The Art of Wholesaling Properties: How to Buy and Sell Real Estate Without Cash or Credit

By Alex Virelles and Aram Shah

The Art of Wholesaling Properties: How to Buy and Sell Real Estate without Cash or Credit distills the experiences of two of the nations largest real estate wholesalers who, all told, have flipped over one thousand homes. Aram Shah and Alex Virelles present a step-by-step guide that explains how others may replicate their proven methods in their own wholesaling ventures.

Reading this book will give investors the A-to-Z insights they need for cashing in on the fastest and most profitable ways to flip paper in the real estate market. Moving along a strategic step at a time, The Art of Wholesaling Properties explains how to

make offers that actually get accepted; find hidden, motivated sellers; use a real estate agent to find gold mines through the MLS; build a strong list of cash buyers; negotiate with sellers using proven and tested scripts; assign or double close on properties; master the A-B, B-C transaction; deploy a team and put the business on autopilot; and achieve financial freedom without using cash or credit!

If you find the prospects of making money exciting, if you get the feeling there is wealth hidden in the real estate market in your community, and if you desire to learn demonstrably successful techniques to apply in your own ventures, then The Art of Wholesaling Properties: How to Buy and Sell Real Estate without Cash or Credit will give you the guidance and education you need to begin wholesaling homes and generating profits without using your own cash or credit.

• Language: English
• Publisher: iUniverse
• Release date: Nov 24, 2015
• ISBN: 9781491775684

Alex Virelles

Aram Shahentrepreneur and real estate coachconsistently ranks as a million-dollar wholesaler. He holds a masters degree in real estate development from New York University. Alex Virelles is a million-dollar wholesaler, real estate broker, coach, and investor with a bachelors degree in business administration from the University of Miami. He founded Diplomat Property Solutions, LLC, South Floridas leading property wholesaling company. He also owns a real estate brokerage company.

Book preview

Contents

Foreword by Robert Shemin

Preface: The Three Building Blocks to Wealth in Trading Real Estate Paper

1. The Wholesaler’s Mind-set

Why the Perfect Time to Start Wholesaling Is Now

An Appreciating Market Works for You

Cash Buyers Are Looking for Deals

Points to Remember

2. What Is Property Wholesaling?

Securing Hard-Money Funds and Transactional Funding

A–B and B–C Transaction Defined

Points to Remember

3. Getting Started: Finding Cash Buyers

Why You Must Find Your Buyer Before Finding Your Property

How to Build a Strong Cash-Buyers List

The #1 Way to Get Cash Buyers: Bandit Signs

Additional Methods for Building Your Cash-Buyers List

Use the MLS to Check Cash Buyers’ Stats

Points to Remember

4. Finding the Juicy Deals

Secrets to Finding Distressed Sellers

Criteria You Need to Give Your Real Estate Agent

Starting Your Search

Find Off-Market (Non-MLS) Deals

How to Work Direct Mail and Drip Campaigns

The Art of Speaking with FSBO Sellers

Dialing for Dollars and the Magic 50 Percent Formula

Sellers Lead Sheet

Handling the Two Most Common Objections from FSBOs

Points to Remember

5. The Art of Making a Winning Offer

Choosing the Perfect Comps

Seeing the Property for the First Time

Using the MAO Formula to Make an Offer

Filling Out the Contract

Your Initial Meeting with the Seller

Using the 20-20 Rule to Lock Up Properties

Points to Remember

6. Marketing Magic: How to Secure an End Buyer Once You Find a Deal

Property Marketing Secrets

Scripts for End Cash Buyers

Avoiding Pitfalls with Tenants

Points to Remember

7. Closing the Deal: Double-Closing Versus Assigning

Is Your Cash Buyer for Real?

Follow the Money

The $10,000 Question

Using A–B Transactional Funding

Maneuvering the B–C Transaction for Double-Closing

Receiving Deposits from the End Buyer

Points to Remember

8. Foolproof Exit Strategies to Get Out of a Deal

Use Inspection Periods to Back Out or Renegotiate

The Art of the Subject to Clause

Use Liens and Violations to Exit or Get Discounts

Can’t Exit? Get Creative

Points to Remember

9. The Seven Biggest Pitfalls When Wholesaling Properties

1. Skipping the Inspection

2. Not Using Your Title Company or Attorney for the Deal

3. Marketing Properties That Are Not Yours

4. Not Using a Joint-Venture Agreement with Other Wholesalers

5. Not Staying on Top of Cash-Burning Deadlines

6. Marketing Before the Contract Is Executed

7. Burning Bridges

Points to Remember

10. Putting the Wholesaling Business on Autopilot

Understand Your True Net Worth

How to Pick Your Dream Team and Pay Them Right

Maximize the Three Ways to Make Money in Wholesaling

Leverage Your Way to a Fortune

Points to Remember

Epilogue

Appendix K–HUD-1 Settlement Statement

Appendix L–Your Wholesaling Resources

Appendix M–Cash Buyer Question List

Appendix N–Motivated Seller Question List

Appendix O–Offer Packet

Appendix P–Assignment Agreement

Appendix Q–Joint-Venture Agreement

Appendix R–Sample Marketing Blast

Appendix S–Memorandum of Interest in Real Property

About the Authors

This book is dedicated to the entrepreneur inside you—the one who’s ready to break free from the rat race. Let this book be your guide.

Two roads diverged in a wood, and I—I took the one less traveled by, and that has made all the difference.

—Robert Frost

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.

There are secrets here that until now have only been available to a select few in a meritocracy society of investors. For the first time, Aram and Alex are going to reveal these secrets and share them with you. I invest in real estate as a professional, and I’ve been successfully implementing these tried-and-true tactics for many years.

This book will show you how to find good deals in today’s hot markets and make significant profits. Aram and Alex reveal what’s working in one of the hottest and most competitive markets in North America—South Florida—so you can take the strategies and implement them in your own market. If you’re ready to take the bull by the horns and empower your investing career, even with little cash or credit, then buckle your seat belts. You are about to learn the strategies that will let you choose how much money you can and want to make.

As an attorney, I realized that working hard and long hours was a laborious path to generating income. That’s why I turned to investing and how I became truly wealthy. The wholesaling strategies you’ll learn here will permit you to adopt the millionaire’s mind-set. You’ll create your own future and make your mark by wholesaling properties. Ready? Let the journey begin. Much success to you.

Robert Shemin

New York Times best-selling author

www.robertshemin.com

Preface

The Three Building Blocks to Wealth in Trading Real Estate Paper

I love trading real estate. It is probably the only opportunity that a nonwealthy person can master to make tons of cash. If you study the great rags-to-riches stories, you’ll see that a majority of the folks profiled either made their wealth in real estate or held their wealth in real estate. Real estate is definitely the common denominator.

When I first started in the game, I was part of the nonwealthy group. I had very few resources. I had little to no money or experience. As a result, I lost a lot of money in the beginning making mistakes—for example, locking up a great investment property and not knowing how to flip it in time, or not knowing what to do when my end cash buyer walks out twenty-four hours prior to closing. Another great one was finding real end buyers but not being able to locate a great deal for them.

There was a lot of trial and error, but I got through it. I spent tons of money on education. I maxed out my credit cards to afford buying every book and attending as many seminars as I could to learn the business. I made sacrifices, and I learned a lot. What I conclude now, looking back after ten years of hard work, is there are three major building blocks to creating wealth in the real estate wholesaling business.

First, you must have perseverance. You have to be willing to do whatever it takes, persist without giving up, and work harder than the next person. If this means not watching the NBA finals so you can write up an assignment contract or work on a huge double-closing that can potentially put more than $25,000 in your pocket, then so be it. You’ll have to accept that trade-off. One factor that contributes to perseverance is being adamantly ambitious.

Ambition, I will argue, is stronger and more powerful than even having an Einstein-level IQ. The person who is motivated, wants it bad, and wants it all—that’s the person who will make money and create wealth, even faster than an Ivy League grad who grew up with money, has lots of connections, and probably feels satisfied in a way that means there’s very little desire to acquire more.

Second, you need passion—and to succeed in this business, you must be passionate about real estate. Very early on, it became clear to me that if a person chases money and works at a profession just for the money, that person will not be as successful as the ones who are truly passionate about their endeavors so much that they will work on Sundays or work long hours to make their dreams come true. Many people become physicians or attorneys thinking those vocations provide the ticket to wealth. What they’ve done is invest hundreds of thousands of dollars in education, all to make no more than $10,000 or $15,000 a month. Contrast that with many of my students who are making three times that per month.

Part of the trap people fall into is a false sense of security in having a job. Anyone who works for someone else is always going to be an expense item on the boss’s profit-and-loss statement. When you work for yourself, you’ll have your own profit-and-loss statement. It’s the top-down view versus the bottom-up view. This sense of freedom, where you control your own destiny, is the real beauty of real estate wholesaling.

The last of the three elements needed for success is education. One of the important things that separates the rich from the poor is their knowledge base. If you grew up without that silver spoon in your mouth, you’re at a disadvantage because you won’t know the secrets that real estate insiders use to basically print money. In this book, I’m going to show you that you don’t need to start out with money or credit to make over six figures a year in this business.

Well, let me modify that a bit. You’ll need some petty cash to cover start-up costs. You’re going to make some bandit signs and get some business cards printed, but that’s not going to break the bank. I am going to reveal all the secrets that I’ve become aware of and accumulated in my ten years of real estate experience. Living through the financial crisis that began in 2008 and turned into the great recession of 2009, I’ve seen the real estate market crash before my eyes. It was shocking because just prior to this period, there was an unprecedented real estate boom that lasted about five years—and was a fantastic time for wholesalers to jump in and flip their way to becoming millionaires.

That time has come again. The market across the United States has pretty much bottomed out. The average home is no longer underwater; owners have equity again. This means there’s money to be made. The absolute most beautiful thing about this business is that we never actually buy real estate. We simply control it. We are the principal conductors of the orchestra, conducting every part of the real estate transaction—connecting the motivated end cash buyer to the distressed seller and filling in the gaps with the rest of the team members (title company, hard-money lender, listing agent, and so on).

A lot of my wholesaler colleagues may hate me for revealing these secrets, because quite a few of them charge thousands of dollars for seminars where they share the kinds of things I’m telling you in this book. However, I don’t believe in that kind of information hoarding. There is room for everyone at the top. I believe in giving you good, quality education and teaching you how to make real money. In the next ten chapters, you’ll see how to start investing with nothing down, how to build your wholesaling real estate business from scratch, and how to turn it into a legitimate, thriving business where a team of worker bees brings you deals every day.

The purchase price of this book will be the best investment you could ever make. I promise you no fluff—just pure, solid (and entertaining) facts on how to make some serious money in this business. What I learned struggling with trial and error during my early years, I perfected and implemented into my wildly successful wholesaling business. Now I am going to share this methodology with you so you can use it to blaze your own trail. The core lessons of perseverance, passion, and education are the three main building blocks you’ll need to get wealthy trading real estate.

You’ll learn the specifics, including exactly how to lock up a real estate property under contract, and how take that contract (or paper) and sell it to the next person for a chunky cash fee up front. I’m going to help you overcome the initial—and normal—anxiety about calling and visiting sellers by telling you exactly what to say via tried-and-true tested scripts.

I’ll also show you how to write up a proper contract, and I’m going to guide you through implementing the critical escape clauses. You’ll also learn how to work your real estate agent so he or she will be motivated to help you find juicy deals. Mostly,