Wholesaling Properties Other Books by Aram Shah
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The Art of Wholesaling Properties Other Books by Aram Shah REO BOOM: How to Manage, List, and Cash in on Bank-Owned Properties 100% Commission Brokerage and Death of the Big Box Realty The Art of Wholesaling Properties How to Buy and Sell Real Estate without Cash or Credit Aram Shah and Alex Virelles Contents Foreword by Robert Shemin xiii Preface: The Three Building Blocks to Wealth in Trading Real Estate Paper xv 1. The Wholesaler’s Mind-set 1 Why the Perfect Time to Start Wholesaling Is Now 3 An Appreciating Market Works for You 4 Cash Buyers Are Looking for Deals 4 Points to Remember 6 2. What Is Property Wholesaling? 7 Securing Hard-Money Funds and Transactional Funding 8 A–B and B–C Transaction Defined 9 Points to Remember 11 3. Getting Started: Finding Cash Buyers 12 Why You Must Find Your Buyer Before Finding Your Property 13 How to Build a Strong Cash-Buyers List 13 The #1 Way to Get Cash Buyers: Bandit Signs 14 Additional Methods for Building Your Cash-Buyers List 17 Use the MLS to Check Cash Buyers’ Stats 18 Points to Remember 21 4. Finding the Juicy Deals 22 Secrets to Finding Distressed Sellers 23 Criteria You Need to Give Your Real Estate Agent 24 Starting Your Search 28 Find Off-Market (Non-MLS) Deals 30 How to Work Direct Mail and Drip Campaigns 35 The Art of Speaking with FSBO Sellers 37 Dialing for Dollars and the Magic 50 Percent Formula 38 Sellers Lead Sheet 39 Handling the Two Most Common Objections from FSBOs 40 Points to Remember 41 5. The Art of Making a Winning Offer 43 Choosing the Perfect Comps 44 Seeing the Property for the First Time 48 Using the MAO Formula to Make an Offer 52 Filling Out the Contract 54 Your Initial Meeting with the Seller 59 Using the 20-20 Rule to Lock Up Properties 61 Points to Remember 63 6. Marketing Magic: How to Secure an End Buyer Once You Find a Deal 64 Property Marketing Secrets 65 Scripts for End Cash Buyers 68 Avoiding Pitfalls with Tenants 70 Points to Remember 71 7. Closing the Deal: Double-Closing Versus Assigning 72 Is Your Cash Buyer for Real? 73 Follow the Money 73 The $10,000 Question 75 Using A–B Transactional Funding 76 Maneuvering the B–C Transaction for Double-Closing 77 Receiving Deposits from the End Buyer 77 Points to Remember 85 8. Foolproof Exit Strategies to Get Out of a Deal 86 Use Inspection Periods to Back Out or Renegotiate 87 The Art of the “Subject to” Clause 89 Use Liens and Violations to Exit or Get Discounts 89 Can’t Exit? Get Creative 90 Points to Remember 92 9. The Seven Biggest Pitfalls When Wholesaling Properties 93 1. Skipping the Inspection 94 2. Not Using Your Title Company or Attorney for the Deal 96 3. Marketing Properties That Are Not Yours 98 4. Not Using a Joint-Venture Agreement with Other Wholesalers 100 5. Not Staying on Top of Cash-Burning Deadlines 101 6. Marketing Before the Contract Is Executed 104 7. Burning Bridges 105 Points to Remember 107 10. Putting the Wholesaling Business on Autopilot 108 Understand Your True Net Worth 109 How to Pick Your Dream Team and Pay Them Right 109 Maximize the Three Ways to Make Money in Wholesaling 112 Leverage Your Way to a Fortune 113 Points to Remember 116 Epilogue 117 Appendix K—HUD-1 Settlement Statement 120 Appendix L—Your Wholesaling Resources 123 Appendix M—Cash Buyer Question List 129 Appendix N—Motivated Seller Question List 131 Appendix O—Offer Packet 133 Appendix P—Assignment Agreement 145 Appendix Q—Joint-Venture Agreement 151 Appendix R—Sample Marketing Blast 153 Appendix S—Memorandum of Interest in Real Property 156 Index 158 About the Authors 165 Foreword When I was twenty-eight years old, I had no money and no credit, and that’s when I got started in real estate. I did real estate backward and the hard way. Like many others, I thought that the only way to make money in real estate was to borrow money, buy property, fix property, and fight with tenants. Although it worked and I made decent money, it was an uphill battle. After five difficult years of being a landlord, I started using some of the techniques in this book. The first year that I practiced what I’d learned about flipping and wholesaling, I handled more than fifty properties and made well over half a million dollars—with little risk and without using my own money or credit. Wholesaling is awesome. There are a lot of great real estate books out there, but this is definitely one of the best. If you are ready to learn from real experts, read on. Aram and Alex will take you step by step and show you how they’re making a fortune in real estate every day. All you have to do is keep reading, learn from the best, and follow in their footsteps. Make sure to pay special attention to all the techniques—and especially the “insider’s tips,” which will help you make, and save, a ton of money. You’ll learn strategies that can work in any market, with low-end properties, middle-end properties, and high-end properties. With the formula for success contained in this book, you’ll be able to build your own sustainable business. xiii If you think it can’t happen to you, think again. Okay, maybe your first windfall won’t be as large, but it would still be realistic to think you could make, say, $9,000 or $14,000 cash on your first deal. I have many students who see that kind of check monthly, even two or three times a month. This business is all about your mind-set. External forces in society try to impose limits on what and how we can think, or what we should and should not do and say. The minute you realize that the world is open, that there are no ceilings on what you want to accomplish, and that you won’t allow anyone to come between you and your goal— then you can achieve what you envision. The 2006 documentary The Secret summarizes exactly what the rich and powerful figured out a long time ago: bend your mind and thoughts around an idea, focus hard on it, and envision it every single day, and the entire universe will follow your mind and will. It might sound somewhat bizarre and antilogical, but nevertheless, I can tell you that it works. It worked for me countless times, and I will show you exactly how it can work for you. xix There is a reason you are reading this book today. You deserve greatness and success. I learned very early on that success is a mind- set. No matter where you are in your real estate career—whether you are brand new or own your own home, or whether you’re just sick and tired of your job and you want to make some cash on the side (and hopefully never go back to work again)—stay tuned. You’re about to witness some hard-core, serious money-generating secrets. Let’s get started. No ceilings! Aram Shah @Shah of Miami (Twitter/Instagram) xx 2 What Is Property Wholesaling? Property wholesaling is simply a way to buy and sell real estate without actually owning it. Right now, imagine making tons of money with no credit and little to no income. It’s too good to be true, you’re probably thinking. Actually, it’s not. In fact, many millionaires have kick-started their financial independence using this very method. Industry leaders charge thousands of dollars to learn this technique. And because there is room at the top for everyone, I’m sharing this invaluable information with you. By the time you finish this book, you should be able to do your first deal with confidence. You’ll be well on your way to making a ton of money in this exciting business. I want you to succeed. You may be aware that what some of the seminar gurus out there provide is a ton of motivational fluff and fakery that give you a false sense of confidence, and then they tease you into buying “further education” at a ridiculous price. What you’ll be coming away with after reading this book, though, is real knowledge. And knowledge is power. Once you know what you’re doing, the confidence will come. Now, let’s get to it. What exactly is property wholesaling? You may have heard the terms real estate day trading, assigning contracts, double-closing, or flipping contracts. These are all terms for essentially 7 ARAM SHAH AND ALEX VIRELLES the same thing. Wholesaling a property entails buying it without actually owning it or holding title; selling or flipping it to a cash buyer while you have it under contract; and making a profit. (Note: I said cash buyer. This is critical.) The idea is to get the property under contract at a discounted price and then resell it at a price that is still attractive to the investor or end buyer. It’s called wholesaling because you get the property at a wholesale price. You start off by building a solid cash-buyers list. Once you have a decent number of serious cash buyers who are looking for property in your target area, you start hunting for deals. When you find a deal, you get the property under contract, and then you can either sell the contract for a fee (assignment) or do a double or simultaneous closing.