1. RETAILING
- Buying Wholesale Property
- Rehabbing if Necessary
- Reselling it on the Retail Market for Profit

2. WHOLESALING
- Acquiring Interest in a Wholesale Property
- Quickly Reselling Your Interest for Profit (usually to another investor)

FRAUDULENT FLIPPING:

- Flipping becomes illegal when resale relies on inflated appraisals,

fake documents, sales to “straw” buyers who represent original

sellers, and “phantom” second loans from an unscrupulous lender.

OVERVIEW OF RETAILING:

- Usually can make larger chunks of money.
- Great way to build your Real Estate Investing business.
- Requires more time and patience than wholesaling.
- Usually requires lots of cash or financing.
- Harder for beginners to get started.

OVERVIEW OF WHOLESALING:

- Requires little or no money.
- Quick paychecks, you can get paid right away.
- You don’t have to go to any closings.
- Learn a lot with little risk.
- A great place for beginners to start.

WHOLESALE DEALS / FOUR NECESSARY INGREDIENTS:
1. Cash Buyers (Investors / Rehabbers)
2. Motivated Sellers
3. Workable Situations
4. Marketing / Communication System
- For Your Buyers
- For Motivated Sellers

BASIC WHOLESALE PROCESS OVERVIEW:

1. Find Your Buyers in ADVANCE if possible.
2. Find a Good Deal or Make It Find You.
3. Do The Numbers.
4. Tie It Up Under a Buying Contract.
5. Contact Your Buyers About the Deal.
6. Pass the Deal Along for a Referral Fee.
- Via “ASSIGNMENT OF CONTRACT”
- Via “SIMULTANEOUS CLOSING”
Developing Your Buyer’s List:

WHERE TO START LOOKING:
1. Local REI Group.
2. “We Buy Houses” Ads and Signs.
3. Classified Ads Targeting Investors.
4. Classified Ads For Your Deals

5. Direct mail.
6. “For Rent” Signs You See.
7. Construction / Rehab Homes.

WHAT TO ASK THEM:

- Buying Criteria
- Types of Houses
- Areas of Interest / Disinterest
- Typical Buying Formula
- Contact Information

THE ELUSIVE MOTIVATED SELLER:

- Pre-Foreclosure
- Bankruptcy
- Divorce
- Death
- Fire
- Tired Landlords
- Banks / Lenders (REO)
- Moving / Relocation
- Two House Payments Behind

Methods of Finding Motivated Sellers:

1. Direct Mail
2. Driving For Dollars
3. Advertising
4. Networking
5. Foreclosure Realtors / MLS
6. Bird Dogs / Scouts
7. Local Newspapers

Favorite Methods:

1. Direct Mail: The Gift That Keeps On Giving
- Get a Good Letter
- Get a Good Mailing List (buy / compile)
- Be Consistent
- Possible Targets:
* Tired Landlords
* Vacant Property
* Condemned Property
* Pre-Foreclosures / Notice of Defaults

2. Driving For Dollars: Roll Up Your Sleeves
- More Aggressive, Labor-Intensive Approach
- Yields Higher Response Rate
- Look for Tell Tale Symptom’s of a Distressed Property.
- Find The Owner:

3. Advertising: Consistency is The Key
- Easier, More Passive but also takes more time.
- Bandit Signs
- Business Cards
- Classified Ads
- Flyers On Ugly Houses

A FINAL WORD ABOUT FINDING MOTIVATED SELLERS:

* LOWER END HOUSES:
- Typically Your Greatest Volume of Deals

* MIDDLE CLASS HOUSES:
- Typically Your Sweetest Deals

* UPPER END HOUSES:
- Typically You’ll Want to Avoid These for Wholesale Flips

Things to Avoid:
- Skinny Deals
- Total War Zones
- Weird Houses
- No Legitimate “Out” In Your Contract

TYPICAL FORMULA:

MAO=Maximum Allowable Offer

ARV=After Repair Value

MAO = ARV X 75% minus estimated closing costs, minus estimated repairs, minimum buyer profit and your profit.

FINAL IMPORTANT THINGS TO REMEMBER:  DON’T BE GREEDY:

- Buy Low – Sell Only Slightly Higher.
- Build Long-Term Relationships.
- Volume Beats Any One Deal.

YOU ARE A PROBLEM SOLVER:

- Focus On Meeting People’s Needs First.

ALWAYS WITH INTEGRITY:
- No Deal is EVER Worth Your Reputation.
- Remember the Golden Rule and Practice It Daily.

- It has to be win-win for everyone involved.