The current real estate market trends are that ever since the mortgage crisis ended a new round of players has come on the scene. These are the hedge funds and larger moneyed players who have raised new money or shifted it from the risky stock market. Their insatiable buying has partially caused an unprecedented rebound in many areas of the country in single family home prices.

When interviewing perspective students, I get the question all the time, "Isn't the market too high to make any money?" The simple answer is that it depends on what area of investing they are going to do. If they want to own income properties and they pay retail prices, yes, the market is too high. You'll get a specific income but as interest rates climb your principal value of the property will decline.

What about rehabbing and selling to a retail buyer? As long as you buy at the right price, come in on budget for costs and control carrying costs, maybe. The maybe part is you have to sell the property to make money and getting financing for an end-buyer can be tricky as interest rates rise.

So what about wholesaling? This type of investing rides what is called the "differential curve" or a very tiny increment of real estate cycles. For example, if the average real estate cycle is 8 – 10 years, the average wholesale deal lasts less than 30 days and often actually only one day at the closing. This is referred to as double closing and often the investor has no money in the deal as he can use transactional funding to pay for the original purchase. He then sells it to his end-buyer a few minutes or hours later.

So, whether the real estate market is flying, flat or falling, the wholesaler is in a deal for a very small time and he takes no market risk as do rehabbers and landlords. Well, then why doesn't everyone wholesale? Simply put, most of the real estate community doesn't understand wholesaling or they don't want to take the time to learn how to do it.

change your life mentoring click button j 300x236 1The key is for the wholesaler to get a real deal on every "purchase" he makes so he can resell it to an end-buyer (rehabber or landlord) with some profit potential still in it. If he can't find a buyer during the inspection period, he has two choices, first, to give it back to the seller before the end of the inspection period or risk his earnest money deposit (EMD) and keep trying to sell it before the closing. Here his risk is his EMD only if he doesn't close.

For wholesalers, the best markets are falling ones because sellers are panicked to get out. Flat markets offer no advantage except that the buyers may be out in droves so investors need to build up their buyers lists to get their deals sold. In rising markets, wholesalers have a multitude of buyers but seemingly fewer sellers – again a great buyers list is also the remedy here.

In summary, it doesn't matter to a wholesaler which way the market is going or its velocity – what matters the most is having a strong buyers list of actual people who are buying properties and can get the money to buy more. Typically you can find these real buyers in the public record by looking for LLC's and Corporations because banks will generally not fund these entities. Therefore they are cash buyers or they have borrowed hard money to buy their properties

To your limitless success,
Dave Dinkel

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.

The current real estate market trends are that ever since the mortgage crisis ended a new round of players has come on the scene. These are the hedge funds and larger moneyed players who have raised new money or shifted it from the risky stock market. Their insatiable buying has partially caused an unprecedented rebound in many areas of the country in single family home prices.

When interviewing perspective students, I get the question all the time, "Isn't the market too high to make any money?" The simple answer is that it depends on what area of investing they are going to do. If they want to own income properties and they pay retail prices, yes, the market is too high. You'll get a specific income but as interest rates climb your principal value of the property will decline.

What about rehabbing and selling to a retail buyer? As long as you buy at the right price, come in on budget for costs and control carrying costs, maybe. The maybe part is you have to sell the property to make money and getting financing for an end-buyer can be tricky as interest rates rise.

So what about wholesaling? This type of investing rides what is called the "differential curve" or a very tiny increment of real estate cycles. For example, if the average real estate cycle is 8 – 10 years, the average wholesale deal lasts less than 30 days and often actually only one day at the closing. This is referred to as double closing and often the investor has no money in the deal as he can use transactional funding to pay for the original purchase. He then sells it to his end-buyer a few minutes or hours later.

So, whether the real estate market is flying, flat or falling, the wholesaler is in a deal for a very small time and he takes no market risk as do rehabbers and landlords. Well, then why doesn't everyone wholesale? Simply put, most of the real estate community doesn't understand wholesaling or they don't want to take the time to learn how to do it.

change your life mentoring click button j 300x236 1The key is for the wholesaler to get a real deal on every "purchase" he makes so he can resell it to an end-buyer (rehabber or landlord) with some profit potential still in it. If he can't find a buyer during the inspection period, he has two choices, first, to give it back to the seller before the end of the inspection period or risk his earnest money deposit (EMD) and keep trying to sell it before the closing. Here his risk is his EMD only if he doesn't close.

For wholesalers, the best markets are falling ones because sellers are panicked to get out. Flat markets offer no advantage except that the buyers may be out in droves so investors need to build up their buyers lists to get their deals sold. In rising markets, wholesalers have a multitude of buyers but seemingly fewer sellers – again a great buyers list is also the remedy here.

In summary, it doesn't matter to a wholesaler which way the market is going or its velocity – what matters the most is having a strong buyers list of actual people who are buying properties and can get the money to buy more. Typically you can find these real buyers in the public record by looking for LLC's and Corporations because banks will generally not fund these entities. Therefore they are cash buyers or they have borrowed hard money to buy their properties

To your limitless success,
Dave Dinkel

Frequently Asked Questions

1. What Should I Do If a Seller Ghosts Me?

If you feel you have been ghosted, act decisively and quickly. If you have tried texting and calling, it's time to drive by the seller's location. I always take the recorded Notice of Interest or Memorandum of Contract to leave, so the seller knows it exists. Go by at a time when you know they will be there and don't be confrontational, just get the facts.

In our experience with new investors, the chances of losing a deal with no contract is likely over 85%. Verbal commitments do not apply in contract law; get everything in writing, especially contract changes.

Different 'gurus' have different opinions, but our experience is finding motivated sellers and then a buyer for your deal. Ideally, you should be finding motivated buyers from day one, so you are ready when you find a seller. Buyers are easier to find as you can see at https://davedinkel.com/products/

Prevention only comes about by thinking a Black Hat wholesaler will be coming after your deal. First, educate the seller that an unscrupulous investor may come by and illegally offer more money, have the seller sign your "Notice to Homeowner," stating that he understands he cannot accept another offer.

There is nothing illegal about changing their mind, it is called seller remorse and occurs about 25% of the time. However, if they have signed your contract, it can't be cancelled for any reason unless acceptable to the investor/buyer.

If price is an objection, you need to find out how important it is to sell fast and for cash. If the seller isn't under a time constraint, has a money issue, or has a personal dilemma, he may not agree to the price you need. Offer to help move and build it into your price before you make your offer. However, never give the seller money; only pay the moving company, and only after closing (escrow with a closing agent). If fear is the seller's issue, break it down into what the real problem is and answer their objections one at a time.

You can get to the root of motivation for a seller by asking a few questions. First, "Why are you selling?", "How soon can you close?", and Are you ready to sign an AGREEMENT today, if not, what do I have to do to make you comfortable?'. The answers to these questions will determine the truth about your seller's motivations.

The best times to involve your attorney in your deals are to have him review your contracting, review the signed contracts from the seller and end buyer, have him open escrow and start the title work, negotiate with city or counties for lien reductions or mortgage payoffs with lenders, and to close the transactions." Your attorney is not the adversary; it's the opposing party's attorney who is a deal killer, and having your attorney allows him to help overcome this obstacle.

The key to successful prospecting and bringing back deals that didn't close is to follow up until the property is transferred in the public record. Some of our deals have been where the seller came back to us months and years later because they felt comfortable with us and not the other "pushy" investors who contacted them.

Your contract's most important clauses are inspection period (as long as possible), when the EMD must be deposited if at all, your ability to access the property, any added clauses specific to the property that will protect you against seller claims later that were verbal only.

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.