Follow Tim Mai’s common-sense methods of selling wholesale properties. Whether you sell quickly or for top dollar, Tim shows you how to do it the right way!

Set Your Wholesale Objective–Sell Properties Quickly or Sell for Top Dollar!

Choose the Sales Method That Works Best for You in Any Given Wholesale Situation!

I n earlier articles, I showed you how to find great wholesale properties, sell owners on your deals, and conduct a title search so you can get the property free and clear of any legal entanglements. So, let’s assumed you’ve purchased the contract and gotten a good deal. Now, you have to answer the question: “What am I going to do with this house? In other words, you have to choose the best exit strategy, the one that best meets your needs. You’ll have to ask yourself questions like:

Do I want to wholesale it to another investor very quickly so I can get my money back in 30 days?
Am I going to take a little longer to wholesale it in order to make more profit?

It all depends on your goals, of course. If you want to wait a while to wholesale a property, you will have to wait 45 or 60 days (or however much time the seller gives you) in order to gain a greater profit. On the other hand, you may want to sell the house as quickly as possible. If the price is right and you’re reasonable, you can sell a property within an hour.

Remember, it’s all based on price. For example, if I’m trying to wholesale a deal and I think that the neighborhood is really good and it’ll make either a really good rental property or a really good retail property and I want to wholesale up to 87% or 90%, then I know it’ll take me more than ninety days to wholesale it. It’ll probably take thirty-five, but I’m going to hope to wait for it. You can do that too and you can make a little bit more money.

If you’re a beginner in wholesaling, I recommend that you set a goal of making money within thirty days. Wholesale a house at a price that’s reasonable to just get in, get out, get paid, and move on to the next deal. Then, repeat the process until you’re able to make enough cash flow for the month that you don’t need to wholesale a good property within two or three weeks. With this method, you can wait longer on that particular property and reap a bigger profit.

One recommendation: always have a backup buyer on a deal even after you sign a contract with another buyer. In fact, the more backup buyers you have, the better. The reason to do this is that, sometimes, the original buyer can’t meet the terms of the deal and has to back out. So, it’s a good idea to have backups in case this situation happens to you.

Now let’s look at the details of wholesaling a property quickly.

WHOLESALING QUICKLY

In order to wholesale quickly, you first must have buyers to whom you sell the contracts on your properties. That means you have to build a buyer’s list. There are several ways to accomplish this task, and they’re explained below.

Section 8 Properties
One of the ways to get started in building a buyers list in your area is to visit the local Section 8 office and get a list of all available Section 8 properties. Section 8 is a government housing program that helps low-income individuals with their rent. In effect, it’s a federally subsidized voucher housing program that allows low income families to pay only a portion of the rent. So, if a Section 8 home has a monthly rent of $1,000, then the government will pay $800 of that amount, and the tenant will pay $200. Section 8’s goal is to allow poverty level families to live in de-centralized areas of cities as well as encouraging families to save income for eventual home ownership.

There tend to be two types of renters-the ones who are good tenants and will be in their houses for a long time and the ones who are short-term. They’re the type who’ll mess up the house, break their contract with the government, and then get kicked out. It’s the landlords of the latter type that you’ll want to put on your buyers list and contact. Section 8 rental properties are typically found in your moderate-income and low-income neighborhoods, and, thus, are ideal for you.

Once you have a property, you can post it on my website and start building your buyer’s list when investors contact you:www.dodeals.com

Or if you want to find out-of-town investors nationwide, you can post your property on such free services as: www.craigslist.org or www.backpage.com.

“We Buy Houses!” Ads
Another way to build your buyers list is to call those “We buy houses!” ads in the newspaper. When you call them, tell the person, “I have a property I want to wholesale? Do you want to buy it?” If they’re not interested, you can find out what area they buy in and what price range they prefer. This will help build your list. You can also ask them if they have any properties they want to sell. Consider them both buyers and sellers. You should be able to buy houses from other investors all the time and get some good wholesale deals.

Classified Ads
Another method of building your buyers list is to place classified ads in newspapers. As the sample below shows, it only need be a simple “Handyman Special” ad”

Handyman Special
Cheap-CA$H
1-xxx-xxx-xxxx

This is a technique I learned from Ronald Graham. Just keep running the ad until you build up a good buyers list. Even if you don’t presently have any houses, run the ad anyway. When interested parties call, tell them you’re always getting houses into inventory, and you sell them quickly. Tell them you’ll put them on your buyers list, and, as soon as you have a house, you’ll contact them.

Yard Signs
Yard signs are great for attracting the attention of buyers. I use the neon color poster boards you can find at stores like Office Depot, Staples, Walgreens, etc. Below is an example:

Handyman Special
Cheap – CA$H
Must Sell Fast
$60,000 (Flexible)
1-xxx-xxx-xxxx

This is a good technique because investors have been trained by Ronald Graham to look for signs with words like “handyman special%u2026cheap-cash%u2026must sell fast%u2026flexible,” etc. When they see those signs, they’ll give you a call. Of course, put the signs all around the neighborhood because there may be tenants in the neighborhood who are now ready to buy a house.

I recommend that you put up at least twenty or thirty signs all around the neighborhood. If they get taken down, put more up. If you can put up signs with arrows on them, all the better! Arrowed signs make it easier for buyers to find the property. Put at couple at the house, of course.

Note: When you’re first building up your buyers list, you don’t want investors to know where the house is; you want them to contact you first and schedule an appointment. So, don’t put up signs until your list is built up. If the house is occupied, then don’t put up signs with arrows on them. The seller may wonder what’s going on if a number of investors suddenly show up to inspect the house. So, be sure to inform the seller ahead of time that investors will be appearing. Tell him or her something like this:

“I work with a really big group of investors. Because your house needs a lot of work, I have to bring them all out to see what repairs are needed and to see if they’re interested in the purchase of your property.”

Most sellers will understand the process and will be happy that you’re being aggressive in making a deal.

Other Tactics
With vacant houses, you can put “attention getters” on the property-plastic flags, streamers, etc. These get the attention of investors and others and pull their interest to your signs. Of course, this calls for a little more work on your part, but the more work you’re willing to do, the faster you’re going to be able to sell your properties and get top dollar for them.

Now, I’ll show you exactly how to wholesale for top dollar.

WHOLESALING FOR TOP DOLLAR
One of the methods for achieving top dollar in wholesale transaction is by providing 100% financing for your buyer. This is a method whereby you structure the deal so your buyer can purchase the house with little or no money down. For example, maybe a buyer wants to put just $3,000 down. If you make your price attractive enough, they will want to find a private or hard moneylender who will loan them the purchase money on the house-and also the rehab money.

In effect, if you want a higher price, you have to be willing to carry back a second mortgage for the seller. This way the buyer will be into the deal for little money. I recommend that you don’t carry back 100% of your wholesale fee. The buyer should be willing to put down at least $3,000 to $5,000 before you’re willing to carry back the rest. After all, you don’t want to be in on the deal and receive no money at all! But, if you have that $3,000 to $5,000 and the buyer defaults, you can then choose to foreclose on the house and get it back. You’ve made your money and can move on to the next deal.

There’s a right way and a wrong way to work with sellers of wholesale properties. In this article, Tim Mai shows you how to make profitable deals in sometimes difficult situations.

Contact Sellers of Wholesale Properties and Work with the Them the Profitable Way!

Use Tim Mai’s Effective Sales Technique to Convince Homeowners to Sell!

In this article, I’ll show you how to deal with potential sellers of wholesale properties and convince them that your offer is the best one going!

Once I’ve located a seller, I normally use the following dialogue:

Tim: “Hi, may I speak to John, please?”

John: “This is John.”

Tim: “Hi, John. My name is Tim Mai. I’m calling about the house on 123 Main Street. “I’m possibly interested in buying your house. (Pause) If I can pay all in cash and close quickly, what’s the least amount you’d take?”

Notice that with the last sentence I’ve been very direct and let them know what I want to achieve. The seller will respond with one of these responses:

John: “I’m not interested. The house is not for sale.” Or%u2026″How much will you offer me?” Or%u2026″Yes, I do want to sell, and I’m asking XXX dollars.”

Depending on the response, your answer will vary. Let’s look at this in more detail below.

Seller’s First Response: House Not For Sale
If the seller says the house is not for sale, then tell them, “Well, John, what are you going to do with the property?” The purpose of this question is to get the seller to open up. You want to know what their plans for the property are so you can see what their motivation level is. The more you can get them to open up, the better it is for you.

If they say they’re not interested or haven’t decided yet, then ask, “Can I follow up with you within the next two weeks?” If they’re open to this idea, I’ll follow up within that time period or sooner. If they’re non-committal, then I’ll follow up once a month. When the call is completed, take the property information and put it in your tickler file so you’ll be sure to follow up. Persistence is often the key to success! So, even if they don’t want you to call back, still follow up.

You can do it with postcards or letters (every 30 days). In general, keep following up until they tell you to stop contacting them. You can do these mailings yourself, or you can out-source them. I like to use a mailing company to do this task since I can better spend my time on more profitable activities (like finding more properties!).

Or, you don’t even have to use a company. If you have a stay-at-home mom who’s a tenant in one of your properties, you can pay her to write the letters and mail them for you. This is leveraging the time and talent of other people so you don’t end up going crazy trying to keep track of minor details.

Seller’s Second Response: What’s Your Offer?
When you get this response, don’t give the seller a price; try to get them to name one. Instead respond with a remark like this: “Well, John, I don’t really know the condition of the house. Can you tell me a little bit more about the kinds of repairs it needs?” If they ask why you don’t already know about the condition, you can respond with, “I drove the neighborhood and found your property interesting. But I haven’t seen the inside so I don’t really know its condition. Please tell me more about it.”

Again, the purpose of this remark is to get them to open up. You want to find out if they have a real need to sell the house, or if they’re just trying to get a price out of you and aren’t all that serious about selling. Once you have that information, ask again, “If I can pay all cash and close quickly, what’s the least you would accept?”

If sellers insist that you give a price, then respond this way: “Assuming the house is in the same condition as some of the other ones in the neighborhood, my investors and I have been buying between $20,000 to $40,000 (or the appropriate figure), depending on its actual condition. What if that’s all I can offer you?”

Depending on the situation, they may hang up on you or give you the response you’re looking for. But, even if they hang up, you’ve put the idea in their head that your offer is how much the properties in their neighborhood are going for and created more realistic expectations on their part. Another seller response may be, “No way will I accept that amount. I want at least $60,000.” So, now you’ve gotten them to name a price!

Always offer sellers a range of prices. You don’t want to commit to a specific amount because you haven’t seen the condition of the house yet. You may get to the property and find it needs some relatively expensive repairs. In that case, you can then come back and re-negotiate the price to account for those repairs. Also, a range prevents the seller from getting offended by an exact price. In other words, you’ve created a comfort zone for both you and a seller.

Here’s an example to illustrate how to operate in this situation: Assume you’re interested in a two-bedroom house with a one-car garage in a lower-income area of your targeted area. You know you can buy one for between $15,000 to $20,000. You also know that the house would probably require between $15,000 to $25,000 in repairs.

Let’s assume the seller agrees to a $15,000 price. You know a house like this would retail for $60,000 to $65,000. You also know that a rehabber would be happy to make $15,000 on the property. So, you do “backtrack” calculations to figure out if the deal is a good one: Assume that the retail price is $65,000, and repairs will cost $20,000. You know a rehabber can sell it for $65,000 minus $20,000 for repairs. That comes to $50,000. So, the rehabber will buy it for $30,000. So, if you can buy the contract for property from the seller for $15,000 to $20,000, you’re good to go. In fact, even if you have to pay $25,000 for it and then resell it for $30,000 to the rehabber, you’re still making a good profit.

In a moderate-income neighborhood, the competition is greater so there’s a higher demand for these properties. Therefore, you should be willing to pay more than in a lower-income neighborhood. Here’s an example: Let’s say a house is worth $100,000 and needs $10,000 in repairs. In the moderate-income neighborhoods, houses typically need fewer repairs than the low-income houses. Let’s assume these repairs range between $7,000 and $15,000, and you typically wholesale these at 85% of value.

Let’s see what the calculations look like. A house worth $100,000 needs $15,000 in repairs. Minus the repairs, the price is now $85,000. You can sell the house for 85% of that amount which equals $72, 250. Now you know that you can sell for that amount. So, now your job is to get the house for anything less than that. If you can get it for less than that, then that’s great. You’ll make your money there.

My goal on a wholesale deal is to make at least $10,000 so I always account for that amount in my offers. If I can’t get at least ten grand, the least amount I’ll settle for is $3,000. If I can’t make the $3,000, then I simply put the seller in my tickler file and follow up with him or her a month or two months down the road.

If you find a home and you think there might be something there but aren’t sure, my advice is to go ahead and put it under contract immediately. Then, look for a buyer. If you find you can’t make the $3,000 minimum, then go back to the seller and negotiate the price down.

So, how do you get the lowest price from a seller at any point in the conversation? That’s the subject of the next article.

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

Making Great Things Possible!!!

Good profits can be made in the wholesale real estate market, there’s no doubt about that! But, first, you must identify the ideal areas and neighborhoods in which to find wholesale properties. This article will show you exactly how to do that with common sense guidelines I’ve developed through years of investing in this market.

Ideal Areas and Neighborhoods for Wholesale Real Estate Properties

Target the Right Areas and Neighborhoods for Maximum Wholesale Profits

In an earlier article, I showed you how to identify the perfect wholesale properties. In this article, I show how you target the ideal areas and neighborhoods in which these properties are found.

For wholesaling, the ideal property targets are located in lower income areas. I’d advise against holding on to properties in these neighborhoods. You can get several hundred dollars a month in cash flow from that method; however, you also get giant headaches because of the kind of tenants who occupy your properties. So, why suffer all that trouble when you can wholesale these properties and make a good profit?

Believe it or not, there are investors who do buy and hold properties in lower income areas. These individuals are your target audience. In typical low income areas, you’ll find that 80% of the properties are tenant-occupied and only 20% are owner-occupied. That means you have a lot of tenants who don’t take care of their properties. This leads to a lot of vacant or ugly lots and houses, and they’re ideal for wholesaling.

So, how do you know if an area is low income, moderate income, or middle income or up? And what kind of strategy should you pursue in each of these areas? Let’s look each of these areas in turn to answer those questions.

Low Income Neighborhoods
Generally speaking, you can recognize these areas by their “anchors”-businesses that are a mainstay of the community. In low income areas, these tend to be non-branded pawnshops, bail bonds, “buy here-pay here” used car lots, non-branded “mom and pop” stores, etc. Depending on where you live in the country, property values can range from under $90,000 in value to around $300,000 (as of this writing-values change, of course). As mentioned above, a low income neighborhood is an ideal area for the strategy of wholesaling.

Moderate Income Neighborhoods
Although these neighborhoods tend to have the same anchors as low income areas, they’ll also have nationally branded stores in the mix-Shell, Stop ‘n Go, 7-Eleven, etc.-as well as churches and schools. The properties are about 50% owner-occupied and 50% tenant-occupied. This fact alone tells you that it’s a more stable area than a low income neighborhood. That, in turn, means there’s more competition among investors because they know many people want to live in the area. Plus, the buyers will tend to be of better quality with more income. Because of all these factors, you can pursue three strategies, depending on your objectives-wholesaling, lease options, owner financing, or retailing. Depending on where you live, property prices can range between $90,000 to $125,000

Middle Income and Up Neighborhoods
In these neighborhoods, the properties are 80% owner-occupied and only 20% tenant-occupied. These areas are anchored by shopping malls, movie theaters, restaurants, Starbucks, etc. As you might expect, such neighborhoods are not ideal for wholesaling or rentals since they’re so stable. However, they can be good areas for retail or lease option strategies. Depending on where you live, properties will range from $120,000 and up.

From the information above, you can see that your wholesaling efforts should target two of the three neighborhoods-low income and moderate income.

Where to find these wholesale properties and neighborhoods? Go to www.DoDeals.com!

Real Stories from Real People…

Finding Deals for the Smart Investor-The Basics

One of the most effective ways to find wholesale deals is called “driving for dollars.” That is, you simply drive around targeted neighborhoods to locate ideal properties, or you have someone drive for you-a “bird dog” or a “property scout.” Either way will work. It all depends upon how much time and money you have. For example, if you’re employed full-time, it’s most likely difficult for you to drive for dollars. In that case, you can hire a bird dog to do the job for you. On the other hand, if you’re full time, then you can do the search yourself and forgo the expense of paying a bird dog. Below, I tell you how to find bird dogs, how to pay them, and methods to train them.

Bird Dogs – How To Pay Them

You can use several different methods to pay bird dogs. You can pay them anywhere from $1.00 to $5.00 per address or $5.00 to $10.00 per lead, or $250 to $1,000 per deal. In order to make the job worthwhile, you have to direct birddogs to neighborhoods where they’ll find a good supply of vacant properties. Otherwise, it won’t make financial sense for them. For example, if you direct them to a neighborhood where they find only two houses per hour of driving, that’s only a $2.00 per hour rate, plus they have to pay for their gas. Nobody’s going to work for that rate! On other hand, if you direct them to an area where they’ll find, say, 30 houses in an hour, then it will pay for a birddog to do the job-30 houses X $1.00 = $30 per hour.

The Use of Signs, Letters and Flyers

I use several inexpensive and effective methods to attract the attention of sellers. Each of those methods is described below.

Signs
Depending on local ordinances, you can put out “We buy houses” signs at strategic points in neighborhoods to attract the attention of sellers. By strategic points, I mean put them out at every entry and exit to a neighborhood and at different intersections so they’re easily visible and will attract the greatest number of viewers.

If you’re farming lower- and moderate-income neighborhoods, you can put signs out one time to see what happens with them. If they’re picked up quickly, then you don’t need to worry about putting them out again. If the signs stay up for, say, a week to two weeks, then continue to put them out. You want to make sure everyone in the neighborhood knows that you’re buying houses.

Some cities will let you put the signs up on telephone poles; some won’t-it all depends on the local ordinance. Be sure to check ahead of time because some cities will fine you for doing so, and the fine can be a substantial amount.

Another method I use is to place signs in the front yards of vacant houses if I haven’t been able to track down the sellers. This often attracts the attention of neighbors who think that you’re trying to sell the house. When they contact me, I tell them, “Hey, I don’t know what I’m going to do about the property yet. Let me get your information. Tell me, how much can you pay? How much can you pay per month? How much can you put down?” This method builds up a list of interested buyers. Then, when I do track down the sellers, I know what to offer and can make money on the deal.

Letters
A letter is a particularly useful technique when you’ve located owners who are facing bankruptcy and/or foreclosure. The emphasis should be on helping the owner out of a bad situation.

Flyers and Post-it® Notes
These items are part of your mass marketing strategy. You can hire companies to do door-to-door flyer distributions (look in the Yellow Pages). The cost can be low, depending on how many you want distributed. I’ve had costs in the range of 8 to 12 cents per flyer. You can lower the price even lower by doing a joint mailing with local pizza or other restaurants. In many cases, they’ll be happy to joining forces with you to get their costs down. The really beneficial part of this arrangement is that they’ll give you back the addresses of vacant houses.

In terms of Post-it notes, you can hire companies that will print your information on these notes. Do a Google search on the Internet, and you’ll find many firms who offer this service. You can stick them on doors and attract the attention of potential sellers and buyers.

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