Wholesaling traditionally has been used to make fast money in real estate without having to purchase properties. The property is put under contract with the longest possible inspection period so the buyer (investor) can sell the property without having to put up a deposit or actually close on the house.

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Determining property value in the past was much easier than it is today. In the good-old-days of two years ago, it was easy to look at comparable sales in the neighborhood and determine a Fair Market Value (“FMV”) for your property. It was so easy that most Broker’s Price Opinions (“BPO’s”) and appraisals were done as drive-bys or without actually seeing the property. It wasn’t necessary because of the volume of sales in any given neighborhood.

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As an investor becomes more proficient at evaluating repair costs he learns what to expect for any sized property. Size does matter when dealing with repairs because the bigger the home, the more expensive for the basic mechanical systems. Mechanical systems include the roof, structural aspects, air and heating, windows and doors, plumbing, sewer/septic, and electrical. I developed a unique software program that uses the living square footage of the property to calculate repairs for everything from floor coverings to roofs. Pro-investors use this software because of its accuracy, ease of use, and they can carry it with them in a laptop connected to a printer in their car to generate the sales presentation for the seller. You can see what it does at http://www.ExcelRESoftware.com.

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Discovering how to keep professional real estate investors from stealing your signed deals almost sounds paranoid. Unfortunately it is an all too common occurrence that professional investors (“pros”) use to get the deal. The pros or their representatives (commission based and hungry) make a presentation to the seller that simply says “We buy 50 properties a month, we close quickly and we are honorable. What we want you to do is sign a contract with any other investor so we know it’s a real offer and then call us. We will give you another contract for at least $2,000 more than he offered.” Too many homeowners fall for this and call the first investor back to say they sold it elsewhere or they decided not to sell at all. In every state that I know of this is a breach of contract and knowingly selling to another party while under contract is fraud. But the pros know that most investors won’t even challenge the homeowner and will drop it.

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It is not a myth that you can buy properties with no cash or credit. But, as we will see, in a few cases minimal funds may be needed, but the buyer’s credit is never an issue. You can “buy” a property by putting it under contract for no cost, not even a good faith deposit. You may have heard that you must give at Bank Routing Number Arrowhead Community Bank least $1.00 to “seal” the deal. This is inaccurate because contractually a deal is sealed for “the sum of X dollars, or other good and valuable consideration”. Good and valuable consideration is, in fact, the act of buying the property, so what you may have heard is inaccurate. Because this “dollar for deals” psychology is so ingrained in the public’s minds I use it to enhance the belief that the homeowner has sold his home once he signs the Purchase and Sale Agreement.

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Getting a seller to sell you a property at less than they are offered by another buyer seems ridiculous, but it isn’t. I have often had the problem with wholesalers making a presentation to a seller that I have been “courting” and made an offer. Usually they will come back after I made the offer and try to buy the house for $1,000 to $5,000 more. In another email in this series I will discuss what got the seller to accept my lower offer in the first place, but for this email, I will stick to how to keep the seller on track with you.

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When you meet with a homeowner, and you will have to do this to get the best deals, you will find that the most motivated ones have contacted every “Cash for Houses” advertiser on the internet and from local bandit signs. This means that the homeowner may have already come in contact with “professional buyers” who have done purchased houses many more times than you have so, you need an edge.

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