In my first 5 articles on this series on foreclosure investing, we talked about the ways to find, evaluate, and close foreclosure deals. Now its time to
Show You The Money!
I often tell my students that you make money when you buy, and thats certainly true. But you dont realize the money until you sell or otherwise dispose of the property. Remember that in a previous article I talked about knowing your exit strategy is important when buying properties. Now we are going to look at ways to quickly flip or sell the property and put the cash in your pocket.
The first way we are going to discuss is a quick flip to another investor. This is not the most profitable way to go, but when your need is to build a cash base for your current needs and to fund the marketing, this will get the deal done very quickly.
As part of your investing groundwork, it is smart to build an investor database or list of re-habbers, all cash investors to minimize your financial exposure and to get deals done real quickly when that is what you want or need to do. These people know the real estate game, and are great to deal with because they make quick decisions. Often you can dispose of the property in a week this way.
Remember though, if the person you are going to do a deal with is another investor, they are going to want a deal also, since their motive is to fix and flip or just sell right away to a retail buyer, so your profit margin is not going to be as big as if you were selling to a retail buyer. The name of the game here is speed.
To help build your database of likely suspects, you can use classified ads, flyers to Real Estate Investment Organizations, the internet, and signs. You can even cold call contractors and we buy houses ads you see along the roads at busy intersections. The bigger you can build your list of potential wholesale buyers, the quicker you will be able to sell.
Dont overlook classified ads either. Place and ad about a Handyman Special at a great price and watch your phone ring off the hook! But there is a problem you may face when you do this. Lots of people will call who are not qualified and do not have the ability to close!
So you have got to get good at qualifying people quickly over the phone. Do not waste your time when it appears that they cant close the deal, thank them for their time and get off the phone as quickly as possible.
To summarize, in order to turn the houses you buy into cash as quickly as possible, you need to build up a list of the interested partied and be prepared to contact them by email or phone as soon as you acquire a property.
One of the great things is after a while you will deal with the same people over and over again. All you need is a few people who are high volume rehabbers and they will take all the deals you can find.
Marko Rubel is a prolific investor living and working in the Phoenix, Arizona area. He is much in demand as a speaker on real estate topics throughout the US, and also offers his own seminars and home study products. To find out more, visit http://www.freewealthcoaching.com or http://www.niche2wealthsystem.com or http://www.profitgrabber.com