How to Wholesale Real Estate Step By Step (Even If You’re Broke!)

in this video I'm going to share with you how the wholesale real estate even if you're broke what's going on everybody is Jamel Gibbs your family-oriented entrepreneur welcome to another video so in this video what I'd like to do is show you how to wholesale your first real estate deal even if you're limited on Capital and the reason why I'm putting this video together is because I believe that wholesaling real estate is the entry level to investing in real estate and of course you can build an entire business with wholesaling real estate what you're allowing yourself to do is get involved in real estate with very little risk with no money no credit none of that stuff needed in order to really be able to get your feet wet in the real estate investing business now in addition to that I also believe that wholesaling provides you with an opportunity to understand what a real deal is in order to grow your business efficiently and effectively you need to get discounted real estate and when you're wholesaling real estate this is how you learn how to do it so I really wanted to put this video together in an effort to allow you to understand what wholesaling is but not only that I also want to show you how to get your first wholesale deal as quickly as possible using modern day technology and other resources in order to be able to move relatively quickly this video is going to be a step-by-step process on how to do it I'm going to show you everything that you need to know in order to be able to wholesale your first deal all you have to do is go out there and do the work nothing is easy you're gonna have to work for it but at the end of the day if you put in the time and effort you'll be making money as a wholesaler in no time now if you've been on my channel for a little while you know I teach wholesaling you also know that I teach passive income investing and out of the two I do prefer passive income investing you need the quick cash from wholesaling but you also need the monthly passive income the cash flow from rental properties so you really want to have a com combination of both of these in order to be able to have an effective real estate investing business I'm going to show you a step-by-step process on what wholesaling is and how you can get your first deal as quickly as possible all you have to do is get out there do the work and make it happen so let's jump in now for those of you who really don't know what wholesaling real estate is let me give you a brief understanding of how wholesaling real estate actually works wholesaling real estate is basically finding distressed real estate whether it's physical or financial distress in most cases as a wholesaler you're looking for physical distress and what you're going to do is get those properties at a discounted price and then you're going to go ahead and do what's called an assignment of contract or a double closing based on where you live because in some areas the laws are different and that's something that we'll talk about later on in this video as well so you're either going to do an assignment of contract which is basically sign finding the agreement between you and the motivated seller and then selling your contract for profit you're not selling the house because you don't own the house you can only legally sell a house if you own a house but you can sell the contract that you sign between you and a seller which allows you vested interest in the equity that's in that property and you can sell a portion of your Equity to someone else for a profit another way to be able to do this is to double close which basically means that you take ownership by using your cash or somebody else's cash and then selling the property right away to your end buyer for a profit so the stress real estate can be financial distress it can be physical distress an example of physical distress can basically be a property that needs some work it needs repair but the owner of the property either don't want to go through the hassle of fixing the property up or they simply just don't have the money the financial resources to fix the property up financial distress can basically mean that a property owner owns a property but they can't keep up on a mortgage for example you have people that inherit properties but don't want to have two properties you have people that are getting a job transfer there's something going on some type of distress some type of problem that the seller has that's causing distress and in turn they would want to get rid of the problem which is ultimately the house so what you're looking for are these problems these critical conditions that these sellers are going through and it's your job to be able to help them get out of the situation now of course you're going to be paid for your efforts in exchange so we'll go through both of these strategies in this particular video in more details so you can understand exactly how it works but just keep in mind wholesaling is being able to find distressed real estate and Contracting that real estate at a discount or purchasing it at a discount and then assigning your contract or double closing the property to an end buyer a cash buyer on the other end so that you can go ahead and make a profit for your efforts another way to think about it and to simplify it for you in layman's terms is think about wholesaling like the pawn shop business of real estate when you go into a pawn shop and you have an item for sale you're not expecting to go into the pawn shop and get top dollar for your item because you know that the pawn shop has to make a profit you know that the pawn shop is not going to offer you what the value of the item is same thing in a wholesaling real estate business a homeowner is looking for a solution to a problem and in exchange for that they're willing to let go of an asset in order to be able to get rid of the problem so they're not necessarily looking for top dollar they're just looking to get rid of an issue and in exchange for that they'll either make some money or get rid of the problem or both but at the end of the day a wholesaler is like a pawn shop in the real estate business and a homeowner is looking for a quick solution to be able to get out of the problem and as a wholesaler obviously you'll get discounted real estate in order to make a profit so I hope that kind of clears things up it makes it easier for you to understand so let's go ahead and jump into the first step that you need to take care of in order to be able to get your first wholesaling deal over the next couple of weeks all right so the first thing that you want to do when you're wholesaling real estate is get your foundation set up now what this involves is getting your business entity set up so whether it's an LLC an incorporation or whatever the case may be what I recommend you do is speak to an attorney or an accountant to get that done and I will leave a link in the description box to an asset manager that I personally use in order to be able to get all of my entity set up for you but in case you wanted to do this yourself I am going to show you how to do this yourself really quickly as well another thing you want to do is make sure that you get your business bank account set up and you also want to make sure that you get your phone lines set up so that you can operate your business effectively so let's go ahead and jump into getting your business entity setup and then I'm going to share with you some other tips on running your entity in order to be able to cash checks within your business and then also how to get your phone lines set up so let's go ahead and jump into this so the first thing you want to do is go to your department of state's website now I want you to keep in mind that all of these sites are completely different so you have to adapt this information adjust it to your local area your area may be completely different than my area your department of state's website I'm willing to bet will be different than my department of state's website but again the idea here is to basically get your entity set up now personally I use Locs when I'm operating my businesses so whether you're a single member LLC or you have Partners let's say you're married and you want your spouse to be a partner or you have a different business partner you might want to file as a partner but again talk to an accountant talk to an attorney to see what best fits you for your local area me personally I've only ever used Locs and the way that I file may be different from what best fits you and your circumstances either way if you don't have the money to go to an attorney you might want to start off as a single member LLC and then grow your business to a point where you can go ahead and hire an attorney to be able to correct your paperwork for you at some point in the near future but again I'm not trying to give you legal or accounting advice I recommend you speak to a professional to be able to get that done but just for the purposes of this particular video I will show you how to get the forms and everything set up through my State's website and again you would have to adjust it to your local area so let's go ahead to sosnc.gov and then once we get there you can see there's a I want to drop down menu again your particular state or your area may be completely different you have to figure out how this works in your area so I'm going to go to I want to and on the business I want to go ahead and start a business I'm going to scroll down to where it says choose a business structure I'm going to go ahead and click on limited liability company then once I click on limited liability company there's a link here where I can get the form so I'm going to go ahead and click on that link and once I click on that link if I scroll down a little bit you can see articles of organization it's 125 dollars to set up in LLC in North Carolina and that's about all the information that I need so I'm just going to go ahead and download This by clicking on it and again this may be completely different in your area but what you're looking for are the articles of organization that you need to fill out in your local area in order to get your business set up now in addition to that I'm also going to go ahead and make sure that my business name is available in the state so I'm going to go ahead to where it says I want to and under business check name availability and it says I want to select what you want to search for which is the company that starts with let's say one two three main street real estate LLC I'm just going to make sure that that name is available that's a fictitious name I just made up and you can see that there are no records found with that name so that means that the name is available so now that I know that the name is available I'm going to go ahead and open up the document and you can see that there's a bunch of instructions that are provided by the Department of State I'm not going to read through that if you want to read through it you can go ahead to North Carolina's Department of state's website and download a copy of this for yourself I'm going to scroll down though to the limited liability company articles of organization section and under the first section it basically says the name of the limited liability company is the name that we just searched for one two three main Street real estate LLC and that is the fictitious name that we're setting up for this fictitious business under the second section what you want to do is have your attorney's name if you're using an attorney to set this up as the organizer or if you're doing this yourself you can use your name with your business address and we'll talk about that in just a moment so I'm just going to type in my name normally I use my attorneys but we're going to use my name and then we're just going to type in my business address right here which is an actual address let's just say 123 Main Street and the reason why you want to use your attorney's name just so you know for your knowledge is for anonymity and for those of you who don't know what anonymity is just for your knowledge it basically provides you with a level of privacy in your business so if you don't want anybody to know who owns the business then you use an attorney or a registered agent in order to be able to hide the ownership of the business now that law may be changing pretty soon where the government wants to know who owns each business and it may be public information but for now this is how we're getting our businesses set up but for the purposes of this particular video I'm going to use Jamel gibbs123 Main Street as a member and organizer if you're doing it yourself this is how you want to do it under where it says the name of the initial registered agent you can put if you have a registered agent you can put registered agent if you don't have a registered agent then you would obviously put your own name if you needed to find a registered agent just go to Google and type in registered agents in your local area so I'm just going to type in North Carolina you can see a registered agent popped up right here on the side so I can actually contact them pay them maybe 50 to 100 bucks and use them as a registered agent for my business but going back to the form here if I use that service I would obviously use registered agent and I'll put their address here put my mailing address here then on the principal office information if I have an office I would put that information here if I don't have an office I will go ahead and check that box here now any other Provisions which The Limited line company elects to include let's say for example an operating agreement which you'll definitely need when you're doing business let's go ahead back to Google I'll show you how to get the operating agreement for free you can literally go to free operating agreement for a single member LLC or for multi-member LLC use let's say one of these form templates Rocket Lawyer you can use e-forms law Depot use one of these websites and you can literally get an operating agreement drawn up for free or you can use an attorney to have this done for you again I'll link in the description box an attorney that you can contact in order to be able to get this done so that's how you get your operating agreement you can attach that information to these forms when you submit to the Department of state's website this is all optional information and I'm not going to fill out but you just fill out the form just go through it's pretty self-explanatory at the end you'll see there's 125 dollar fee you can expedite it for an extra hundred dollars in this state that may be applicable in your state as well but pay the fee get the documents that you need and get your business set up that's part of Step number one in getting your business off the ground now once you have the forms submitted to the Department of State the next thing you're going to have to do is go to irs.gov to get an EIN number now for those of you who don't know what an EIN number is is basically an employee identification number so on the IRS website I'm just going to go to the search bar and type in Ein and then you can see right below it says apply for an employer identification number online just follow the instructions click on apply now and get your EIN number set up once you receive the documents from the Department of State that your LLC has been set up now the reason why you want to have your LLC set up as well as your EIN number set up up front is so that when you're wholesaling real estate and you start to receive checks you can then have a bank account to put those checks into so you're operating a business treat it like a business up front now is this completely necessary not necessarily I went the first few years of being in the real estate business without a business setup and I paid handsomely in taxes because of it so by you to getting set up up front the right way you're going to benefit yourself tax wise protection wise things like that in order to be able to run an efficient wholesaling business you know once you get your forms from the Department of State and you get your EIN documentation take that information and go to a bank to get your business bank account set up now I personally use an online bank which I'm going to leave in the description box for you as well I'll go ahead and leave two banks that I personally recommend I personally use these Banks myself and they're all online let's hassle you'll be able to get your business bank account set up in no time and it's really all you need now if you need a physical bank that you like visiting if you're one of those people then go to a local bank and see if they offer business accounts in that particular bank but for the purposes of this video I'm Gonna Leave the two banks that I recommend in the description box below for you so go ahead and get your business bank account set up now once you have your business completely set up and you have your business bank account out you're also going to need phone lines now personally I like to use multiple phone numbers when I'm operating my business and the reason for that is so that I can track where my leads are coming from and I can put my effort toward those particular channels where those leads are coming from so the best way to do that is to use a service like call rail I'm going to leave a link in the description box for you for that as well if you don't use call rail you can also use the software investor Deal Pro to be able to get the same result but for the purposes of this particular video I'm going to go head to carlrail.com and under pricing you'll see that there is annual pricing and monthly pricing I'm going to recommend you go with the monthly pricing to stay as lean as possible for your business you don't want to be putting out a whole bunch of money up front you want to grow as your business grows and under the plans you want to start with the cheapest plan which is 45 a month and it provides you with five different phone numbers and I've already explained why you want multiple phone numbers so you're going to go ahead and click on start a free 14-day trial I'm going to go ahead and fill out this information and then see you guys on the inside alright so when you first get your account set up and you confirm it what's going to happen is they're going to run you through an onboarding process you don't need any of that you can exit out of all of that stuff and once you get to this page then what we're going to do is go ahead and get your first two phone numbers set up the reason why you want two phone numbers is because one of them is going to be your business cards and your main phone number and the other is going to be your first marketing phone number I'm going to show you how to do your first phone number but then once you're ready to do your marketing you go ahead and get your marketing phone number set up so we're going to go ahead and get your main phone line set up for your business cards and things like that if you decide to get business cards but then we're also going to set up your notifications as well as your call Flow so what we're going to do is go to where it says settings right here I'm going to go ahead and click on on that I'm going to go to create phone number I'm going to go to where it says I'll use the number offline enter a phone number and go ahead and click on numbers setup now once I get to this particular page I'm going to go to where it says number in a specific area code for this particular video we're going to use 336 and then it says what would you like to name this number let's just say main phone line and then click on number feature I'm going to go ahead and deselect call recording and I'm going to go ahead and activate the number and once I activate the phone number I'm going to go ahead and set up my call Flow as well as my notifications Now by setting up my call Flow first what I'm going to do is click on call Flow and go to direct to voicemail now the reason why I want to go direct the voicemail is because I personally don't like to answer or have a phone line answered live unless I have an assistant as you grow your business you will have an assistant and you can split test if answering your calls live versus going direct to voicemail will yield better results for you that's something that you would have to split test in the beginning you want to stay as lean as possible so send everybody straight to voicemail and then call them back if they leave a message definitely call them back first if they don't leave a message and you have missed calls which Caldwell will let you know who's a missed call and who's not you still want to call them back because sometimes people that may be motivated to sell but they just don't leave messages so when you call them back you you're making sure that you're scrubbing through your leads as effectively and efficiently as possible so I'm going to go ahead and click on direct to voicemail and under direct the voicemail you're going to go ahead and click on play recording now what I recommend you do is get a service like audacity which is a free audio download which allows you to record on your computer and record a detailed voice message explaining to your incoming callers the information that you need from now personally I had a professional voiceover done on fiverr.com and I used that voiceover for my business and I provided for my coaching clients as well so when we get our call rail accounts or our phone lines set up we have something already in place which I know yields results but all you really want to do is have a brief message stating that you buy houses you're looking to purchase more real estate in the area if they'd like to sell leave their phone number with the property details and you'll call them back something along those lines should do well enough for you in order to start getting incoming calls so once you record that through let's say a service like audacity and you download the MP3 file you'll go ahead and upload it right here click on Save and then you'll be all set as far as your direct to voicemail setup the next thing you want to do after this is go ahead and get your notifications set up so let's go ahead to the next screen and as you can see on the next screen you can go ahead and set up notifications so I'm going to go ahead and click on create notifications and you can see by clicking on create notifications I can get notifications from all companies directly to me I want calls and text messages and if I want to customize it I can now as I'm creating the notification I want all calls sent to me all interactions and delivery is going to be through email and desktop push notification as well now another thing that I like about callrail is they have this app that you can download onto your phone and your desktop and you can receive incoming calls through your desktop or your cell phone through the phone number that you have on let's say your business card and you can also call back directly from your cell phone using that same business number so even though you're calling from your cell phone nobody will ever have your personal number they'll have your business phone number so you want to get that stuff downloaded and you want to set up to receive notifications so every time somebody calls you whether it's a missed call or a voicemail you'll have the notification sent to you and you know to call these people back so we go ahead and save on that and we'll go through the process in order to get that stuff set up so that takes care of your setup process again you have your LLC set up you have your EIN number you have your business bank account and you have your phone lines that's really all you need Foundation wise to move into step number two which is picking your Market let's go ahead and get into that now step number two is to go ahead and find your Market what I recommend you do is stay local especially when you're just starting out because you know your city better than any other city that you could tap into in order to be able to get your business started so I recommend staying local and if you wanted to expand outside of your local area here's some criteria that you could use in order to be able to find the right Market you want a market that has a minimum population of at least let's say 200 000 up to 350 000 people with a price range of about 250 to 300 000 maybe 350 000 on the median home price range as well now obviously this number can fluctuate based on your location but generally you know secondary free markets outside of the major cities where you want to be located that 200 to maybe 350 000 people as far as population it's kind of The Sweet Spot of where you want to be and as far as price range up to 350 000 is about right now obviously if you're on a smaller Market you're in what's considered a tertiary Market which are great markets as well and those type of markets you can go down to as little as a hundred thousand in the population and maybe a hundred and fifty thousand on a price range but based on where you're located at use those numbers as a way to gauge your Market obviously if you're in let's say New York City or San Francisco or Austin Texas or Los Angeles or some of these higher priced areas you have to go outside of those areas to be able to find markets just like this but use those numbers as a gauge to be able to find the right market for you to get started in now just for those of you who need a little more detail on how to go about finding this information you can simply use Google to be able to do this for example if we go to my computer let's say for example I wanted to type in population of Greensboro North Carolina when I type that in I can see that the population remember what I said 200 to 350 000 people I can see that this population is just shy of 300 000 people and as far as the median price range of a home in the area median price for home in Greensboro North Carolina if I click on that I can see uh just going to realtor.com at the median price range is probably going to be somewhere right around 320 000 for a home so this is right in that ballpark that I was saying you want to focus on so you want to do your research on your local area again you have the numbers for the population and you also have the numbers for the median price range focus on those markets stay as local to where you live as possible and start your real estate investing business from there so that's how you go about finding your Market all right so once you have your Market set the next thing you want to do is narrow down in that market where you need to focus your attention so the best way to do this is to use the service called listsource.com and what you want to do once you get there is set up a free account up at the very top and once you set up your free account you're going to go ahead and log into your account and I'm going to show you exactly how to find the how to zip codes in your local area to focus your attention on now once you're logged into your account what you want to do is go to where it says create your own and once you go to create your own You're simply going to enter some information in order to be able to find the hottest ZIP codes in your local area I'm going to go ahead to the drop down I'm going to go to where it says City and once I click on City I got to go to state of North Carolina and then I want to go to Greensboro and I'm going to go ahead and add that now once I click on Greensboro I can see that there's a 95 123 properties in the area I'm going to go ahead and click on property once I click on property I'm going to go to the drop down menu and I'm looking for equity percentage to be at least 91 to 100 equity in the property and then once I do that I'm going to last market sell date and I'm going to do let's say the last three months and the reason why I want to search for these is again I'm wholesaling I'm looking at wholesale real estate I want to find where the cash buyers are in my local area and where the activity is taking place with these cash buyers so this is is just a little bit of research that I'm doing in order to be able to find these cash buyers where they're located and then be able to find properties in those same locations that I know will sell eventually to these cash buyers so what I'm going to do is go ahead and click on add to add the last three months into that box there then I'm gonna go all the way over to where it says options and I'm going to select absentee owner the reason why I'm selecting absentee owner is because nine times out of ten a cash buyer is not going to live in their property if they're an investor an absentee owner doesn't live in their properties they're absent from the property they're absentee owned all right so we're going to focus on in-state and out of state and again this is within the last three months with high Equity meaning they paid cash or close to it so what I'm going to do is scroll down to where it says purchase list and what we're going to do is go to where it says which is partial list and I'm going to show you how to get this information for free so you can see that there's 98 leads available generally I'd like to see more than that but for the purposes of this video you know 98 leads is fine I'm going to go to where it says custom selection I'm going to go to the drop down and then I'm going to go to where it says zip code and now I have all the information I need to know where the activity is taking place in my local area I can export this for free in order to be able to download it onto my computer or I can take this information right here because I know where the activity is taking place so you can see 27401 there was 11 sales 27406 there were 19 sales and it seems like this is the hot ZIP code right here 27407 there were 16 sales 27455 there were 15 sales so all I want to do is take the top five zip codes let's say and I want to jot those zip codes down in order to be able to start contacting property owners in these particular zip codes so that's how you go about narrowing down your market right within your local city in order to start finding the types of sellers that you're going to be focusing on in order to be able to find wholesale deals alright so now that you know exactly where the activity is taking place in your local area the next thing you have to do is go out and find motivated sellers now again we talked about what motivated sellers were in the beginning of this particular video but just to remind you of what a motivated seller is it's somebody that's going through some form of distress this can be an absentee owner a person that owns a vacant property somebody that has has backed up taxes on their property maybe they inherited the property they don't want maybe the property needs too much work and they don't have the money to fix it up there's a multitude of problems that somebody has and what you want to do is find the people with these problems and help them out of their situation so in order to do that I use a service called investor Deal Pro I'm going to go ahead and log into my account and show you how we use artificial intelligence in order to be able to sort the leads that we need off of this particular software let's go ahead and log into my account now as you can see we're logged into the back office of my account the first thing I'm going to do is go over to where it says lead pipes and under lead pipes there's a tab that says property leads I'm going to go ahead and click on that and once I click on that it's asking me where I want to search for property so I can go back to that list and pull the zip codes where I want to focus my attention I'm going to pull the top five zip codes now you can see that there's 41 220 properties is available without implementing any other criteria okay so I'm going to go ahead I'm going to leave bed and bats alone for now I'm gonna go ahead and leave square footage alone I'm going to go over to where it says AI scores and I'm going to go ahead down to the drop down and I'm looking for the wholesale score I like for my minimum wholesale score to be relatively High it says upwards of 999 so let's pick let's say 700 to the Max and let's see what that number drops down to so you can see just by using artificial intelligence that number dropped down to 1103 now another thing I'm going to do is go over to where it says all lead types and I'm just going to select absentee owners another thing I can personally do with my account is I can select multiple types of motivation so for example maybe free and clear Maybe vacancy maybe pre-foreclosure or something like that I'm just going to select vacancy free and clear absentee owners the free and clear properties makes for good seller finance deals as well but that's not the scope of this particular video now just for full disclosure I am the owner of investor Deal Pro and this is a service that I provide if you'd like to take advantage of it you can go ahead and check the link in the description box below now in addition to that what I'm also going to do is go over to where it says single plus five and I'm going to deselect condo townhome an apartment and other I'm just going to focus on single family and multi-family properties and the reason why I'm focusing on these is because these are the types of properties that sell in my area so you need to find out what sells in your area as well you can see there's only 48 leads available now that's a relatively small list which is perfectly fine with me and the reason why I'm fine with it is because the artificial intelligence that all the work that I needed in order to be able to find the most motivated seller leads out of this particular list so I'm going to go ahead and take all 48 leads I'm going to go ahead and select all 48 and you can see that they all popped up under my leads now what I can do is go ahead and download the entire list or I can skip Trace them right here I'm personally going to go ahead and Skip Trace them and once I skip Trace them the next step is to go ahead and contact the property owners there's only 48 of them so let's go ahead and let me show you how to do that now in order to go ahead and contact these Property Owners there's three methods that I personally like to use and I use them interchangeably I use direct mail I use cold calling and also use text messaging Whenever I send out direct mail or we make an initial cold call we always follow up with a text message you want to remember that the money is always in the follow-up so a small percentage of the people that you contact on the initial contact will actually want to sell their property but you want to remember that this is a follow-up game majority of your deals are going to come from the people you follow up with the most so an example of how we use Direct Mail in order to be able to contact people we'll send them let's say a yellow letter or a postcard and what works best for us are hand written yellow letters or handwritten postcards then what we do is we go ahead and follow up with a text message once we know that the mail have actually hit their mailbox and we say something like hey we just sent you a letter in the mail it should be in your mailbox when you get it can you please give me a call so a spark some type of curiosity and the seller will more than likely want to give you a call back to see who you are and what you're calling for but in order to come up with these messages you can use what's called chat GPT this is a new AI software it's been around for a little bit now and a lot of people are starting to adapt their real estate business to using this particular service is completely free the way we've been using chat GPT is to write our direct mail and text messaging for us so let me give you an example of how that actually works so here on chat gbt it says send the message all I'm going to do is tell chat GPT to please write a convincing yet compassionate letter to a vacant property owner expressing our interest in purchasing their property I'm just going to go ahead and click on send message and you can see chat GPT will literally go ahead and write the letter for you and once the letter is done all you got to do is copy this letter send it over to whatever mail house you're going to use in order to be able to get it done or hand write these letters yourself and go ahead and take it from there and to take it a step further another thing that I personally like to do is simplify the letter to a fourth grade reading level so in order to simplify the letter all I'm going to do is tell chat GPT to write this same letter on a fourth grade reading level and I'm just going to go ahead and click on search again and you'll see that chat GPT will simplify the letter to a fourth grade reading level for me you can see it's a little shorter than what it was before I'm going to go ahead and copy this and then I want to verify that this is out of fourth grade reading level in order to do that there's a service called mymathables.com and I'll leave this link in the description box for you as well I'm going to go ahead and click on the link and paste the message in there and then calculate what the reading level is for this so you can see this is at a fifth grade reading level not too far off of where I wanted to be but you can keep going back to chat GPT to simplify the letter further and then once it hits the fourth grade reading level then you know that your letter should be good to go now obviously you want to review the letter you want to keep putting your own twist into it your own personality but at the end of the day chat GPT and this my math tables readability website will do the hard work for you so now that you have your letter all you want to do is get this letter sent out to all 48 people on that list if your list is larger if it's smaller it's perfectly fine the object is to contact these people as quickly as possible and I'll leave a link in the description box to a service that we personally use to handle all of our mailing pieces all you have to do is tell them that you like to use the mailing campaign at Jamel Gibbs uses and they'll get you all set up and they'll tell you exactly what they need all right so now that you know exactly how to contact these Property Owners again keeping in mind that there is a lot of different ways to do it I just showed you one way using modern day technology the next thing you're going to have to do is screen the seller calls that come in now when you're screening the seller calls you want to make it more of a conversation versus an interrogation you don't want to be interrogating a seller you want to build rapport with the seller so the best way to build rapport is to ask open-ended questions and listen to what the seller is telling you the more the seller talks the more information you gain the more you get a chance to see how you can help them and create a situation that can be beneficial for the both of you in the transaction that you're trying to create when you're talking to the seller there's really three maybe four four things that you really need to get from the seller in order to be able to know if you have yourself a potential deal or not the first thing you're going to need to know is the seller's asking price for the property and what's the least amount that they'll take for the property the next thing you need to know is how much work the property needs and then finally you're going to need to know how quickly they're looking to get rid of this profit now obviously there's going to be a lot more questions in order to be able to lead up to this particular information and have a complete detailed video that you can watch right on my YouTube channel that I'll go ahead and link up at the top for you be sure to watch that video after watching this to understand how to talk to a seller to get the information that you need from the seller now once you have the information that you need from the seller the next thing you're going to want to do is set up an appointment to go out and see the property and while you're at the property you're going to be doing a couple things you're going to be looking for problem areas that the property has you're going to be taking pictures of the property you just want to get a general idea of the condition that the property is in so now that you've actually seen the property what I want you to do is go ahead and use the following numbers that I'm going to share with you right now in order to be able to come up with an idea of how much work the property needs and we're going to use What's called the square footage approach what I personally do is take the square footage of the property and I'll multiply it by a certain amount per square foot in order to be able to come up with an idea of how much work a property can potentially need so let's just say for example the fictitious property that we're using as an example is about a thousand square feet what I'm going to do is go ahead and rate the property from a one to a five one being the worst five being the best so let's just say that this particular property was a four or five I'm probably going to give it a 15 to 20 dollar per square foot estimate when I run my numbers if it was a two or three I'm probably going to give it somewhere between 25 and 30 dollars per square for it when I'm running my numbers and if it was a one probably thirty five dollars or more based on how much work the property actually needs now the object here is not to get the property to become the Taj Mahal that's not what we're looking for we're just coming up with an estimate to get this property in livable shape and be able to sell it off to somebody else now obviously these numbers can fluctuate from Market to Market but that's the square footage approach that we use and if you want more information on how that actually works be sure to check the link in the tags up at the top as well alright so now once you have a rough idea of how much work the property needs the next thing you're going to do is go ahead and formulate an offer to be able to present to the seller now again what you're looking to do is create a situation where you can help the seller out of their current circumstances while getting this property at a fair enough price to be able to make a profit you're going to be paid for your time so you need to be able to get this property at a disk and the best way to do this is to use a formula that I've personally been using over 20 years myself and it's the Mayo formula and basically that Mayo formula allows you to purchase properties at a discount while still being able to provide a fair price to be able to help the seller out now the first thing you're going to need to do in order to be able to formulate an offer for the seller is find comparable houses nearby in order to be able to formulate an offer and you can use the investor deal pro software that we went through earlier in order to be able to do that let me show you exactly how that works so let's just say for example we're looking to run comps on a potential property I'm going to paste the address into the search bar and then I'm going to go ahead and search for the address now as you can see the wholesale score is relatively high on this one what we're going to do is click on comparable sales and we're going to allow the software to do all of the research for us and all I want to do is find like and kind properties within a quarter of a mile radius that sold within the last few months so if I'm looking at the property you can see 306 Milton Drive is one comp we can see 1801 dunleith way is another one we can see 1715 is another one and we can see two more what we're looking for are at least three to five comps that we can average out to be able to get a price for this particular property you can see the software automatically averages the sales price out to 268 000. but let's look at when these properties were actually sold we could see one just sold a couple of months ago on March 10th another one sold a couple of weeks ago this one sold a couple weeks ago all these are relatively new cells we got May 31st we got May 24th we got March 10th we got February and then we got May again so these are all good solid comps that we can use and it gives us an average price of 268 800 on this particular property so now that we have an average price of what this property can be potentially worth what we're going to do is formulate an offer to be able to present to the seller and what we're going to do is we're going to type in arv of 268 thousand dollars and we're going to say that this property doesn't need a lot of repair we're just going to say it's a thousand square feet these aren't accurate numbers obviously but I'm just giving you a general idea of how this actually works but let's just say that the property is a thousand square feet and it needs a moderate amount of work we're going to use 25 per square foot for the purposes of this particular video so that would mean that the property needs about twenty five thousand dollars in work and again if you want a more detailed explanation of how this actually works there's a link up in the tags for you to be able to watch another video and what we're going to do is take 268 000 we're going to multiply that number by 0.70 using the Mayo formula and we're going to subtract 25 000 in repairs off of that and that's going to leave us with the top price that we can actually pay of 163 160 dollars now in addition to that we also have to subtract our wholesale fee now the average wholesale fee is right around ten thousand dollars so let's just say that we subtract ten thousand dollars on this and that's going to leave us at an offer price of a hundred and fifty three thousand one hundred and sixty dollars and that would be the offer that you present to the seller now another thing that I want you to keep in mind is we're going to set realistic expectations you're not going to get the first offer that you put out to a motivated seller usually it takes about 20 to 25 of these offers before you get an accepted agreement from a seller so let's set realistic expectations up front it takes a lot of work to be able to do this you're gonna have to talk to enough people and if you don't get a deal within let's say the first few weeks look at your numbers see how many offers you've made and keep pushing until you actually hit that number or even serve past that number in order to be able to see where you need to make adjustments but don't judge your results until you've actually made at least 20 to 25 of these offers because this is a numbers game so at this point you understand exactly how to go out and find your Market you know how to contact the sellers you know how to screen the sellers you know how to view the properties you know how to see how much work the property needs and you also know how to make an offer on a property once you get an offer accepted the next thing you're gonna have to do is send the seller an agreement now I'm not going to go into all of the details of the agreement but you can use a simple standard purchase and sell agreement in order to be able to get the deal done the only thing you want to add on to the agreement is and or assigns after your name so for example if we're using one two three main street real estate LLC we're going to add add and or assigns in back of the name in order to be able to make the contract assignable now if you'd like to get a copy of the agreement that we personally use be sure to check the link in the description box you're going to have to enter your email so that we can send you the agreement but you'll have access to the agreements that we use in my business now another thing that you want to keep in mind is we use a service called DocuSign in order to be able to get all of our contracts signed by the seller so when you're talking with the seller at the property and you decide to present an offer to the seller make sure you get the seller's email address and obviously you want to make sure you contact them through phone before sending the agreement over to them to verify that they actually received the agreement so we use DocuSign in order to be able to do that and I've actually put together a separate training on how to use DocuSign to get your agreement signed and I'll link up at the top for you as well alright so check it out once you have assigned agreement from a motivated seller the next thing you're going to have to do is go out and find a buyer in order to be able to sell your contract to now you're not selling the house because you need a license to be able to sell the house but you can sell your Equitable interest in your contract over to a buyer now the best place to find buyers from my experiences over 20 years of doing this has been through Craigslist and Facebook Marketplace let me share with you an example of how we use Craigslist in order to be able to do this and you can take the same concept and use Facebook Marketplace in order to be able to find cash buyers as well check it out all right so what I want to do is show you some of the ads that we use on Craigslist now the first thing I recommend you do is have a Craigslist account it's free and it will help you keep track of all of your ads that you post on Craigslist in order to be able to renew them or reuse them if you need to in the future so another thing I want you to keep in mind is when you're selling these properties you're only able to sell to one person so everybody that contacts you make sure you get their name their email address and their phone number as well so that you can build up your buyers list and this way when you find more deals what you can do is email those deals out to your buyers and you can be able to sell these properties a lot quicker but what I'm going to do in this video is just show you two examples of the ads that we place on Craigslist and again you can use these ads on Facebook Marketplace as well in fact we also use these same exact ads when we send the emails to our buyers list in order to be able to get our property so so what I'm going to do is go ahead and log into my Craigslist account and after I log into the account I'm just going to pull up two simple ads that we use so that you can get an idea of how to word these properties in order to get them to sell let's go ahead and pull up the first ad all right so here's an example of the first ad now this is a property we had a little while ago here in North Carolina it was a fixer-upper sell investor special you can see the title right there but all it does is provide the property description which was a single family with a lot of potential needs work property specifications was a two bedroom one bath electric heating it was built in 1940 again we reiterated that it needs work the cash price was thirty six thousand five hundred dollars we were asking for serious buyers only and inquire about this property by replying to this ad so what we did was provide some basic information on a property nothing too special and we provided them with a call to action if you want to know about this property let us know you know the price you know what the property details are contact us if you're serious and that's basically how this ad was written and this property sold within two weeks let me give you an example of another one all right now here's an example of a package deal that we sold here in North Carolina this particular ad says great combo package in Thomasville North Carolina it says great package deal must be sold together so we set the standards right up front it says property details vacant three bedroom one bath 1156 square feet location on June Street in Thomasville it was a cash deal forty two thousand five hundred dollars repairs buyers to do their own due diligence so we didn't actually tell the buyer how much repairs this property needed they needed to do their own research and make us an offer it says notice we are assigning our rights in our agreement to the highest bidder for a profit so we're letting them know right up front that we're assigning our contract in this one serious inquiries only please says great package deal must be sold together second property details we provided the details of the second property second property was going for forty thousand dollars together it was a 82 500 deal we basically told them how to contact us to view the property we gave them a little bit of motivation don't sleep our deals move pretty quickly so make your offer ASAP if you're interested get professional advice and conduct due diligence prior to investing so again we're protecting ourselves with this disclosure again notice we are assigning our rights in our contract to the highest bidder for a profit so this is just an example of another ad that we place all of our ads look relatively similar sometimes we'll tell a story sometimes we don't a lot of times it's just a detailed ad providing the bullet points that people need to know in order to be able to make an offer on the property so that's how we use Craigslist again we do the same exact thing on Facebook Marketplace we send the same exact ad we'll literally copy this ad and paste it into our email in order to blast to our buyers list this works really well for us obviously you want to create your own style you want to make sure that you're adding your own flavor into this but you want to provide the buyers with the details that they need in order to be able to make an informed decision on a property if they're interested in it another thing that we do is we take pictures of properties and we'll upload them onto Google Drive and simply send them the link to the Google Drive so that they can view the pictures and videos on there all right y'all so we're coming down the stretch at this point once you find a cash buyer your next objective is to go ahead and assign your contract to the cash buyer again if you want a copy of my assignment of agreement of sale be sure to check the link in the description box for that assignment the contract is a one-page agreement pretty self-explanatory it is an addendum which you attach to the initial contract so you'll have to give your buyer a copy of the initial contract as well and they will see how much you're actually paying for or the property but it doesn't matter because if they want to do long-term business with you then they won't mind you making an extra 10 or 20 000 in order to be able to provide them with a decent deal and that's when it comes to assigning agreements if you're going to have to do a double close on these contracts there's transaction funders out there who will fund the entire deal for you provided you have an end buyer to show that they can actually get their money back I'll go ahead and Link in the description box again a transaction funder that you can use in order to be able to get your deals done you know explain what their criteria is most transaction Partners will charge you about eight hundred to a thousand dollars in order to be able to get it done but if you think about it in the grand scheme of things it'll cost you a thousand dollars plus a little bit of closing costs to be able to get an extra seven to eight thousand dollars in profit basically all you're going to do is wholesale your kind contract over to your and buyer if you're assigning a contract or you're going to use what's called transaction funding in order to be able to double close on a deal if you need to close the transaction once you get your assignment of agreement signed all you need to do is contact the closing attorney that your buyer wants to use or that you were using in the first place and monitor the deal all the way through closing if you're doing a double close type of deal and not an assignment of contract what we typically do is we'll have a fresh purchase and sale agreement signed by our buyer and us and we'll sell it to them as if we're the owners of the property because technically when they purchase it from us we will be the owners if we're using transaction funding so that's how we close our wholesale deals again monitor the deal all the way through cash your check put it into your bank account that you set up in the very beginning and then rinse and repeat this over and over again again as much as you want this can absolutely change your life this is a business that you don't need a lot of money with you don't need any credit you'll never take ownership of the property if you choose not to and if you do it'll be for a day or so you don't have to worry about tenants and toilets and all this other stuff and I do think that this needs to be part of your investing Arsenal to continue having cash coming into your business as well as allowing you to be able to build your money up to be able to take that money and build up passive cash flow through rental real estate so I hope that you benefited from this particular video I try my best to provide you with a step-by-step process in the shortest amount of time that you can Implement in order to be able to start wholesaling real estate today remember this is a numbers game don't look at it as a get rich quick scheme understand that you have to make 20 to 25 offers in order to be able to get a deal and the more 20 to 25 offers you make the more deals you'll get at an average of ten thousand dollars per deal you do 10 of these a year you're making an extra six figures every single year be sure to like this video subscribe to this channel click the notification Bell I hope you benefited from this video check all the links in the description box that you can use in order to be able to assist you in your endeavors as far as wholesaling real estate and I'll see you on the next one

Channel: Jamel Gibbs

Views: 84,669

Keywords: How to start wholesaling, how to start wholesaling real estate, how to get started wholesaling real estate, how to wholesale real estate, how to start wholesaling houses, how to wholesale real estate step by step, how to wholesale houses, how to wholesale real estate with no money, wholesale real estate, how to wholesale real estate for beginners, how to wholesale real estate free training, wholesaling real estate step by step, jamel gibbs, wholesaling real estate, wholesaling

Id: Pwnnh5HuC0c

Length: 56min 51sec (3411 seconds)

Published: Fri Jun 30 2023