The Key to Real Estate Success

Real Estate Agents- Unless you're an agent yourself, you won't have access to the all-important Multiple Listing Services (MLS). The reason you need access is so you can run "comps." MLS allows you to find out the value of a target property in comparison with other properties in the area. This figure gives you the basis for negotiation with the owner.



Lenders- There are two types of lenders--private and "hard money" lenders. Earlier, I said you don't need lenders. That's true-you don't need them for yourself. But you do need to line them up for your buyers. It makes it easier for them to purchase the contract from you. So, what's the difference between the two types of lenders?

Well, private lenders are individuals with money to lend. The great advantage of private lenders is that they can lend you money at a lower rate than hard money lenders. My advice is to always try them first.

Hard money lenders are brokers; that is, they act as go-betweens. They have connections to both private lenders and financial institutions like banks. The disadvantage of brokers is that they're more expensive. They charge upfront fees for their service and higher interest rates. You can see that it makes sense to develop good relationships with private lenders; it definitely keeps expenses down and improves your bottom line.


Title Companies- Title companies search property titles for you and provide you with vital information on those titles (ownership, liens, etc.). As a wholesaler, you need to find title companies that know double closing procedures and are willing to do them.

A "double closing" occurs when you buy and sell the property in the same day or date. Some title companies require a waiting period from the time you buy a property to the time you sell it (3 days, etc.). Be aware that title company requirements change all the time. Their guidelines get stricter or looser depending on market conditions and regulation changes.

For example, a few years ago (2004 and 2005) there was a considerable amount of mortgage fraud going on. Dishonest investors would buy a property and work with an equally dishonest appraiser or bank officer to get an inflated price. Then, they'd re-sell ("flip") the property for a quick profit. Consumers ended up getting burned in these deals.

As you might expect, this "bubble" burst, and a lot of people got hurt. That's why the term "flipping" is not popular in the real estate industry these days so I'd recommend that you don't use it. In short, some title companies will not do double closings due to stricter guidelines created to prevent fraud.

However, it's likely that there are companies in your area who will work with you. You can find title companies listed in the Yellow Pages and/or on the Internet. Or, you can simply check around within the real estate community and ask other professionals to recommend a particular company.



Contractors/Repair Estimate Tools- You'll need professional, experienced contractors to do repair bids for your business. If you have a good, on-going relationship, a contractor may do a bid for free in anticipation that they'll get the repair contract. Otherwise, it's a small fee ($25--$50 in my area). Be sure to choose a contractor on the basis of his or her quality work and their estimate; don't always go with the lowest bid. Shoddy worksmanship will cost you more money when the work has to be redone.

You can also use software tools like Instant Rehab Estimator which you can find at my website www.DoDeals.com. It automatically calculates repair estimates, but isn't as accurate as an actual contractor bid. However, it's very useful in this regard: The estimator allows you to list out all of the repairs you feel are needed. You can then email the list to three or more contractors, and they all receive the same information and fill in their prices for each item. That way, you can compare prices item by item and see who's offering the prices you want.


Inspectors- You don't require inspectors yourself for wholesaling. However, buyers do sometimes require inspections so you should have contact information available for them. Think of yourself as a service provider in this regard. The easier you make it for buyers (and sellers) to do business with you, the more likely it is that you'll make a sale.

In the case of rehabs that you plan to do yourself, you'll definitely need the services of a reliable and experienced inspector. He or she will have expertise you don't have and will be able to spot problems you might otherwise miss.

Want to find wholesale properties and neighborhoods the easiest way possible? Go to www.DoDeals.com.

Social Bookmarking

I update this lens regularly. If you like the content you can keep yourself updated by:

• Joining my Fan Club
  
  
• Adding this lens to your favourites
  

Now I can send you casts when there is something new and you don't miss a thing!