After a brief glimmer of hope in the headlines, it turns out the Fed is deciding not to cut interest rates this year. What does it mean for real estate investors?

Hopes Of A 2024 Fed Interest Rate Cut Flop

While the hype around potential rate cuts certainly likely helped boost stock prices and spending for a few weeks, it seems that relief isn’t coming after all.

According to Bloomberg, the Fed now does not foresee cutting rates at all this year.

How is this likely to impact the market?

More Inflation

Higher costs of borrowing result in higher consumer prices. Even though it is claimed that high rates are used to battle inflation, we continue to see the opposite at checkouts online and at the store.

On the upside for real estate investors, this could also help to continue to support a rise in retail home prices and rents in some areas.

More Distress

Recent rate hikes have also coincided with increasing financial distress.

We’ve now got record volumes of nonperforming consumer debt in several categories, as well as ongoing defaults on mortgages, to the tune of billions of dollars.

With the news the NYCB is replacing its CEO and allocating more cash to cover loan defaults, this finally appears to be hitting the banks as well.

Motivated sellers of all sizes and types out there. From regular homeowners to big corporations, to financial institutions.

It’s a great time to be wholesaling real estate. While there are now countless ads and websites offering fast cash offers for homes, you can stand out by taking the time to understand the seller’s unique situation and triggers. Find out what’s most important to them, and not. That may or may not be price, closing date, and term. Then formulate the most attractive offers.

Funding Your Deals

A new report shows that it has not been this hard to get a car loan since the midst of covid. With banks holding money to cover loan losses, expect mortgages to also become harder to get.

Fortunately, whether you are just looking for the funds to get started in real estate, want to lower your risk, or expand faster with more capital, transactional funding is still available, and at great rates.

Still searching for more house deals to wholesale?

Opportunity and housing inventory seems to be growing fast among this one segment of the market. It’s only likely to grow even more this year.

If you are looking to do more deals, and to find motivated sellers willing to accept low offers, check this out…

Landlords Are Going Broke

More and more landlords, big and small, appear to be going broke. All the way from mom and pop landlords with one to a handful of properties, up to big banks with lots of pending REOs and their own underperforming real estate assets. As well as builders who are looking to exit before the market really changes on them.

Why Are They Going Broke?

There are many reasons that landlords are falling into financial distress right now. Ranging from poor acquisitions of properties with big and expensive issues, to the last couple years of the economy.

On the property level this can include deferred maintenance, tenant performance, inflation in holding and operating costs, poor property management and contractors, new regulations and malicious lawsuit trends, and more.

On a personal level this can include diminished retirement account balances and financial power, unemployment, inflation in personal living costs, and credit lines getting cut off.

Finding The House Deals

Some of these properties are being listed through agents. Though many owners are still on the fence, or haven’t listed yet. Especially as they don’t want the expense of Realtor commission.

So, how do you find them? Indicators to look for include; delinquent taxes, google searches related to financial distress, leads from property management companies, mortgage lates, mechanics liens, out of area owners, evictions records, building permits being pulled, code violations, local housing authority contacts and who has failed their inspections.

Make Lots Of Offers

Time to close and stopping the financial bleed are probably most important when it comes to selecting purchase offers. They might not get their whole investment out, but that’s better than losing more, or lawsuits from failing to keep up their properties.

 

How can real estate wholesalers find more motivated sellers and buyers in this market?

Securing the most valuable and profitable property deals, and getting the best ROI on your time and marketing efforts all comes down to finding and connecting with motivated sellers, as well as buyers.

This requires understanding who is motivated and what trigger points will lead them to convert.

Who Are The Motivated Sellers In This Market?

There are both institutional and individual motivated property sellers in this market.

The overriding theme here is high inflation and high living costs, which could last for many years according to some experts. A factor which may also be compounded by soaring unemployment due to high costs and the rise of AI.

According to Axios, small US banks actually hold 70% of all commercial real estate loans. They also hold almost 40% of all residential real estate loans. These institutions are coming under increased financial pressure as consumers run out of money and demand their deposits back, and default on loans.  They need to convert more assets to liquid cash. Which could make them a prime source of wholesale property deals in the near future.

For those that don’t think they are in trouble, it is worth noting that a coalition of these small banks have been pleading with the government to insure all of their deposits for the next two years.

Then there are all of the individual homeowners who are grappling with financial and emotional struggles.

What Is Convincing Property Owners To Sell?

Owners generally don’t take the action to actually sell and go through with the process unless they are really feeling stress in their current situation, and perceive more relief and pleasure from it.

According to a US News & World Report, the top things keeping people awake at night this year include high living costs, pandemics, gun crime, climate change, and the presidential election.

How To Put This Into Play In Your Business

Utilize the above information to hone in on who your highest converting prospects are likely to be.

Use it to craft your marketing campaigns and in how you pitch your purchase offers.

Then use this same data to understand how to best pitch your properties for sale to meet the needs and desires that your prospects are looking for. Highlight how your properties check their boxes.

Now check out our Fall Loan Deals for financing as low as 1% on your wholesale properties.

Financial distress is growing across America. What’s the best way for real estate investors to approach these property owners to secure great deals?

Financial Distress Is Rising

Current monetary policy continues to try and hammer the economy into submission. We’re already seeing the effects in terms of delinquent auto and business loans, credit card debt, and nonperforming mortgage loans.

This combined with mass layoffs, inflation, and other disasters like hurricanes is only increasing the likelihood of many more commercial and residential property owners falling into despair and foreclosure.

The Best Ways To Approach Owners

Approaching these owners can be a very delicate situation. One which most investors and real estate wholesalers get wrong.

The first thing to remember is that everyone naturally gravitates away from pain, and toward pleasure.

So, showing up scaring them and acting like a vulture or another debt collector is probably not going to get you anywhere. They are already inundated with calls from creditors. None of whom end up really being helpful.

Often this means that avoiding any letters, emails, and phone calls often becomes the least stressful option for them. At least until they are evicted.

If you are going to win them over, you have to show that you are going to offer them a real solution, and a better solution that is more pleasurable, and is worth their effort.

A part of this is also giving them a viable and dignified exit.

Some are so scared of having nowhere to go, or just can’t stomach losing that they will be frozen into inaction.

Can you offer them enough cash in the deal to move into somewhere that they can uphold their lifestyle for their families?

 

Then there is establishing a sense of urgency.

Many of these owners may not seem very motivated to sell. This is often because they believe random help from the president or the sky will provide them a golden bailout and free pass to stay. Or that it may take many years before they are foreclosed on and evicted.

You may have to carefully educate them on the likely timeline and their options. Which is a good opportunity to lay out your own offers. Which may include two or three choices, for a limited period of time. After which they go down.

Then it is all about maintaining the relationship. Being there, top of mind as a trusted advisor when they are motivated enough to take action.

Finance Your Deals From 1%

Be sure to take advantage of our MEGA rate sale, with interest rates as low as 1%. Check out the details here.

A new survey reveals that over half of Americans expect to lose everything in a new recession. Most believe that recession is already here.

While that is tragic for all of those individuals and families, it does create an enormous opportunity of a lifetime for real estate investors to help, and to be well compensated for that.

America Is Going Bankrupt

Big bank failures, and the dollar amounts involved are likely to make the last great recession seem miniscule in comparison.

If the world’s biggest banks can go under so fast, then not only will that have a waterfall effect on other businesses, but most individuals stand little chance of making it.

55% believe they will lose everything in a new recession. Close to 70% believe that recession is already here in 2023. While some at the very top and bottom may be insulated from this, it seems like there are many more who are not in tune with the economy, or do not have a healthy appreciation for just how fragile their financial situation is.

Here are the three main things this means for real estate investors…

Millions Of Motivated Sellers

The US population is estimated at around 336M in 2023. Around 60% of households are homeowners. That suggests at least tens of millions of those individuals who are becoming uber motivated to sell their properties before they lose them.

Some will need to be educated and nurtured through your funnel. Others will require creative solutions. Yet, not even all the banks left standing will be able to buy all of these deals. There is so much opportunity.

Massive Housing Needs

The flip side of this is that all of these tens of millions of households will need somewhere new to go.

Many may have to rent. Many will not be able to due to destroyed credit, and lack of documentation that has now made it harder to rent from all of these corporate landlords than to get a mortgage.

So, there will also be millions needing to buy new homes. As well as other investors looking to load up on supply to meet the booming demand for affordable housing and rentals.

People Need To Make Money

Jobs are being obliterated. Fed monetary policy continues to push toward creating more unemployment to deflate the economy.

Many are losing all of their savings in bank crashes and a tanking stock market or other exotic investments.

This is a great time to build out your own team with the best talent. Including training others how to help you wholesale houses so that you both win.

There are likely to be many more distressed properties ready to buy very soon. How do you make sure that you are ready to fully capitalize on this opportunity as a real estate investor?

Distress And Defaults Are Mounting

The latest bank and mortgage debt data released by DistressedPro shows that mortgage loan performance reversed trend in the last three months of last year.

Defaults and nonperforming loans are on the rise again. This appears widespread, across almost all sectors. Including commercial mortgage loans, residential home loans, and even multifamily mortgages. The only exception which seems to remain healthy is in farmland and agricultural loans.

Many of the improvements of the past two years have been erased. With many newly defaulting loans, as well as those now being deemed non accrual stage loans by banks.

Although REOs haven’t piled up yet, it is an important metric to watch in terms of overall bank and market health.

Defaults on auto loans and consumer credit card debts have also hit a new high, signaling many mortgage borrowers are barely hanging on. With more likely to fall late on their home loans and who will need to sell their homes.

So, how do you prepare to capitalize on this moment as an investor?

Have Your Funds Ready

There are going to be a lot more distressed properties and motivated sellers to buy from soon. Don’t get caught short, and beat out to the best deals because you aren’t ready to move fast with your offers and closings.

Pool your capital together now. Get your POF (Proof Of Funds) from your lender, and be ready to make fast cash offers.

Have A Strong Team

Those with the strongest teams will win.  Find the best talent, and when you’ve got them, don’t let them go.

Get familiar with working in a remote environment if you haven’t already. Ask around for referrals if you can. Unfortunately, platforms like Upwork which used to be good have now stripped away all of their customer support and have been burning their best talent. While scammers like Amurra Spices, and their fake Airbnb have taken over and aren’t paying freelancers for their work. As a result you may now find the best outsourced help freelancing for themselves.

Have Your Marketing Prepped In Advance

You should have your marketing mapped out and materials created weeks in advance to avoid rushing out junk. If you need to have a new marketing strategy plan created for this new phase of the market.

Focus On Providing Solutions

Focus less on price, and more on finding opportunities, and solving the problem and needs. This applies to both your sellers and end buyers. Focus on what’s most important to them.

Contradictory trends in the economy and real estate market are creating countless new opportunities for large profit spreads, and plenty of volume for investors.

This is the time to take advantage of the mayhem in the markets, and all of the uncertainty and flip flopping about the economy in the media.

On one hand we have huge amounts of capital being invested in real estate, with a lot more being loaded to the pipeline as crypto and stocks stumble. While on the other hand, more distressed and motivated sellers are willing to sell at discounts.

Tesla Vs. Microsoft

The current situation is perfectly summed up by this contrasting situation.

In the past couple of months, Tesla has announced at least two new gigafactories to be built. One may cost as much as $10B, and the other in Texas an estimated $700M. Of course, those new manufacturing projects and facilities will involve a lot of work and jobs as well.

Contrast that with Microsoft which just announced it will be laying off around 5% of its workforce, and consolidating its office space. In turn Bill Gates recently had to list his daughter’s NYC apartment for a quarter of a million dollars less than he paid for it. It may sell for a lot less than that.

Many other corporate giants are making massive layoffs as well. While there are many more tech companies you probably haven’t heard of that are currently investing $100M to $1B in new real estate projects.

While a few may find new employment, many others are going to see their situation snowball for the worse. Layoffs and corporate downsizing causes stress at home, divorces, and the splitting of households. Which means motivated sellers, and then more renters as well.

The big question for investors is how to thrive through all of this.

Find The Buyers With The Money

Begin by building up your buyers lists. Today this may include landlords and corporations looking to spend large on commercial properties, as well as helping their staff with housing.

Find The Motivated Sellers

Then, find the sellers willing to accept a fair, but deep discount to be able to sell quickly, and you’ll find a nice profit spread in the middle. Today, this group may include big corporations, wealthy individuals, and countless tech workers who are being laid off.

Distressed properties and discounts finally seem to be appearing for investors who have been waiting for better value opportunities.

Investors are still hungry for deals. In fact, the volatility in the stock market will probably bring a lot more capital in search of real estate for safety and income soon.

While not every seller is motivated or in enough of a crunch yet, many are willing to sell at discounts for cash. Real estate wholesalers who get out ahead of the pack will begin to find more deals to fill their pipelines with.

Bill Gates Takes A Loss In NYC

Bill Gates recently listed his daughter’s Fifth Ave. condo in NYC at a quarter of a million dollars less than he paid for it. With many properties now selling for under list price he might take an even deeper loss than that.

If titans like these are that motivated to sell, there are going to be many others too.

Twitter Defaults On HQ Rent

$40B tech company Twitter is being sued for failing to make its rent on its headquarters in San Francisco. That’s after shutting down offices in Seattle.

Amazon has also had to lay off 18,000 workers already this year, and try to sublease warehouse space it recently built after a lack of demand.

Not only will this yield more commercial real estate deals, but plenty of residential properties as tens of thousands of tech workers face unemployment and need to structure their housing expenses.

IRA Balances Nose Dive

According to Fidelity, IRA balances dropped by 25% year over year to November. Similar losses were seen in 401ks. Given the bearish outlook on the economy, expect those losses to compound and snowball in the first half of 2023.

Many individuals may cash out these accounts to put their money somewhere safer like real estate.

Make Offers: There Are Discounts To Be Had

This is a great time to be out there making offers on residential and commercial real estate. Even if owners are not motivated enough to give you the discounts you want now, keep the lines of communication open for later, when they absolutely must sell. You will build up a big pipeline for the rest of the year.

Price Your Deals Right

On the flip side, make sure you are pricing your resales with room on the table for buyers. Everyone wants a deal right now.

 

What are the best deals for real estate wholesalers to be working now?

As the market continues to change and revolve, where can wholesalers find the deals? Where can the good deals be found? What moves might you not want to make?

Foreclosures

Foreclosures have been growing again. While the actual number of foreclosures is relatively small on a national basis, there are pockets of higher activity.

ATTOM Data says foreclosure filings rose almost 130% over the past year. Still, with only 25,000 or so filings in a given month they can be snapped up quickly by a hungry market.

However, there are cities and zip codes where 1 in every 300 to 400 housing units is receiving a foreclosure notice. Those are 2008 level numbers.

These areas include Cleveland, OH, Kissimmee, FL, and West Palm Beach.

Distressed & Motivated Sellers

Banks still seem to be holding very few REOs. They are being auctioned off first, or sold fast.

Wholesalers may find better deals, and less competition if they market directly to distressed and motivated sellers.

This may include leads on homeowners who have large amounts of consumer debt. Those who have fallen behind on credit card and car loan payments, or small business loans.

HOA Properties

Rampant inflation is everywhere. Recently property owners have been complaining that their condo or home owner associations have raised their dues by 300% to 400%. That means many won’t be able to afford to keep their units.

If you are in and out fast, and can flip them to more affluent buyers these could be great deals.

Commercial Real Estate

It’s no secret that the residential market is heated and hyper competitive. Switching to commercial properties could lead to less competition, and bigger paychecks.

Consider which properties are most in demand by end buyers, which types are being liquidated, and which will do well in a new crisis.

This can include self-storage, multifamily, and office buildings.

The Deals You Have Pre-Orders For

The smartest and most profitable way to wholesale is not to speculate, but to simply fill orders for your end buyers. This way you don’t get stuck with properties, and you can use transactional funding to finance your entire purchase price.

Find volume buyers who will stick with you through the changes.

Moves Not To Make

With the way the market is evolving some wholesalers have considered fixing and flipping, buying and holding, or getting into Airbnb properties. This can be a huge mistake. It means moving down the food chain to more labor intensive and higher risk deals.

You do not want to be stuck with properties that have peaked.

If you looked at who survived previous crises best, it seems to be those that stuck to wholesaling.

 

While the pandemic of 2020 may have been foreseeable, no one envisioned such an extended period without rental payments or a ban on evicting tenants. If this is the end of rental properties, then what is the best investment move to make now?

No End In Sight For Eviction Bans

Dealing with non-performing tenants is nothing new for experienced landlords. An indefinite ban on evicting those renters is something completely different.

NY has already given renters a free pass through at least May 2021. CA appears to be next in extending their moratoriums. Even without any more extensions this backlog could easily make it 2022 before landlords could regain control of most of their units.

For landlords the bills are still due. If they don’t have other sources of cash coming in, then they face losing the portfolios they’ve worked so hard to build.

The Exceptions

It is true that in the long term property values have proven to just keep on going up. Even through every type of crisis that has come along.

There are PPP loans to help landlords stay afloat, and some may be able to take advantage of rent paid directly by local government agencies. We may also see much wider spread use of universal basic income and housing subsidy programs over the next year.

Big companies like Amazon are still investing billions in rental housing, and big institutional funds will still invest in these properties to play the long game. Just expect far fewer individuals being active in this space.

Wholesaling Real Estate

For those who need income now, wholesaling real estate is probably exactly what is needed.

It can provide fast cash injections which can supplement for lost earned income at jobs, and rents. Providing both living expenses, more investment capital, and cash flow to hold onto rentals.

The market is perfectly aligned for wholesaling too. We have almost $100B worth of distressed loans and motivated sellers in the pipeline. Meanwhile, retail buyers are active, highly motivated, and pushing retail house prices to new highs.

Wholesalers can flip their deals to rehabbers and directly to retail home buyers. Both of which are plentiful in the market today. Buy right, and you can bake in your profits upfront.

 

Ready to hit the ground running and crush your 2020 real estate investing goals?

Here are six types of motivated sellers out there in the market ready for you to make an offer on their homes.

1. Those Who Spent Too Much During The Holidays

There is a lot of pressure to overspend during the end of year holiday season. There are two types of people out there in January. Those who are flush and didn’t put any gifts on credit cards and stayed on top of their bills. Then those who splurged, racked up debt, tanked their credit scores, and are struggling to pay their bills. There is a good chance many in the last group won’t catch up and will lose their homes unless they sell fast.

2. Those Who Are Now Unemployed

Lots of places hire to keep up with the busy holiday shopping season. Then they let everyone go. That’s the last thing most can afford after splurging on gifts, food and going out for the last month. Now new employment laws threaten to dump tens of millions of people into the unemployment pool too. If California’s new employment laws effectively banning freelancers and independent contractors spreads, we could be looking at 60% plus unemployment rates in some areas of the US within the next 12 months. With no job or income, most are only a week away from falling behind on their housing payments.

3. Those Wanting To Start A New Life In 2020

Millions of people have promised themselves a new life this year. They are putting their foot down, resolving to change their lifestyles and step out in new directions. Many are ready to make big moves, cash out old homes and hit the road to travel.

4. Failed Landlords & House Flippers

Sadly, many investors have rushed in without educating themselves or they have relied only on speculation instead of buying assets at the right prices. Now they are out of credit, out of cash, and they are stuck with properties that keep drilling deeper money pits for their fleeting finances. Step up and help them get out.

5. Those Whose Homes Are Depreciating

As the correction spreads, homeowners who look up their house values online and see they’ve lost $6k, $60k ot $600k in equity in the past few months are going to get really motivated. Those values could plunge much further. Many will be smart to cash out. Yet, at the right price real estate wholesalers can still get in, buy low and flip for a profit. Even in a declining market.

6. Those With Big 2020 REI Goals

Connect with those with big goals for wholesaling or flipping houses in 2020, and who want to move deals fast and get a good headstart to the year. Help them crush their goals by moving their inventory for them.

 

Motivated sellers are what fuel the business for real estate investors. If your sellers haven’t been motivated enough yet, here’s the one thing that might change that…

There are lots of ways to find ‘motivated seller’ leads today. You can buy lists, search public records, subscribe to real estate software, knock on doors, run Facebook and Google Ads, and more.

If you’ve made any volume of contact attempts, you’ve already run into this issue. Homeowners who should be highly motivated just don’t seem very motivated at all.

It can be really frustrating. You put in a lot of time, sweat and money to connect with these people. You know they are in some form of distress. You know they need help and are far better off selling their properties to you right now. You even genuinely want to help. They just don’t seem to want the help.

They’ll make crazy excuses. They’ll ignore you. They will bury their heads in the sand and just wait for things to fall apart and get a lot worse. Logic just doesn’t seem to work.

What can you do about it?

In this phase of the real estate market there is one great tool at your disposal. One that can really create urgency and motivate them to action and taking your purchase offer.

It’s sinking home values. Not just national property values or values in their city. It is the value of their own home going down that can really spark urgency.

Reeling of statistics about the national market or what’s happening in the city as a whole really doesn’t hit home. It doesn’t seem real. Who cares if the national average home value dropped by tens of thousands of dollars last summer? Who cares that that New York retail properties are diving by 25%, or no one is buying new condos?

Though what if someone told you that your home’s value just went down by $10,000 or $100,000?

It’s a different deal, right?

All of a sudden that means they’ve just thrown away all that money and equity by dragging their feet on taking action. It means that could lose double that in the next few months if they don’t do something right now.

Now inaction can lead to all types of very real and close consequences.

Show them how their own property value has declined. Show them how it is likely to keep declining. You just might get their attention.

The final two steps to turn this into an actual deal are:

1. They have to trust you are the one to help

2. Make taking action with you easier and more pleasurable than the alternatives

 

Grab this content and use it as your own ebook and opt-in magnet to boost your lead generation and building your list of motivated house sellers.

Scoop Part 1 here, and Part 2 here.

PART 3

8. Not Knowing All Your Options

There’s more than one way to sell your home. It pays to know your options.

You can list with a full service Realtor. They can do most of it for you. You’ll typically have to lock into a legal agreement for a year, and hope you’ve chosen one who will put your best interests above their own.

Then there are so called ‘flat fee’ and discount brokers who will put your property on the MLS and major websites. Then you are pretty much on your own. What they don’t tell you is that on top of their fees, you’ll have to offer a competitive market rate commission to a buyers agent to get a buyer. That’s typically 2.5% to 3% of the purchase price, but could be more.

You can go the DIY for sale by owner route. You can go to Home Depot and get a for sale sign to stick in your yard (if your city and association will allow it), take out a newspaper ad and post your home on Craigslist. Then get ready for a whole ton of calls from Realtors who just want to list your property. A lot of busy work, with few real buyers. Even fewer, if any qualified buyers.

There’s also the question of how you’ll get paid. Clearly there are challenges and a lot of extra unknowns when accepting a buyer who will rely on getting a conventional mortgage loan. Selling to a cash buyer is clearly faster, easier, and less risky. You’re not just waiting for the deal to blow up due to the appraisal, repair issues, or weird underwriting quirks.

In other cases you may actually want to take your proceeds in installments. You may not want to put a big lump sum of cash in your bank account all at once. You may not want to deal with a big income tax bill this year or capital gains. You might owe more on your mortgage than the property is worth. A knowledgeable buyer who will pay in monthly installments and take the burden of the debt and maintenance off your hands immediately can be a great fit. You get an ongoing monthly income, without having to do anything. Any tax implications of a sale may be much lower. You won’t have long lost relatives popping up out of the blue asking to borrow money.

Or perhaps a mix of the two is right for you. Maybe you need $3,000 to move into a new rental, and then are happy to get the rest in installments which will cover your monthly bills.

9. Dragging Your Feet

You may be busy, you may not have much extra bandwidth in your brain for dealing with open houses and interviewing a dozen Realtors. However, the longer you wait, the worse it usually gets.

The market can change on you at any minute. Wait another month and your property could be worth $50,000 or $100,000 less. Or maybe your neighbor loses a similar home to foreclosure and completely trashes your home value by 50%.

Then there are all those nasty risks of natural disasters. Wildfires, electrical fires, earthquakes, storms, and more.

If you are already in a situation where you are behind on your mortgage, property taxes, association dues, income taxes, or code violation fines, waiting is only going to make it worse and slash your options. Some fines can accrue at $1,000 a day. That is more money bleeding out of any proceeds you could get in addition to all of the other holding costs we already mentioned.

Time is your enemy when selling a home. The sooner you can find a buyer, sign a deal and get through the closing the better.

10. Thinking Zillow Zestimates are What Your Home is Worth

Zillow has been a plague on the real estate market for years. Most obviously due to its controversial home value tool. It’s known for being wildly inaccurate and causing much strife between home buyers and sellers, lenders and real estate professionals. A Zestimate is not an appraised value. In the past Zillow has had to restate the values of millions of homes and has even restated years of historical Zestimates. There are now also many conflicts of interest which may influence Zillow to change values frequently for its own financial benefit.

The best gauge of your home value is a true appraisal. Second is comparing similar homes which have sold within 1 mile of yours, within the past 6 months. This includes comparing by square footage, bedroom count, lot size, age, property condition, and swimming pools. Then you may need to deduct the cost of any repairs or needed updates the next buyer will have to do.

Summary

The process of selling a home can be stressful and full of unexpected quirks. Fortunately, by knowing and watching out for these common fails you can skip the headaches, risks and long periods of sleepless nights, and just get onto the next great step in life.

 

Use this free ebook on your website as an opt-in download to get more motivated sellers to get on your list and lead them to selling their homes to you, so you can wholesale and flip them.

Look out for Part 2 next week...

The Top 10 Fails To Avoid When Selling Your Home

Plus, How to Beat the System & Get More Money, Faster, Without the Stress

Selling your home doesn’t have to be that complicated. You can save a lot, and sell a lot faster, with less drama if you can avoid these ten common pitfalls.

Whether you are in a financial bind, just inherited a home, have to relocate and don’t want to juggle two mortgages, flopped on your first house flip, can’t get those trouble tenants out, or it’s just time to move on, selling your home should be simpler.

Don’t fall for these common mistakes, and you could be financially better off in days, and be enjoying a lot more peace of mind again.

1. Not Pricing it Right the First Time

By far the most common mistake home sellers make is failing to price their homes right from the beginning.

Here’s what happens…

What’s the harm in asking for a little more or pricing a bit more than the neighbors?  Many sellers do. Then it becomes a ‘boomerang home’. It’s what real estate agents call a home they use to show their buyers in order to make their other listings that pay them more look like a better deal. You might get showings, but they aren’t from buyers who will actually buy your home. It’s a lot of wasted time and stress for nothing.

Even more likely, potential buyers will think you or your agent just aren’t being realistic or serious about selling. They don’t have the time to try and convince you otherwise, and don’t want to waste time placing bids when they could just make an offer on a more accurately priced property with less hassle.

So, that fresh listing which gets the most eyes and attention in the first few hours starts getting stale. Few buyers see it, because they and their agents are only focusing on brand new listings popping online by the hour. Then it’s an old listing. If no one else wanted it, the assumption is there is something wrong with it, and they don’t want it either. Way down the road, you might get some low ball offers from the vultures.

Some sellers then try to slash their asking prices. By then the market may be down even further, creating a downward spiral, without ever catching up. All while you’ve incurred a lot more expenses, and if you do sell, pocket way less money.

If you do decide to list with an agent, then there is real science and strategy to pricing. You need to be within certain parameters to fall within the right searches. Or you’ll really be invisible to the right buyers.

Right priced properties can sell in any market conditions. Unfortunately, overpricing is often accepted and even encouraged by hungry new agents who just want to sign listing agreements to get their office numbers up, and hope you’ll lower the price later.

2. Investing in the Wrong Repairs & Improvements

All too often home sellers are told they need to be making repairs, upgrades and even staging their homes in order to sell. Of course every agent wants that. It makes their job a whole lot easier, gives them the hope of a bigger commission, and may put you in a tighter financial position with fewer options.

At best, spending on these things is usually a risk. If you are already struggling financially, this can be what finally sinks you.

Here’s the truth. Home makeovers are typically not the big money makers you see on TV at all.

According to the Cost vs. Value Report, all of the most common home remodeling projects are financial losers.

By far the best financial investment of all of them is an upscale garage door replacement, returning 97.5% of your money. Unfortunately, a master suite addition or upscale major bathroom remodel will only return about half of your money. Meaning you are immediately throwing half of it away, just like driving a new car off the lot.

These things might help sell your home. They may get more buyers to look at it. However, if you aren’t adding a dollar to the real appraised value, you are just going to wind up having less money.

3. Not Calculating Your Net Proceeds

The top line price of a home can really be irrelevant. It’s firstly what selling the home does for you, and secondly how much you actually net.

If this home is a financial burden right now, simply getting it off your hands is going to save you a lot of money and stress. Each day you own and hold it, you are spending money. Investors say every day you aren’t selling it, you’re buying it.

Really total it up. Mortgages, insurances, association dues, property taxes, utilities, internet, etc. That isn’t even calculating the risk of damage and devaluation of the property over time.

So, every day it takes to sell it, you have to deduct those costs. For example; even at $200 a day, if you list with a Realtor and it takes 100 days to get a buyer, and another 60 to close, you’ve lost $32,000. Money that would have gone in your pocket if you sold faster. Living in Southern California, your daily rate of loss may easily be 10x that.

So, number one, get rid of the bleed. Two, calculate your net from different scenarios. If you are working with a Realtor, title insurance company or real estate attorney, they should help provide a ‘Net Sheet’ showing your potential net proceeds. Make sure you are comparing apples to apples and all the costs are added in when evaluating your options.

For example; if you list with an agent, you may end up with a host of costs coming out of the sales prices, including 6% of the sales price going to Realtor commissions, taxes based on that higher amount, paying off liens, recording and wire fees, escrows, etc. Depending on the price of your home, that can easily run $100,000.

Compare that to selling direct to a buyer who will pay your closing costs, with no Realtor involved. Even if they offered you 10% less for your home, you might actually pocket a little more money. If the offer was the same price, you’d pocket way more in this second scenario.

 

Remember to deduct the cost of all the days you expect it to take to get to a closing, and any money you chose to put into repairs or improvements and staging.

 

Valentine’s Day 2019 is almost here. Take the opportunity to show some extra love to your real estate lead lists, and set your wholesaling business up for more success at the same time.

Get in those Mailboxes

This is a great time to be landing your information in mailboxes and email inboxes. Smart use of packaging and subject lines could greatly increase the number of people on your prospective sellers lists that actually open and read your message at this time of year.

People love to know someone is thinking about them, and many won’t be receiving Valentine’s Day cards this year. Stand out and show some love. They’ll remember you when they are really ready to sell their homes.

Educate Them

Whether it is through the mail, email or on your real estate blog and social media, invest in educating your prospects on the importance of selling their homes now, and the pain of failing to do so. With tax refund season here, many will find this their best opportunity to get out of a distressed housing situation and move on. Others just need a reality check on how far their home price could fall if they drag their feet on selling this season.

Realtor Matchmaking

One of he biggest reasons that those who should be motivated sellers don’t sell is that they simply don’t know where they will go next. Match them up with a motivated Realtor who can get them out and find them a new rental or more affordable home to buy.

Give Them Earning Opportunities if They Insist on Staying

Some people will refuse to get off the sinking ship, no matter how close they get to a foreclosure auction date. For those on your list that are adamant about staying, show them how to make more money to pay for their homes and Valentine’s Day gifts by bringing you leads on other properties and sellers.

Host an Event

Valentine’s Day brings so many themed event and party opportunities. Host a community event of your own. Invite all of your prospective sellers. Use the time to build relationships and trust, so when they do decide to sell their loyalty is with you.

 

Want to get into real estate wholesaling, or just run a leaner business with more profit? Check out these quick tips…

 

Trim the Fat

 

There are many bills and expenses we accumulate that are really unnecessary, which can eat up a lot of profit, and can slow down growth. Real estate educator Larry Goins says that you can even flip houses today just using email. No phone needed. With free Wi-Fi growing, you may even be able to survive without an expensive phone service or contract. Just a phone, and using free internet to get online, and using Skype or Facetime for calls if you really feel you need to.

While you may want a laptop or tablet as well, know that you probably don’t need a top of line Mac. You can get by with something basic, and a backup device or two. A Dell or Acer will work just fine.

Some millionaire real estate agents are even ditching their cars in exchange for Uber.

Where You Live

Where you live can also make a massive difference in your net gains. You no longer need to live where you wholesale real estate. You can do it remotely from anywhere. Take advantage of that. You can live in Detroit dirt cheap and flip million dollar houses in the Hamptons. Or you can live in Nicaragua or Mexico and flip houses in Florida, Ohio, or California.

Find the Buyers First

Instead of finding the inventory, and then carrying the weight and just hoping you can sell, find the buyers first. Then you are essentially pre-selling and filling pre-orders.

Use Transactional Funding

Use Best Transaction Funding finance your deals, and back to back flips. That way you are in out and paid in hours. You can also get your closing costs and 100% of the funds you need covered.

Find the Best Markets

Find markets and motivated sellers that allow for least out of pocket expense. It’s traditional in some markets to have to put down a big deposit, and appraisal and inspection fees can be far higher on some properties than others. Find those that let you operate with as little risk as possible.

 

Motivated sellers make or break your career as a wholesaler. Without a seller ready to give you a contract, you're pretty much dead in the water.

Finding motivated sellers isn't always easy. There are plenty of traditional ways to go about finding these sellers, such as bandit signs, auctions and real estate meetings. However putting this into a plan you can actually use is quite different.

Before you start looking for the right sellers for your wholesaling business, you need to understand why they are so important. Without these sellers willing to sell you their discounted property, you don't have much to make money from. You need these off-market properties to create success as a wholesaler.

Motivated sellers bring you a property they are ready to sell, usually due to a life-changing event. Maybe they need cash fast because of an illness, a divorce, or because they inherited the property. No matter the reason, they are ready to sell and they want to get the deal done fast.

There are several ways to find motivated sellers with properties they want to sell fast. Here are just a few of the top choices.

Direct mail. When you sent out postcards through the mail, it only takes one deal to cover your expenses for about an entire year using this marketing method, maybe longer. You have to figure out your target market first and get a list of the address/names for that market. The good news is that it is very scalable, and can bring in quite a few deals. It's pretty easy to spend a few thousand dollars on direct mail marketing and come out of it with multiple deals.

Driving for dollars. It's hard work and a bit like pounding the pavement, but driving for dollars is a great way to find motivated sellers, especially when you're on a tight budget. If you don't have much to spend on marketing, this is one of the least expensive ways to find your next deal Look for properties with high grass, boarded windows and those properties that simply look ugly. Then, write down the address and find out who owns the property from your local tax assessor's website. You can easily find the owner's contact information with skip-trace software and give them a call about the property.

It's free, and some of your best deals may come from looking on Craigslist. People put up properties they want to sell there all the time. Not only can you search for these properties for free, but you can also put up your own ads on Craigslist.

There are many ways to find motivated sellers. Sometimes, you have to think outside the box, but you don't have to reinvent the wheel. When things are moving slowly, get to work and start marketing your wholesaling business for your next deal.

 

Real estate wholesaling isn't a hobby. If you treat it as such, you'll probably never achieve your real goals. However, when you treat wholesaling as a business and you set solid goals, you'll have the ability to achieve them.

When you're new to wholesaling, you have to set proper goals to keep you moving forward. Wholesaling is all about finding deals, but there's more to it. Here's a breakdown for setting your wholesaling goals.

Your First Month

As a newbie to wholesaling, it's best to get your feet wet right from the beginning. Find one to three neighborhoods you want to target and start finding some buyers. You don't have to have a list of hundreds or thousands of buyers in your first month. Just find 5-10 quality buyers and you will be well on your way.

Goals for your first month include:

Choose 1-3 neighborhoods to target

Find 5-10 potential buyers

Get the phone number and email for each potential buyer

Your Second Month

You've set the foundation and it's time to start reaching out to motivated sellers. This month, you will start marketing and finding deals.

Goals for your second month include:

Do market analysis and choose your target area

Pull lists from online sources or go driving for dollars to find potential sellers

Choose your marketing methods (direct mail, bandit signs, internet, etc.)

Set up all the necessary details for your marketing

Send out your first mailer, place your first bandit signs and start marketing online

Reaching $100,000 Per Year

If you’re not making this much yet, a good goal for a new wholesaler is to reach $100K per year in income. Then just 10x that to hit your $1M mark. Start with the first two months above and once you have your marketing in order and you're building a buyer's list, you can move on to an actual income goal.

The best way to set your income goal is to figure out the average you will make from a wholesale deal. Then, figure out how many deals you need to do. For example, if you average $10K per month, you only need to do 10 deals to reach $100K.

Once you know how many deals are necessary, it's just a numbers game. Figure out your marketing conversion rate and how many leads turn into deals. Then, just market enough to get the 10 deals you need to make $100K.

Many new wholesalers make it harder than it needs to be. Set up your foundation in the first two months by getting your marketing going and creating your buyer's list. Then, as the deals start to come in, keep track of the numbers. This will allow you to set and achieve your income goals as a new wholesaler.

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

Looking for more motivated seller, and buyer leads?

Check out this underserved niche, and provide much needed help, while stacking up your real estate deal pipeline…

46,523 New Real Estate Leads Per Week

Think there aren’t enough motivated real estate leads out there? Check these stats…

Every week over 46,000 people get divorced

That’s almost 100,000 individuals motivated to fix their housing situation

That’s 6,646 cases per day

277 per hour

That’s on top of the even larger pool of separations and breakups of unmarried couples.

What happens when couples split? One or both of the individuals need to find somewhere else to live. In most cases the best scenario is for the home to be sold. Even if this couple doesn’t own it, the landlord is quickly going to be distressed when the rent stops coming in.

Motivated Sellers

When couples that own homes spilt, it is normally cleanest to sell the home as fast as possible. This sheds debt, makes housing payments affordable, and eases the stress of negotiating settlements. Speed is the most important factor here. Without a fast closing the debt will build up.

Buyers & Renters

One or both of the pair will need new housing, even if they don’t sell the old home immediately. Some may be walking away with multi-million dollar settlements to purchase another property as a cash buyer fast. Others may need to rent for a little while before purchasing. Think lease options and rent to own deals. All of this group are incredibly motivated to move fast.

Where to Find the Leads

New and older divorce records online and in the paper

Leads from moving companies

Realtors and mortgage brokers

Divorce and family law attorneys

Facebook

Help & Win

No one wants to take advantage of anyone in a tight and stressful spot. Most know it can be quirky to get in the middle of someone else’ business. However, these people really, desperately need help. They need a roof over their heads and for their kids, today. They need to stop the bleed on homes they can no longer afford, or don’t want to be liable for. Help them. And if you really serve them well, you can dominate this niche, and find thousands of real estate leads each month.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

How can real estate wholesalers secure more probate and estate property deals?

As the market changes and there are fewer foreclosures, auction properties, and short sales available many real estate wholesalers are hunting for deals in new niches. Probate property and estate sales are often promoted as one of the options for sourcing motivated sellers. However, few wholesalers take the time to adjust their marketing to really connect with these sellers.

So what is it that those with inherited property really want and need? What will help them take the leap and lead to more offers being accepted?

As with many sellers in the market today there can be substantial disparity in perceived property value. Some may underestimate what their inherited homes may be worth, while others may seriously overestimate the value. Many may turn to easy to access online home value tools which can be wildly inaccurate. It can be worth the time for serious wholesalers to take a look at the most popular of these in order to be prepared, and be equipped to overcome objections. Many owners of these properties may also not be aware of the quirks of selling beyond what they see local comps selling for. For example; villas in hot senior areas like sunny Southern Florida may be in communities which come with five and six figure membership fees on top of the purchase price, or may be in older golf communities which aren’t as fashionable as they once were.

In many cases speed is vital. It is often more motivating for owners of inherited property than price. Family members often can’t afford extended time out of work, and high travel costs going to and from a property in another state for showings, etc. So can you pay cash, or use transactional funding to close in just a few days?

In addition to offering more value through clarity and simplifying the process of selling an inherited property, speed is important and a highly motivating factor due to ongoing holding costs, and the potential for devaluation. If there is a mortgage in place, past due property taxes, or condo and association dues a property can fall into foreclosure, or at least see net proceeds drop dramatically within just a matter of weeks.

Even more important than price and speed, can be connecting owners with help for sorting and dealing with personal items left in a property. Most don’t have the time to sort or get items ready for storage or have the bandwidth to ship a houseful of old items to charities. How can you help them by connecting them to these services?

Finally, when marketing to owners of inherited property consider the messaging differences which may be required. Will they be put off by promises of lots of money fast, and be drawn more towards those that offer respectful assistance in a difficult time, that doesn’t make them feel they or you are yet another vulture trying to pick the estate clean out of greed?

This can all be accomplished via direct mail, online, or via printed materials passed on through other professionals they might be coming into contact with.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding and hard money loans for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.