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7 Ways For Your End Buyers To Fund Deals In 2018

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on Sunday, 07 January 2018
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Successfully flipping real estate deals in 2018 relies a lot on finding end buyers with the financial means to purchase properties. The more that flippers and wholesalers can help prospective buyers find and connect with financing, the more deal volume to be done, and the faster they can be flipped.

Here are seven ways your flipper, rental property, and retail buyers can fund their purchases from you this year.

IRAs & 401ks

There is a lot more awareness of the ability to invest in real estate through self-directed retirement accounts today. Others still need to be turned on to the option. Though many more may begin to use these account options as the stock market continues to inflate and stocks become more expensive.

1031 Exchanges

Some US real estate markets appear to have matured, as have some individual investments. By using a 1031 exchange, investors can acquire your deals, while deferring tax liability on their gains.

Private Lending

Investor buyers without enough of their own cash and capital can find that individual private lenders are still the best option for financing. These lenders can be far more aggressive in terms and loan amounts, and are typically far faster and easier to work with.

Hard Money Loans

These loans are great for those who don’t want to deal with the hassles of conventional mortgage loans, or may be buying properties with repair needs that fall outside of conventional underwriting requirements.

Rehab Loans

Whether from investor specific lenders or the FHA 203k loan, there are great funding options for acquiring houses at a discount that need some repairs or updating.

Low Down Payment Loans

While investor loan LTVs have risen to 90% and even 100% in some cases, regular home buyers are also finding more and more low down payment options as well. This ranges from government loan programs like USDA and VA loans, to those offered by mortgage lenders like Flagstar which can be combined with local down payment assistance programs.

Seller Financing

Seller financing is still one of the best ways to ensure fast resales at maximum resale prices. That may be a low down payment large first mortgage, or carrying a second mortgage loan.

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How Much Money Should Real Estate Wholesalers Make?

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on Thursday, 12 January 2017
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How much profit should you be making on your real estate wholesale deals?

Property wholesaler profit margins are one of the most commonly debated topics among new investors, rehabbers, and buy and hold landlords. So, what’s the right amount? How much is too much? How should wholesalers set their markups?

Some wholesalers may not make as much as they could on deals because they are intimidated about losing them. Sometimes end buyers are complaining that wholesalers are asking for way too much, and are just wasting their time. So how do you pick the right number?

4 Ways to Price Your Wholesale House Deals

Fixed Fee or Percentage

One way to choose is to pre-determine what percentage or dollar amount you are going to charge across all of your deals. It could be 3% or 6%, $1,000 or $100,000. Or more. It’s up to you. This can make it easy when screening potential properties to see if they match your criteria. However, one flaw is that this doesn’t always maximize your deal flow and profit potential long term as the market changes.

Profit Left to the Next Buyer

Again, you can choose a fixed dollar amount or percentage spread which you think if fair for you end buyer to make after they buy, fix, and flip or rent the property. Of course, every buyer is different. Some use cash. Some use very expensive hard money loans. Some can get rehab work done cheap. Others pay a lot for contractors and materials. Some can flip a property in a week. Others take over 6 months to complete a flip.

ROI on Your Time

As a real estate wholesaler you are providing a valuable service. However, unless you have a team you are still often trading your time for money. Make sure you are getting a fair return. What’s your time worth? How much time do you spend flipping a deal? If you just quit working a McDonalds for minimum wage, then making $30 an hour may seem like an awesome deal. If you just quit being an attorney or doctor making $500 an hour, then you’ll probably want to make sure you are earning $1,000 an hour as a wholesaler. Remember to factor in all the time prospecting, screening, negotiating, and marketing, and managing the transaction.

Filling Orders

Another way to do this is to simply fill orders. Take pre-orders for deals aka ‘reverse wholesaling’. Then go find a fit, and profit what you can. You may have end buyers who are happy with 20% returns on two flips a year. Others may insist on getting properties 40% below market value, or being able to double their money. Take the order, find the deals, squeeze in however much you can. This is a little more fluid when it comes to predicting your income. However, it can lower risk and waste. One downside is that you are effectively letting someone else set market prices, versus controlling them yourself.

Looking Forward

There are wholesalers who can make $100k per deal, and do 10 deals a month. Others might do 1-4 deals per month and are very happy putting $20k in their pockets. Some might land some whales and make a million on a very juicy deal. A lot of it depends on how good you are at finding and negotiating deals, as well as how you market and present the inventory.

One thing which is really important, and which many wholesalers forget is to keep an eye on the changing market. Prices and profit margins will change. Protect your income and industry but refusing to sell out too cheap, but give good deals if you want more business.

 

What do you think? How much do you charge? How much do you think wholesalers should markup deals? Let us know on Facebook and Twitter

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4 Ways Property Wholesalers Can Help Their End Buyers Be Successful

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on Thursday, 29 September 2016
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The more property wholesalers help their end buyers be successful, the more they will be successful themselves.

Wholesalers who are serious about succeeding will proactively look for ways to help their end buyer customers. The more profitable and efficient they are, the more homes you can sell them, the more loyalty and trust you will build, and the more you’ll enjoy what you do.

So how do you help your rehabbers and landlords who are buying your properties?

Pile on the Referrals

As a true wholesaler you may not be interested in retail buyers, or getting involved in renting or rehabbing at all. Yet, chances are you’ll run into plenty of these leads every week. Pass them forward.

This can include renters, Realtors, contractors, retail home buyers, and buy and hold investors looking for rentals, as well as lenders offering long term financing and rehab cash.

Provide Better Intel, Earlier

What slows most rehabbers down the most? Evaluating properties and getting the work complete. So give them a better head start. When you can get them access to the property in advance. When you can’t provide more detailed information, repair estimates, repair needs, etc. If you let them know what deals you may have coming up, even before you are ready to close on the B to C transaction they can be sure to have their financing and crews lined up too.

Share Marketing Tips

What is the biggest sticking point for more end buyers? It’s getting that property resold or rented so they can bring cash in and buy more inventory from you. Help them with that. It is only to your benefit. According to RealtyTrac flip times are at a new record high of over 6 months! That’s crazy. Start a real estate blog and share marketing tips to help them move their deals faster. Share tips you find via social media and email too. They’ll appreciate it, and you might generate more end buyer leads in the process.

Be Consistent

Stay consistent with your inventory conveyor belt, the quality and accuracy of your deals, the match for your end buyers, and the frequency. If they can rely on you to have the good deals when they want them then they will keep coming back.

 

Authored by BestTransactionFunding.com - the leading source of transactional funding for real estate wholesalers in the US. 100% financing, and saying “Yes” is what we love doing all day long.

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