Wholesaling Real Estate – An awesome question from a reader…
Posted by admin under: Main Nov 21Hello all!
Thanksgiving is just around the corner and I’m getting excited. I love the holidays… there’s just something about how the holidays make you feel that I can’t get enough of.
Anyhow, this morning we got a great question from a reader about wholesaling real estate. Just like I was when I was first looking for real estate investing information… this reader is frustrated and confused with the whole process.
I could tell this reader needed a little push… so I sat down this morning and typed up a response (way longer than I initially intended).
If you are at all looking at wholesaling real estate or just getting going in real estate investing, you’re going to want to read this post.
Enjoy!
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The Reader’s Wholesaling Real Estate Question:
“hi my name is latasha i’m a new real estate investor and every time i think i’m on the right path way i have to go back and re look thinks. i need to know what is arv and how does it play roll in making the numbers work i viewed your formula and i still don’t get it alot of people do give the formula with out an example; say for example u have a property worth 100.000 and the ho owe 50.000 and the have 7,500 unpaid mortgage, 4,000 paint in and out, 2,000 update kitchen, update bth 2,500, closing cost 3,000, reh 13,000, my fee 10,000=8,000
how do we know how much to sell to the reh and to buy from the h.o.? and how do u determine the market value of the property? do u go by what there asking for? i’m working on a deal and it’s a reo and there asking for 69,000 how do u determine the market value.
thank u i hopefully you’ll be able to help”
Our Response: (to the real estate wholesale formula post she read)
Hi Latasha,
Excellent question.
Let me try to clear it up a little for you.
I’ll start from the basics and work my way up to give you a full picture. Some of it might be review, but… hey… a little review never hurts.
Okay… first off, you are not the only one who gets derailed from the path to success every now and then.
I have been derailed many times… but it is all in your mindset and how you choose to blast through the wall and get back on track. For me, what gets me back on track every time is to go back to the basics and remember just how simple real estate investing is when you look at the basics.
So, here are the basics that you need to remind your self of when investing in real estate and wholesaling.
Wholesaling real estate is the simple act of buying a property low, selling it at more than you bought it (or put under contract for).
I know, that is obvious. But, let’s now break it down a bit further.
Start with buying a property low:
To buy a property low you must find a homeowner who for some reason is willing to sell it to you for less than what it’s worth. There are many reasons people sell assets for less than what they’re worth.
- Bad tenants
- Divorce
- Rundown property
- Inherited the property
- Foreclosure
- Not to foreclosure, but can’t make the payments
- Death in the family
- etc.
The catch here is that you must first know about what it is worth before you can tell if you are buying low.
Source: Wholesaling Real Estate – An awesome question from a reader…
Wednesday, November 21st, 2007 at 3:41 am and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.