And you’ve given an old property a new chance to become a well-loved home again.

Then, you get to walk away with a sizable return on your investment, and get started on your next flipping project.

Flipping has been a real estate strategy for decades, but is gaining serious popularity with the success of shows like Flip or Flop. But, of course, these fixer upper shows only feature the ideal scenarios, enchanting the audience with all the benefits of house flipping.

But the reality is that flips are sometimes flops. It’s not always easy to sell the home at a good price, which defeats the whole purpose of house flipping for a profit. In fact, profit margins from house flipping fell by 3.2% in 2019 due to increased competition.

Nevertheless, the wind has shifted and we’re now seeing a huge increase in flipping profits. Home flippers are now garnering a massive average of 44.4% return on investment.

If you want to join in the fun and earn the highest flipping profits that you possibly can, read on to learn how you can price your home correctly and exit your investments with significant gains.

What to do After You’ve Finished Renovating Your Flipped House

So, you’ve gone through the process of renovating the house. You found a great property to work with, and all the renovations are complete. The next step is putting the property on the market and waiting for offers. But how, exactly, can you land on the perfect price?

Let’s take a look at some tips to price your flipped home according to its value.

Calculate the After Repair Value (ARV)

The after repair value—as the name implies—is the estimated value of a property after all the renovations are complete. For a house flip to be successful, you want this value to be higher than your total costs. You don’t want to have spent 80k for the house and 40k for repairs and renovations, only to have the property only valued at 100k. You need to have a good idea of your ARV in order to properly budget out your flipping project.

Having said that, there are two main methods to determine a property’s value.

  1. The Comp Method: This method is the most common way to determine the value of your property. This method is preferred due to how simple it is to compute your ARV.

You can also have an appraiser evaluate comparable properties that have recently sold in the neighborhood and set a fair market value for your flipped home. Alternatively, you can also use Realtor.com or Zillow to get ballpark figures on comps.

2. The Income Capitalization Method: This method of determining a property’s value is only suitable for large properties such as shopping centers and apartment buildings.

Simply divide your net operating income (NOI) by the capitalization rate (cap rate) to land on the property value. The NOI is what you expect to earn from the property, while the cap rate is the sales value of similar properties sold recently

Unless you’re flipping a large property, you’ll most likely use the comp method to determine your ARV. Only large properties have to take into consideration an NOI. Such as when the building rented-out is at 100% capacity. For smaller properties, the simpler comp method is preferred.


What Makes a Property Comparable

Now that you know how to calculate your after repair value, let’s discuss the details of running comps. When comparing properties, they need to be of similar status. For example, comparing a 3-bedroom house to a 12-story apartment complex would be useless. A comparison needs to fall under certain standards.

The basic criteria you see below are the most important:

  1. Property Size: Compare your flipped home to a property of a similar land and property area. The rule of thumb is to consider only the properties that fit within the range of 400 square feet smaller or larger than your property, and forget the rest.
  2. Property Age: Examine recent sales of properties that are similar in age to your flip to get a good estimate on price.
  3. Property Condition: Use recently remodeled or renovated houses that have similar conditions to your flip as a reference. Comparing your flipped home to another fixer-upper or a brand new, Class A home will only confuse your numbers—even if all other factors are the same.
  4. Other Properties Sold: It’s important to know the value of real estate sold recently. The real estate market is closely linked with the economy and interest rates. Prices fluctuate so sales from more than half a year. If the market is volatile, keep the date of sale in mind when looking for comparisons.

Ensure that you stay true to the criteria you’ll determine, so you compare your property to only the ones that will help you determine the best selling price.

Disregard Outliers

When comparing recent sales, you’re sure to find some extreme or stand-out sales. It goes without saying that these outliers could have extenuating circumstances that altered their sales price.

For example, a large property could be sold for cheap if there were unusual circumstances that occurred on the property, like a crime happening on the premises. In contrast, a small house can sell for above market value because it comes with a lot of amenities, like a huge backyard, an indoor sauna or a pool.

When you are looking for sales to base your property’s price on, you need to eliminate these extremes. Only when you get the real average on sales of similar properties will you land on the best estimate of your flipped home’s price.

Here’s a sample list of what you may have after running comps:

  • House 1: Sold for $100,000 at 1000 square feet
  • House 2: Sold for $150,000 at 1000 square feet
  • House 3: Sold for $110,000 at 1100 square feet
  • House 4: Sold for $105,000 at 995 square feet
  • House 5: Sold for $70,000 at 1200 square feet
  • House 6: Sold for $120,000 at 1180 square feet

Both houses 2 and 5 are outliers in this comparison and should be disregarded when scouting for a comparative price. We may not know why they’re priced so differently, but we still don’t want them to have an impact on our end result.

Conclusion

House flipping is one of the most lucrative and resource intensive projects in the real estate industry. If you’re not well-versed with the investment strategy, you can end up with a huge money sink that’s burning a hole in your pocket instead of walking away with the promised, coveted gains.


Nevertheless, there is a solution to flipping with confidence. And that’s to master the art of pricing your flips correctly—earning you high flipping profits with minimal risks in the process.


If you need any additional tips in flipping a house, feel free to drop us a message! Our team of expert property managers are more than happy to help house flippers price their fix-and-flip projects.

Categories
Flipping

Best Exit Strategies for House Flippers

A man writing down ideas
Image by ConvertKit on Unsplash

Even after you’ve created your fix-and-flip business plan and work schedule—unexpected events, changes, and delays can still happen. So, you need a good exit strategy to pull yourself out of the gutter and save what you can of your investment. 

For many, the flipping business is a lucrative real estate investment strategy to earn your profits more quickly. But, the reality is that there are many variables beyond your control that can drastically change your estimates. Even so, these obstacles shouldn’t automatically mean defeat. 

By having exit strategies ready, your fix-and-flip project will be prepared for any unexpected challenges that pop up. As Benjamin Franklin once said, an ounce of prevention is worth a pound of cure. 

The 7 Best House Flipper Exit Strategies

Like with any business plan, an exit strategy is an essential part of your project. The main goal is to minimize losses and maximize profits—even when things don’t go according to plan. Use any of these 7 exit strategies below for a solid plan B.

Short-Term Exit Strategies

Sometimes you just don’t have enough time and you need to make decisions fast. In cases where time is an important consideration, here are some short-term real estate exit strategies to help you keep things going.

Lower Your Price

A good exit strategy is to lower your price. Of course, you don’t want to go too low or you’ll lose money on your investment. 

This is why many real estate investors use the 70% rule to be confident they’re buying a property that is reasonable to flip. This rule of thumb means you won’t pay any more than 70% of the After-Repair Value of the property minus the value of renovations. To get the ARV, simply add the property’s current value with the value of renovations.

For example, if a property has a value of $100,000 and needs $20,000 in repairs, then its ARV is $120,000. After, calculate 70% of ARV ($120,000 × .7 = $84,000) then subtract the value of renovations ($20,000). According to the 70% rule, you should pay around $64,000 for the property. Your expected profit will be the ARV minus the value from applying the 70% rule ($120,000 – $64,000 = $56,000)

This gives you enough wiggle room in your budget for unexpected costs and the potential to lower your price without eating too much into your profits. 

Now, the percentage you lower will also depend on the receptivity of the market. Sometimes dropping your price by just 5% can do the trick. But other times, you might have to go lower. Whatever the percentage necessary, lowering your price can save the sale and allow you to still make a profit.

Wholetailing

Wholetailing is uncommon, but another possible exit strategy. It’s similar to wholesaling, except you cover the repairs and renovations necessary to make the house livable. Think of it as a combination of fix-and-flip and wholesaling. 

Like in wholesaling, you first purchase a property’s contract. After that, you perform a fix-and-flip and cover all the necessary repairs and renovations, such as the property’s structure, appearance, electrical wiring, and plumbing. Once the property is in livable condition, it’s ready for a buyer.

Not sure if wholetailing is for you? Here’s a list of things that make a property eligible for the strategy:

  • The property has to be clean and clear of any infestations such as mold, termites, and so on.
  • Essentials such as plumbing and electrical wiring have to be functional.
  • The structure has no major issues and fixtures are in good condition—as in no broken stairs, holes in ceilings and walls, broken floors, etc.

In addition, you can put up wholetail properties on the Multiple Listing Service (MLS). As a minor version of a fix-and-flip, flippers can consider wholetailing as another source of income. Diversifying your income options can help you generate an income in case your flipping strategy tanks.

Breakeven

Sometimes, the best exit strategy is the one that avoids any loss. In this case, you simply sell the property at the price you obtained it in order to minimize loss. It’s not ideal, but the silver lining is that breaking even will at least cover any debts, repairs, and renovations. 

Long-Term Exit Strategies

For those with fewer financial and time constraints, you can opt for long-term real estate exit strategies. These options are for those who aren’t in urgent need to replenish their finances.

So, another good exit strategy is to convert your fix-and-flip project into another real estate investing business. Tapping into another market and going for different types of deals can increase your chances of turning your investment around.

Hold Out

When the market runs dry, sometimes you’re left with no other options than to hold on to the property. In this exit strategy, investors can hold onto the property until a profitable offer comes along. This exit strategy goes against the nature of a house flipping business, but if you can afford to wait, a delayed sale may be worth it.

There are also a few notable ways the buy and hold strategy earns money:

  • Capital Gains. If you invest in the right market, the property value increases with time. Delays in the sale could also mean higher profits if the market heats up. 
  • Equity Gains. In contrast to capital gains, this refers to the amount of property that you actually own as opposed to the amount you have financed.

Rent Out Short-Term 

Whether it’s listing your property on Airbnb or specifically offering your own private short-term rentals, you can make roughly 2-3 times more renting your flip out short-term, compared to long-term. You’ll have to be prepared to manage your short-term rental and spend a lot of time dealing with guests, however, unless you’re going to work with a property management company. 

That being said, it’s also a great strategy if you just want to rent your flip out for a short period and then sell it later on (like when market conditions improve).

Rent Out Long Term

The business of property rentals has peaked in the past 50 years, with more and more renters looking for places to live. If your project is fixed up and ready to be lived in, then you can choose to rent it out as your exit strategy. 

By renting, you can generate income on the property and help your finances recover. If the rental continues for extended periods, it can also pay for itself and generate passive income in the future.

Offer Seller Financing

For buyers on a tight budget and flippers eager to find a buyer, seller financing is a good exit strategy that can help both parties. With this option, the seller acts as a lender to the buyer. You can negotiate almost any terms you want: purchase price, down payment, interest rate, term length, when a payoff is due (also called the balloon period), etc. In Michigan, a land contract is typically used, but you can also offer an actual mortgage. In either case, you’ll need a very experienced attorney to walk you through all the legalities. 

Apart from the benefits, it provides buyers, there are also several benefits for sellers. Some notable benefits are monthly income, an increase in ROI from interest, and spreading tax liability for a few years. Nevertheless, be mindful there are also disadvantages that come with seller financing. For example, you may have to deal with the buyer’s inability to pay, taxes, title searches, and so on.

Conclusion

Even a well-laid-out plan isn’t full proof. Sometimes, there are factors beyond your control that can affect your house flipping business. But just because it’s not going as planned doesn’t mean there isn’t an opportunity for profit.

A great business plan accounts for bumps in the road. With a good exit strategy, you can maneuver through your obstacles and get the best possible outcome. Consider these exit strategies to continue your flipping endeavors with confidence. Then, you will still have options to save your investments—just in case. 

Did we miss anything? Let us know in the comments below!

Categories
Wholesaling

Top 6 Ways to Increase Real Estate Wholesaling Leads and Grow Your Buyers List

Consistent lead generation is paramount to your success in the real estate wholesaling business. Finding a seller begins the wholesale process while finding a buyer closes the deal. 

However, generating valuable leads does not come easy. 

Even when you already have a long list of leads, you’ll still have to trim it down to the quality ones. After all, you don’t want to have just any leads—you want to garner high-quality leads to close more deals. And this can only be achieved by mastering the methods for consistent lead generation.

In this article, we’re going to tackle some real estate lead generation ideas so you can keep growing your buyer’ list. By having consistent growth in your buyers’ list, you can be confident that you’ll keep closing wholesale deals—and keep your income stream flowing. 

6 Ways to Generate More Leads

Generating leads in wholesale real estate requires diligence. That said, even a wholesaler’s time and effort are an investment. To ensure that your work pays off, you’ll have to work smart—not hard. 

For example, if your current method isn’t giving you the desired results, you need to try different lead generation strategies. Remember what Albert Einstein said, “Insanity is doing the same thing over and over and expecting different results.” 

And you don’t want to fall into that frustrating trap.

So, consider using these wholesale lead generation strategies to fill up your list, so you can spend time closing more deals.

1. Multiple Listing Service (MLS)

The Multiple Listing Service is an exclusive online database for licensed real estate agents, featuring properties available and sold on the market. What’s great about this is that it can automatically send leads to your inbox, among many other perks. More importantly, this real estate lead generation strategy is completely free—as long as you find access to it. 

Another benefit of this is that it can also connect you to other real estate investors in the market. As you grow your buyer’s list, you can also grow your business network.

Still, using MLS requires some dedication to be effective. Since a lot of agents use this strategy, posts can easily get lost among thousands. You’ll also need to go through many real estate leads until you find quality ones. 

So, yes, MLS comes with a few challenges. But, it’s comprehensive, affordable, and convenient—making it a terrific real estate lead generation method. 

2. Leverage Networking

Connecting with other real estate investors and helping each other out can keep you consistently closing deals. Now, some wholesalers are looking for sellers while others are looking for buyers. But by pooling together your resources, you can establish a mutually beneficial relationship. 

Nevertheless, this setup requires you to split profits. You’ll earn a bit less, which means you need more leads to compensate. This strategy is still great for growing your buyers’ list, as well as your network, so the pros outweigh the cons.

Apart from the real estate community, you can also look at your personal network. You never know which one of your friends or family members is looking to invest in. A quick post on social media sites or asking around might seal you some great—unexpected—deals. 

In other words, think out of the box and use your current network to generate wholesaling leads.

3. Cold Calling

This method is a popular one, as it kills two birds with one stone. By cold calling, you use your existing leads to generate new ones. 

The idea behind this is that people with similar interests usually gather together. Similar to how there is a network of wholesalers, there is also a network of buyers. So, take advantage of your current connections to see if they know others who are interested in your deals, even if they aren’t interested themselves.

Once you’ve identified some prospects, give them a quick call. Then, keep all of these individuals in mind and remember to follow up whenever you have something to offer. You can then continuously assess which ones are willing to make a deal, giving you very high-quality leads more willing to make a deal with you.

4. Drive for Dollars

Driving for dollars is a tried and tested strategy for real estate lead generation. There are many leads out there in the world—and sometimes all it takes is a quick drive around town to spot the right signs, literally. Yes, your car’s mileage will increase, but so will your buyer’s list.

Many real estate investors are also renters. In other words, you might find a house with “for rent” signs and contact details. 

Once you see these potential clients, give them a call to ask if they’re investors looking for properties. Investors are always looking for the next opportunity, so you might just get lucky and land on a willing prospect. And even if the person is an agent, that still works, because they might be looking for properties on the market as well.

5. Real Estate Agents

If there’s anyone that’s knowledgeable about the local real estate market, it’s the real estate agents. 

If you’re considering doing future investments in a certain area, a real estate agent can help you start. Real estate agents can be very helpful in building your buyers list and growing your own network. When you’re investing in a new area, they can help you close your first few deals by linking you to local sellers, investors, and properties in the local market.

Once you gain a grasp of the local market, you can start doing deals on your own. Alternatively, if you establish a good business relationship, you can even consider becoming long-term business partners. Real estate agents won’t only help you grow your buyers’ list, but they can help you land consistent deals.

6. Bandit Signs

Bandit signs are poster-sized signs with a short, direct message and contact details. You usually see a dozen of these signs near a property, often in high-traffic areas like local markets, shopping malls, and busy streets. It’s a common practice in real estate since it’s an effective form of real estate marketing. 

After all, leads can come from all sorts of places. And this method is a great way for you to cover multiple areas and expand your reach. Also, it’s usually quite affordable to put up bandit signs making this a more cost-effective way to strategically grow a buyer’s list.

Conclusion

Real estate wholesaling takes time, effort, and commitment. As a wholesaler, you have to strategize, think ahead, and be ready to face challenges head-on. Yes, generating wholesale leads does take a lot of work. But if you do it right, all that hard work pays off. The more leads you generate, the higher your chances of closing deals. 

With these strategies at your disposal, you’re now ready to generate consistent leads to propel your real estate wholesaling journey to the next level.

Got tips of your own or stories to share? Let us know in the comments below!

Image courtesy of RODNAE Productions

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