It is absolutely imperative that you get into the mind of your buyers… BEFORE… contracting on a property. That means that you need to calculate how much the buyer is into the property for – your selling price plus repairs – and also taxes and insurance. You don’t have to worry about a mortgage payment, because we’re only dealing with cash buyers right now.
In addition, you need to know what your buyer is going to do with the property once he buys it. Here is a hint. If the neighborhood is busted, he’s probably going to rehab and rent. If it’s decent, or even nice, he is probably going to rehab and sell.
If he is going to rent, you need to find out what the going rent is for that type of property, in that neighborhood. You can find this stuff on the internet.
Once you have all this info, you can easily calculate cash buy, plus repairs, plus taxes and insurance, minus rent revenue, plus minor repairs or updates throughout the year.
Now, you can decide if this is a good buy for HIM (not for you). If it is, contract on it and present it to your buyers.
How?
Mr. Buyer, here is the deal, in less than 5 years, you will make all of your money back and own this property free and clear. After that, you can expect to pocket about $12,500 in profit every single year that you continue to own the property.
I received a question the other day, asking me if you can flip houses in a good economy, and what the differences are between flipping houses in a good housing market vs a bad one. And here is my response…
If you start your wholesaling business the right way, you will have to tweak your business very little, as the housing market changes. If you do not start your wholesaling business the right way, you will be forced to change as the market changes.
Here is how you do it:
1. Locate your city’s active cash buyers.
2. Find out what they want in a property, where and how much they will pay for it.
3. Go find them deals.
What most do is take the market for granted. For example, when the housing market was good, nobody much cared about locating and forging relationships with buyers. It was a given that the property would sell.
Then when the market changed, all of a sudden, wholesalers were scrambling for buyers. But, if they would’ve forged those relationships in the beginning, they wouldn’t have to worry about it. And, while everyone else is freaking out, they would still be prosperous.
How to flip houses with no money? Can you? Should you?
1. If local wholesalers won’t teach you how to flip houses, hire a national mentor, like The Maestro – Wholesale Real Estate Coaching. I most likely do not know your city as well as my own. However, I know real estate wholesaling. And that doesn’t change much from town to town.
2. And if you have no income and no money in the bank, starting a new business may not be the best thing to do right now. I never want to discourage anyone from chasing their dreams. I did it and it worked out great for me. However, I had a job and money coming in each month. Not a lot, but enough to pay my bills.
Many people are out there like circus barkers shouting about flipping houses with no money. Beware! Get help from a pro.
Aaron Ward wrote me and asked, “Maestro, how do I get your low offers accepted by sellers?” Great question, Aaron. And I’m glad you asked.
There are many tricks and tales you can tell the seller to convince him or her. But, the best way to insure your low offer is accepted, is to only deal with sellers who are in distress. If they truly feel like you are their only option, they will take just about any offer you put in front of them…
Also, get my e-book, Raining CA$H. Comes free with my first flipping houses book, Quick Flips and Fast Cash: A Moron’s Guide to Flipping Houses.
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