Real Estate Wholesaling Bible

THAN MERRILL (San Diego, CA; www.fortunebuilders.com) is the founder and president of FortuneBuilders.com, the largest and most successful real estate educational and coaching company in the country. FortuneBuilders has been featured in Inc. magazine’s “Inc. 500 List” as one of the fastest growing private companies three years in a row. Than has also been featured in 20+ episodes of A&E’s hit TV show Flip This House. In the past decade he has done close to 1,000 real estate deals, everything from single-family, to multifamily, to commercial properties.

• Introduction 1The Shrinking Middle Class in America 1How I Got Started Investing in Real Estate 3Why We Decided to Start Wholesaling 4Set Skepticism Aside—It Will Hold You Back 5Is This Book for You? 6The Catalyst to a Better Life 71 Wholesaling Overview: What’s in It for You? 9The Benefits of Learning How to Wholesale Real Estate 9Conclusion 132 Getting to Know Your Local Real Estate Market 15The Importance of Gaining Intimate Local Market Knowledge 15Step 1: Gain an Understanding of Local Market Metrics 16Step 2: Get to Know Price Points of Properties by Neighborhood 17Step 3: Understand Zoning Laws within the Market 18Step 4: Study Your Competition 19Step 5: Identify Key Real Estate Professionals in the Market 19Set Your Focus 20Conclusion 203 Establishing Your Marketing Presence 21Foundational Marketing Materials 21Business Cards 22Seller Credibility Packet 22Buyer Credibility Packet 23Private Money Credibility Packet 23Core Website 24Facebook Page for Your Business 25Easy-to-Remember Phone Number 25Memorable Business Name 26Logo and Business Color Schemes 26Conclusion 264 Understanding the Pre-Foreclosure Process 27Definition of Foreclosure and How to Learn Your State’s Process 27Types of Foreclosure 28Buying Properties from People in Foreclosure 32Conclusion 335 Finding Pre-Foreclosure Properties 37Finding Recent Pre-foreclosure Property Filings 37Conclusion 406 Finding Wholesale Deals Utilizing Direct Mail Campaigns 41Step 1: Find the Best List 42Step 2: Decide How Many Times You Will Mail the Prospect 44Step 3: Create a Spreadsheet to Track Your Mailings 44Step 4: Determine What Types of Direct Mail Pieces You Will Use 45Step 5: Craft a Compelling Message 46Step 6: Choose Postage 48Step 7: Set Up Your Inbound System 49Step 8: Fulfill Your Campaigns 49Step 9: Note Response Rates 50Conclusion 507 Finding Deals on the Multiple Listing Service 53The MLS Offer System 53Outsource Steps within the System 56Conclusion 578 Finding Deals Utilizing Craigslist 59Searching for Properties under the “Real Estate for Sale” Section 59Searching for Properties by Keyword 60Contacting Landlords Who Are Renting Properties 60Contacting People Having Estate Sales 61Creating Advertisements that Get People to Contact You 61Creating a Compelling Ad Title/Headline 61Using Symbols to Make Your Title/Headline Stand Out 62What the Body of Your Advertisement Should Communicate 62Conclusion 649 Other Killer Ways to Find Profitable Real Estate Deals 65Purchasing Internet Leads 65Questions to Ask about Purchasing Internet Leads 66Facebook 67Facebook Ads 67Other Real Estate Professionals and Investors 68Door Hangers 69Bus Bench Advertising 69Banners 69Vehicle Wraps 70Car Magnets 70Billboards 71Television Advertising 72Conclusion 7210 Overview of How to Value Real Estate 73The Cost Approach 73The Income Approach 74The Sales Comparison Approach 74A Word of Caution 75Always Determine the Highest and Best Use of the Property 75Your Goal as a Wholesaler When Making Offers 76Conclusion 7611 Deal Evaluation System Stage 1: Gathering Information 77Vital Information to Gather in Stage 1 78Recommended Tools to Gather and Track Information 82Conclusion 8412 Deal Evaluation System Stage 2: The Desktop Evaluation 85Step 1: Confirm the Property Details by Reviewing the Property Card 85Step 2: Pull the Listing Sheet If the Property Is Listed with an Agent 86Step 3: Understand What You Are Trying to Determine with the Sales Comparison Approach 87Step 4: Find the Best Comparables Using the Multiple Listing Service 87Step 5: Look for Off-Market Comparables 89Step 6: Analyze the Sold Comparables to Determine Whether the Property Is Worth Visiting 90Step 7: Classify Your Leads 90Step 8: Prepare Your Comparable Package 91Step 9: Prepare Your Buying Appointment Package 92Conclusion 9313 Deal Evaluation System Stage 3: The Property Visit 95Filling Out the Comparable Sales Adjustment Grid 96Performing Drive-by Inspections of the Subject Property and Comparables 96Examining Comparables that Are Active and on Deposit 98Making Adjustments 99Calculating Adjustments 103Conclusion 10314 Estimating Repairs on Properties 105Repair Cost Is a Critical Number You Need to Make the Right Offer 106Our System to Estimate Repairs 106Exterior Repairs 107Interior Repairs 111Mechanicals 116Other 117Things That Can Greatly Enhance the Value of a Property 119Conclusion 12215 Negotiating and Making Offers to Sellers 123Negotiate with Confidence 124Step 1: Uncover the Seller’s True Needs and Desires 124Step 2: Research the Seller or Agent You’re Negotiating With 125Step 3: Know What You Are Offering before Meeting with the Seller 126Step 4: Walk through the Property 126Step 5: Build Rapport and Dive Deeper into the Seller’s Motivating Factors 127Step 6: Explain How You Can Help the Seller 129Step 7: Frame Your Offer 130Step 8: Handle Objections Effectively 130Step 9: Sign the Purchase and Sale Agreement 132Conclusion 13216 Understanding Purchase and Sale Agreements 133Parties Involved 133Description of Real Estate 134Personal Property Included in the Sale Price 134Purchase Price and Financing 135Where Deposits Are Held 135Financing Contingency 135Condition of Premises 136Inspection Contingencies 136Statement Regarding Lead-Based Paint 136Occupancy, Possession, and Closing Date 136Deed Type 137Marketable Title 137Adjustments 137Buyer’s Default Clause 137Seller’s Default Clause 137Risk of Loss and Damage 137Addendums 138Broker/Agent Fees 138Time to Accept 138Conclusion 13817 How to Get the Money for Your Wholesale Deals 139Conclusion 14018 Working with Private Lenders 141What Exactly Is “Private Money”? 142How Is the Lender Protected? 142Turning People into Private Money Lenders 143Finding Existing Private Money Lenders 143Can You Openly Advertise for Private Money Lenders? 144Meeting with the Lender for the First Time 144Conclusion 14519 Working with Transactional Lenders and Hard-Money Lenders 147What Is Transactional Funding? 148Hard-Money Lending 149When You Will Use a Hard-Money Lender in Wholesaling 149Know the Terms 150Qualifying for a Hard-Money Loan 150Locating Hard-Money and Transactional Lenders 151Conclusion 15220 Building a Trophy Database of Buyers 153How You Can Leverage a Database 154You Must Have Software to Build a Trophy Database 155Conclusion 15521 Networking to Find Buyers 159Strategic Networking Opportunities 159Networking with Other Real Estate Professionals 162How to Build Relationships and Stand Out from the Crowd 165Conclusion 16622 Direct Response Marketing Strategies to Find Buyers 167Craigslist, Backpage, and Other Online-Classified-Ad Websites 168Facebook Real Estate Groups 169Company Website 169Lead-Generation Pages (Squeeze Pages) 170Penny Saver Newspapers 170Reaching Out to Your Competition 170Cash Buyers 171Conclusion 17223 Marketing Your Wholesale Deal 175Make Sure Your Trophy Database Is Organized 175Assemble the Critical Information into a Wholesale Deal Marketing Package 176Call Your Most Serious Buyers First 176E-mail Blasts 177Text Blasting 177Voice Broadcasting 178What If You Have a Deal to Sell but Don’t Have a Buyers’ List? 178Conclusion 17924 Classifying, Prescreening, and Communicating with Buyers 181Classify Buyers within Your Trophy Database 181The Importance of Prescreening Buyers 182What to Do When Buyers Contact You 183What You Need to Know about a Buyer 183Communicating Properly and Training Your Wholesale Buyers 184Conclusion 18525 Working and Negotiating with Buyers 187Know the Comparable Sales in the Area 187Have an Accurate Repair Cost 188Create a Sense of Urgency 189Common Negotiating Techniques Buyers Use 189What if the Buyer Thinks You’re Making Too Much? 190Confirm Funding 190Case Study 191Conclusion 19226 How You Profit: Selling a Contract 193What Does It Mean to “Sell a Contract”? 193Completing the Assignment of Real Estate Purchase and Sale Agreement 194How Do You Get Paid? 195Coordinating the Closing 195Common Questions 196Which Is the Better Exit Strategy: Selling a Contract or Double Closing? 196Common Misconceptions about Wholesaling 197Conclusion 19727 How You Profit: Double Closing 201What Is a Double Closing? 201Signing the First Purchase and Sale Agreement on the A-B Transaction 202Signing the Second Purchase and Sale Agreement on the B-C Transaction 203Know How the Buyer in the B-C Transaction Is Planning on Funding the Deal before You Sign a Second Purchase and Sale Agreement 204What Else to Look for from Your C Buyer 205Don’t Pass Funding Through 206Always Have Legal Counsel 206Conclusion 20728 The Real Estate Closing Process 211Who Handles the Escrow and Closing? 211What Is Required to Open Escrow? 212Who Selects the Escrow Company? 213Are You Opening One Escrow or Two? 213What Happens during Escrow? 213How Do You Prepare for Closing? 214What Can Cause Delays during the Closing Process? 215What to Check the Day before Closing 216What Takes Place at the Closing? 217How to Ensure There Are No Snags the Day of Closing 217Hiring Someone to Help You Process Your Wholesale Deals 217Conclusion 21729 Building Your Local Team 219Real Estate Agents 220Locating the Top Agents in Your Market 221Hard-Money Lenders 222Mortgage Brokers 222Insurance Agents 222Title Agent/Real Estate Attorney 223Contractors 223Conclusion 22430 Building Your Business Advisory Team 225Real Estate Coaches 227Marketing Mentors 227Negotiation and Sales Mentors 227Business Management Mentors 228Legal Mentors 229Tax Mentors 229Mastermind Group 229Conclusion 23031 The Path of Smart Growth 231Preparing for Growth 231Managing Your Time 232Developing Systems 232Growing at a Sustainable Pace 233Integrating Technology into Your Business Management Systems 233Hiring Employees and Scaling Your Business 234Constantly Improving Your Leadership Skills 235Index 237