How to Accurately Estimate Repair Costs for House Flippers
The biggest mistake you can make as a newbie is underestimating rehab costs. I see it all the time. A new wholesaler sends out a deal, that isn’t a deal at all, because they grossly underestimating the rehab cost.
Hoarder houses are homes nearly every real estate professional will come across in their career. While they’re often unhygienic and in disarray, hoarder houses may present an excellent opportunity for savvy real estate investors and wholesalers who have experience in turning hoarder houses into livable properties.
You hear me repeat this a lot: Wholesaling is sales. Our customer is the seller and we are selling them a service. That can be confusing since our service involves buying their house. So wouldn’t we be the buyer because seller is selling us on their home? Technically, yes. But YOU need to be the one selling your service.
I’ll say this, if you let a seller sell you on their home, you will probably offer too much. So no, you are not the customer.
In wholesaling, you need to focus on what problem you are solving for the seller. What you are bringing to the table. You can offer speed, convenience, no fixing anything, no cleaning, no banks, no appraisals, confidentiality, etc. Know your value proposition and be prepared to discuss it with them!
The Dave Ramsey Ken and Barbie reference is one of many references the financial guru is known for.
Who is Davey Ramsey?
Dave Ramsey is a popular talk show host and best-selling author who has made a name for himself in the personal finance and investing space. He’s an authority figure, thought leader, and financial expert who helps people that call into his show with financial advice and ways to get rid of debt and become financially free.
Dave has had his fair share of bizarre calls from people with major financial problems, mountains of debt, or homes soon to be foreclosed. Some calls became memes spread across the internet which spawned websites dedicated to the memes stemming from his show.
In step 2 of the step-by-step wholesaling breakdown, I’m going to tell you how to talk to homeowners using my motivated seller script. Well, it’s not really a script, but rather a list of questions (I’m not a script guy!). More importantly, I’m going to tell you how to uncover motivation by asking specific questions and how to schedule an appointment.
If you already completed step 1, you should have identified several distressed properties by driving for dollars. You should have large list of property addresses. If you followed my direction, you should have also left handwritten notes with your phone number. Now you need to prepare yourself to answer the phone and find out if these homeowners are interested selling their home.
Real estate investing is so accessible today that you no longer need to reside in the same state you invest in.
This begs the question for real estate investors just getting started: How do you choose a real estate market that is profitable and checks all the boxes in terms of safety and being in a desirable location?
If you don’t live close to your investment properties, you’ll need to hire a property manager to handle the day-to-day upkeep which is an added expense that many new investors don’t have the budget for.
But if you’re in a place where you’re trying to choose a real estate market, this article will lay out everything you need to know before settling on a location to put down your roots. We’ll also discuss the top 7 real estate markets that are the best choices to invest in real estate today.
How I Turned a Side Hustle into a Million Dollar Real Estate Wholesaling Business in Less than a Year
For most of my adult life, I earned a respectable six figure income in sales. I was a corporate America junkie, grinding out the 9-5 in what seemed like a never ending rat race. In 2019, I earned a modest 130k from my W-2 income. Fast forward to July 2022 and my real estate wholesale business is generating over 100k per month.
In 2021, that allowed me to:
Pay cash for a duplex
Buy 2 cottages on Lake Michigan which will be Airbnb’s
Complete a 120k renovation so we can refi and pull our cash back out
Payoff a $70,000 loan on a vehicle that we now own free and clear
Payoff a $40,000 loan on our boat that we now own free and clear
Payoff a $20,000 loan on our camper that we now own free and clear
Close on a $1.2MM construction loan for our new primary residence
Buy a nice pair of sunglasses 😎
Still have plenty of disposable income left over to re-invest in the business
Email marketing is a super important component to wholesaling real estate. Honestly, I don’t know where I would be without. Somehow, I’ve managed to survive 3 years without paying for it. They almost got me the other day when I hit my monthly send limit. Lucky for me it reset the next day. Needless to say, Mailchimp has a free package that is pretty awesome.
If you follow my blog, you should know that I like teaching. You should also know that I like step-by-step teaching. If you don’t know how to do something after I explain it, I haven’t done my job! (well, I suppose it’s not my job, but for the sake of this blog, it is). In this post, I will talk about the first step in wholesaling real estate, finding motivated sellers.
For the next several posts, I’m going write short posts and YouTube videos explaining each step of the wholesaling real estate process. Of course, if you have have $10 laying around, you could always just buy my ebook too.
As a real estate wholesaler, I have no choice but to pay very close attention to the market. Everyday, I’m negotiating with sellers with and marketing deals to cash buyer investors. When there is a blip on the radar, I feel it immediately. There is no question things are slowing down. While I don’t have a crystal ball, I do have housing market predictions for next 5 years.