| 5 Figure Assignment Fees may be hard for some | | | | by leaving it to happenstance. Once you have an |
| people to believe in today’s Real Estate Market. | | | | executed purchase agreement with the motivated |
| Believe it or not, they are still out there for the | | | | seller that contacted you and you’ve negotiated |
| active, persistent and methodical real estate | | | | a hot, smoking deal with your and/or assigns on that |
| investors, even the first-timers! | | | | top line…you are ready to find your buyer. |
| Wholesaling | | | | Note: In my contracts, “and / or assigns” is a |
| Wholesaling is the art of finding and assigning | | | | part of the agreement along with the following |
| properties. It can be so appealing to new investors | | | | clause. |
| because there is very little cash required to support | | | | Buyer shall receive a key within 48 hours and be |
| these types of deals and credit is not an issue. A | | | | granted access to the property to allow partners and |
| new investor requires only a small amount of cash to | | | | contractors to evaluate it as needed. If the seller is |
| cover earnest money deposits, advertising, etc.things | | | | still living in the house, I request access on |
| like this. | | | | pre-arranged days and times. When they won’t |
| Discover your mission, vision, or purpose in life. | | | | be there and this allows me to get my investors in |
| Spend some time envisioning the type of lifestyle | | | | to see the property. |
| that fits your family and personality traits. Then begin | | | | How to help your buyers see the value in your deal |
| to realistically set your goals based upon the vision. | | | | I try to make it as easy as possible for my buyers |
| Remember the basics about goals – they should | | | | to access, evaluate and purchase my wholesale deal |
| be SMART GOALS. | | | | by doing the following. By having my contractor to |
| S-pecific | | | | come out and submit an estimate on the needed |
| M-easurable | | | | repairs (on his professional letterhead) can save my |
| A-ttainable | | | | buyer/investor a great deal of time and guesswork |
| R- ealistic | | | | and I also ask my real estate agent for some |
| T-imely | | | | accurate comps on the subject property. Even |
| Aim for what really matters to you. Discover your | | | | though I encourage every buyer/investor to pull their |
| mission/vision/purpose. and teach yourself how to | | | | own comps, perform their own due diligence, |
| set and persist to achieve your goals. To manage | | | | I’ve found that by doing these things, they are |
| time effectively track your tasks consistently, so | | | | steps that aid in the process of assigning the deal. |
| that you don’t waste time on non income | | | | So at this point, you’re so close to that meeting |
| producing activities. Visualize and focus on your goals | | | | with your bank teller right? …hang on! |
| daily to ensure that your actions reflect that which | | | | At this stage, you have the property under contract, |
| pertains to your goals. | | | | you’ve got your estimate(s) for the repairs, |
| What tools do you need? | | | | comparables, photos, and you’ve got access to |
| The basic tools that you will need as a new | | | | the property and your blank assignment of contact in |
| wholesale investor are these: | | | | your hot little hands. You’ve done a lot and |
| * Cell phone - (preferably a PDA) with unlimited | | | | you’re close. |
| minutes, you’ll need them! This will help you to | | | | How to Find a Buyer for your Deal |
| organize your tasks, records, phone numbers and | | | | During this point, time is certainly of the essence and |
| synchronize with your computer. | | | | you’ve got to get your e-flyer made and sent |
| * Computer - researching data comps and for | | | | out to your database, your craigslist ads, your |
| marketing your wholesale deals | | | | for-sale-by-owner posts, directional arrows and a |
| * Printer - print out contracts, contracts and any | | | | hard copy to bring to your local real estate investor |
| documents | | | | club. |
| * Camera - this is an absolute must have for creating | | | | In my experience, they are many, many |
| your e-flyers to mail our to your database to sell | | | | “wanna-be” investors that read book after |
| your deal | | | | book, attend seminars and invest within the confines |
| * Contracts / Agreements | | | | of their minds. My advice to my students is to weed |
| * Fax Machine | | | | out the tire kickers from the decision makers, early |
| * Filing Cabinet – you’ll need this too. | | | | on before they have a deal. Create a performing |
| As your business evolves, you’ll reach a point | | | | database. It doesn’t have to include many, many |
| where you will find other tools and gadgets that | | | | names…. just the ones that know a hot, smoking |
| increase your productivity and your profits. | | | | deal when they see one and that will perform when |
| How to find deals: | | | | the times comes to do so. |
| There are many places to you can locate deals and | | | | What day is it? Now it’s payday! |
| here is a list a few of them: | | | | Your end buyer / investor will be exchanging a signed |
| * Vacant Houses | | | | assignment of contract with you for a fee. They are |
| * Title Companies | | | | paying for the right to step into your place and fulfill |
| * Home Inspectors | | | | the obligations that you and the seller have set forth. |
| * REIA Clubs | | | | Collect a deposit from your buyer as you hand over |
| * FSBO’s | | | | the purchase agreement and obtain a signed |
| * Bankruptcy Attorneys | | | | assignment of contract . This will help you to |
| * Homeowners Associations | | | | separate the decisive, action taking investors from |
| * Burned out Landlords | | | | those that have a case of paralysis of analysis. If |
| * Bail Bondsmen | | | | your buyer is serious about moving forward, they will |
| * Code Enforcers | | | | have the wherewithal to hand over a deposit in good |
| * Hard Money Lenders | | | | faith thereof. |
| * Meter Readers | | | | Since it’s your deal, you would be using your title |
| * Waste Management | | | | company who is most knowledgeable and skilled in |
| * Divorce Attorneys | | | | the art of wholesaling properties and the manner in |
| * Probate/Trustees | | | | which you operate your business. You will provide |
| * Tax Offices | | | | your title agent with instructions about the remaining |
| * Garage Sales | | | | funds that will be released to you upon settlement. If |
| * Estate Sales | | | | your title company is not able to release those funds |
| ** Every time you go for a ride, take a different | | | | to you at that time, it’ll be necessary to execute |
| route to get to know your neighborhood, the | | | | an addendum with your buyer. |
| properties, comps, vacants and utility workers. | | | | An addendum attesting to the fact that you will be |
| Once you’ve made contact with a truly | | | | both be at the closing and the buyer ( your assignor) |
| motivated seller- you’ll make them an offer on | | | | must pay you in the lobby immediately following the |
| that property based on the comps, repairs and your | | | | closing, along with a Notarized Memorandum of |
| desired profit. | | | | Agreement would help to protect your interest. |
| Quick Calculation of the Maximum Acceptable Offer: | | | | Assignment fees can be very lucrative in certain |
| (MAO) | | | | markets. On my very first wholesale deal- the |
| MAO = (ARV x .65) – RC – CC – AF | | | | assignment fee was $7,000 and I had never done it |
| ARV = After Repair Value | | | | before….so not bad right? My third wholesale deal |
| RC = Repair Cost | | | | allowed for a $40,000 fee because it was a hot, |
| CC = Carrying Costs | | | | smoking deal. The buyer, a contractor was thrilled to |
| AF = Assignment Fee | | | | get that property so that he could rehab it and make |
| Assigning The Contract | | | | his profit. |
| The most important thing to do here….in the | | | | Hot, Smoking deals are out there….if you’re not |
| money step is to be very clear that you’ve | | | | paying attention, you’ll bump right in to one of |
| contracted to purchase the property as “your | | | | them! |
| name….and/or assigns”: By placing and/or | | | | So, with that- see your vision, steady yourself, |
| assigns after your name, you’ve ensured your | | | | prepare with vigor and head in that direction with |
| ability to assign the deal to an end buyer. Although a | | | | renewed energy, confidence and persistence…and |
| contract is usually assignable unless otherwise stated, | | | | remember to enjoy the journey. |
| I would hate for you to fall down on the money step | | | | |