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Wholesaling Homes: Finding Inventory In Today's Hot Market

by blogger1
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on Thursday, 09 May 2013
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How can investors find more viable inventory in today’s hot real estate market?

Declining housing inventory levels may be providing a nice boost to home values across the U.S. but this is also making it seem harder for some investors to line up as many deals as they would like.

Publicly available housing inventory levels are now way beyond what is required for a normal, healthy and balanced real estate market. At the same time the situation is being compounded by a dramatic increase in competition in the industry as more Realtors and investors jump into the game of hunting home sellers.

To come out on top in the midst of the current fierce bidding wars over homes for sale those wholesaling homes can use transactional funding to make cash offers and close quickly, even if they don’t have great credit.

Still it is smart to find more ways to uncover deals and navigate around the competition to get better discounts too. This can include tapping into non-performing mortgage notes versus REOs, or looking to niches like marketing for probate properties and building relationships for access to the rising number of pocket listings.

Still, ambitious real estate investors can feel that they are falling short of their volume and income potential. So what’s the solution?

Those that want substantial amounts of leads and need them to flow in predictably or at least on demand can turn to pay for performance marketing in the form of third party telemarketing through outsourced call centers or PPC advertising via Google Adwords.

For those that are on ultra-tight budgets or hate writing checks for marketing regardless of the guarantee of real leads or ROI taking a guerilla marketing approach can still work well.

This doesn’t have to mean substandard results either. Hot cloud storage service DropBox is pure proof of this. DropBox launched during some of the toughest times for small businesses, went live amid a maze of other competitors, and at a time no one saw the value of cloud storage, or cared about having it. Still, they managed to accumulate many users even before going live, then rocketed to millions of customers with 18 months by focusing on word of mouth referrals and viral campaigns.

These are all tactics that can be adapted for hunting down or attracting distressed sellers for bagging more discounted deals for wholesaling homes. The potential is huge, if you really have the determination.

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Wholesaling: How Can You Market Property You Don’t Own?

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on Friday, 08 March 2013
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Can real estate investors market homes for sale that they don’t actually own yet?

This is one thing that catches investors off guard. The rise of transactional funding has made it easy to complete double closings and flip more houses faster with less risk but at the same time many don’t understand the complexities of marketing properties for sale that they don’t actually own.

So can you market a wholesale property that you have under contract for a fast flip and higher ROI using transactional funding or could that even be illegal?

It is first important to point out that this can be a legal issue. Each state has its own real estate laws and regulations and it could be argued in some cases that you cannot list or publicly advertise a home for sale that you don’t actually own yet.

Certainly doing this will drive some real estate agents mad, as well as some sellers when they see your sign in their yard after signing the contract and know they could have sold it for more money. There can also be problems if trying to list properties like this in the MLS and you could be required to have a license if you are selling other people’s homes.

Some buyers and their agents might think this also smells a little too much like some of the fraud that has been going on through Craigslist lately. Banks with REOs and short sales will also take a particular disliking to this if not hauling you off to court.

Fortunately there are some quick and simple fixes. The first is to get permission. This is something you ought to do anyway and will make reselling fast and for the most money a lot easier. Get an addendum executed that allows you to remarket, advertise and even show the property for sale when you go to contract. Many sellers won’t care at all. They want out or want their figure and that’s it.

Where and how you market these flips is also a consideration. Putting signs in the yard or posting ads with the address in the local newspaper or real estate magazine or putting a giant for sale sign in the yard can obviously ruffle some feathers.

However, this is often rarely a path that savvy and experienced real estate wholesalers need to go down. Remember that your best buyers (those that will move fast and be happy with the transaction) are other real estate investors, not retail buyers. A better move is to have a pool of secondary investors already lined up to buy whatever property you put on the table providing the numbers match their criteria. Then you don’t have to publicly market each individual property and can cut out a lot of wasted time, money and hassle to wholesale more homes faster and better profit margins.
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