Selling a Home

To be honest, wholesaling was pretty tricky for me the first time I heard about it. Many of you have probably heard of the term wholesaling but probably have no idea how to do it. That’s why I am going to tell you about the fundamentals of wholesaling. I am going to teach you how to make a quick profit, without ever having to use any of your own money. What is Wholesaling? Probably the most fundamental question is what is wholesaling. To make it simple, at least simpler than anywhere else, here is my definition for wholesaling. The art of purchasing a property from someone and selling it to someone else. I say art because it really is an art. Anyway, this means that you purchase property from one person and then quickly sell it to someone else. It is a great way to make quick cash on your deal and, best of all, you don’t put any of your own money into it. Why doesn’t everyone do it? You are probably thinking that if wholesaling is so simple, why doesn’t everyone do it, right? The fact is that wholesaling can take quite some work and a lot of marketing. If you don’t know the right people, or the right network, you will not be able to wholesale your property in time. Most people just aren’t ready to put in that kind of effort. A Step by Step Guide to Wholesaling Here is a look at a quick step by step guide to wholesaling. Step 1 – Find a decent and cheap home The first thing you need to do is find an affordable home, preferably between $20,000 and $60,000. Talk to the owner and ask them to sell the property to you under your name; a regular Purchase Agreement. Try to find someone that is looking to literally get rid of his home, irrespective of the reason. Step 2 – Buy the Home Ask them to sell the home to you in your name. However, make sure you have a specified amount of time, in business days, to come up with the money. Step 3 – Save yourself Make sure that you save yourself when drafting the Purchase Agreement. In other words, you need to make sure that if you can’t ‘find the money,’ you will not have to purchase the home. Step 4 – Sell it to Someone Else All you have to do is find the right investor to sell the home to. All you have to do is add a few thousand onto the property as your fees and you are golden. Let’s say you find a home for $20,000, a home you know could sell for $40,000 with rehab, and you buy it for $21,000 due in 30 business days. Find an investor and sell the home to them for $25,000. Deal complete, everyone wins! Of course, there is a bit more to it but these are the fundamentals right? If you are looking to start wholesaling, we hope this guide helps you.

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With interest rates low, now is the best time for you to consider investing in a cash flow rental property. However, the average Joe doesn’t know what cash flow from a property actually means. When you invest in a property, the two ways you can recover your money is by selling it at a higher price or renting it out. Most purchases are made in the hope that the price will appreciate but sometimes that does not happen. Particularly in the current state of the market, appreciation is more of a distant dream than an actual expectation. Borrowing money for investing in a property carries greater risk. What you can do instead is rent the property out so that the cash flow from the property is positive from the outset. If the cash flow from a property is negative, it will hamper you from earning a respectable return on investment (ROI) and you will not be able to pay off the amount you borrowed to purchase the property. Therefore, getting cash flowing from a rental property is important from the outset. There are some other benefits of cash flow rental properties as well. Repay Your Loan Easily If you sit and wait for the property to appreciate in value, you have to bear the cost of repaying the loan during that time. The principal coupled with interest will take a huge chunk of your income. Unless you have the funds to take such a gamble, it is unwise to do so. On the contrary, you can get your tenant to repay the loan for you. Naturally, some part of the rent you receive will go towards paying off the money you borrowed. Increase Your Equity As the principal amount of the loan is paid down, your equity will increase and so will your net worth. It will improve your credit score, helping you get better rates and other terms & conditions when borrowing money in the future. Hence, getting a positive cash flow from the property you purchased now will boost your investment opportunities in the future. Rents Are Rising Rents, in general, have been rising around the country. This is the first time since the recession that the rents have increased. Therefore, you can get a higher rental now than let’s say a couple of years back. There are some cities in which rent is rising above the national average, which include Austin, Denver, Portland and San Jose. A rental property purchased in one of these cities will have a positive cash flow for sure. Tax Deductions Being a landlord entitles you to several deductibles that will reduce the amount of taxes you have to pay. These include the money you spend on maintaining or repairing the property, interest you pay on the loan you obtained to purchase the property, home insurance, etc. Even if your income generating sources are separate from your real estate endeavors, you can still enjoy the tax deductions. These are some of the benefits of cash flow rental properties you can enjoy.

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