How to Sell Your Real Estate Note

Author: Heather Dunlop
Source: ezinearticles.com

So you want to get started investing in real estate and don’t know where to start. You’re tired of the daily grind at work, or maybe you are out of work. You’ve heard that real estate is a good way to make money and work for yourself. One way to get started quickly is by wholesaling houses.

Wholesaling houses means you are the middle man. You find a seller, get the house under contract, and assign the contract to a buyer, whose closes on the purchase of the house. You make your money as an assignment fee.

When you wholesale houses, you are looking for motivated sellers. You are there to solve the seller’s problem. These sellers may be behind on their mortgage payments, facing foreclosure, had to move out of state for work, have an illness that is forcing them to sell, divorce, and many more reasons. It is your job to find these sellers, meet with them, and put the house under contract to solve their problem.

The next thing you need to do is find an all cash buyer for the house. These are investors who are looking for a good deal on a house. You can save them the time of meeting with multiple sellers, which is why they will pay you an assignment fee.

The buyers you are looking for are investors. You can find these buyers by contacting the people who advertise “We Buy Houses”. You can also buy a list of people who bought a home in the area in the last 6 months who are “absentee” owners (this means this in not their primary residence). Contact landlords in the area. Go to a local real estate investment meeting. There are many ways to find cash buyers. Once you have a good deal, you will be able to find them.

Here are the simple steps to wholesale houses:

1. Find a motivated seller
2. Agree on a purchase price that allows you to sell the house quickly and make a profit
3. Get the house under contract with you as the buyer
4. Have a clause in the contract that allows you to assign the contract
5. Find an all cash buyer
6. Make sure the buyer closes on the house
7. Collect your check

The one thing you must make sure you do is get the house under contract for a purchase price that allows you to make some money, and also leaves plenty of room for your investor buyer to make a profit. The most successful wholesalers leave the majority of the profit for their investor/buyer. If your investor buyer does not see a profit, you will not be able to wholesale the property, which means you will either have to buy it or lose your earnest money deposit.

By now you should see that wholesaling houses is a way for you to get started in the real estate investing field. Good deals are easy to sell, as long as you know how to recognize a good deal.

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Author: Robert K. Lear
Source: articleage.com

Consider these parameters for a real estate deal:

Property Value: $250,000 Purchase Price: $160,000 Repairs: $2,500

If you analyze the numbers, you see that the equity available in
this deal is $87,500 (Property Value minus Purchase Price minus
Repairs).

So here’s a hypothetical question for you: Assuming that the
information above is accurate, and the property is located in an
area that you view as acceptable and/or favorable, then:

If I offered to give you this deal in exchange for $10,000 in
cash, would you do it?

Remember – this is hypothetical. The real question here is this:

Would you exchange $10,000 in cash for $87,500 in equity?

For most smart investors, the answer is: Absolutely YES!

And this is called “Wholesale Real Estate Investing” – the
process of buying a lot of equity at a very significant discount
from another real estate investor who has already done the hard
work of finding a deal and getting it under contract.

Just think about that – consider how easy real estate investing
would be for you if you had a network of real estate investors
in your area (and maybe all over the country) who, several times
each month, offered you the opportunity to purchase significant
amounts of equity for a severe discount…

…It would be quite easy to become wealthy, wouldn’t it?

The answer is: Yes, it will.

You’ve got to admit – it will be a pretty wonderful thing when
you know how to find great real estate deals in which you can
trade a small amount of cash for a large amount of equity
without even having to find the deal yourself…

…and that’s exactly what wholesale real estate investing is
all about.

Wholesale real estate investing is conceptually very simple.
Here’s how it works:

First, “Investor A” finds a great real estate deal with a lot of
equity. Typically, Investor A will have spent a significant
amount of time, money and expertise to find the deal, negotiate
the term and get the property under contract. By putting the
property under contract, Investor A now has control of the
property, and the equity in the property.

(For this example, imagine that Investor A has found a property
worth $200,000 and has set a purchase price of $115,000 and he
also knows that there are $15,000 in repairs, which leaves an
equity position of $70,000).

Second, “Investor A” finds another party, “Investor B”. Investor
B recognizes that the contract that Investor A has established
is worth $70,000 in equity, and so he strikes a deal with
Investor A to turn the deal over to Investor B in exchange for
some amount of cash (we’ll use the value of $12,000 in this
example).

So Investor A is giving up $70,000 in “potential” profit in
exchange for $12,000 in current profit. And Investor A is paying
$12,000 because he believes he can make more than that on the
deal, since there’s a full $70,000 of equity.

This deal between Investor A and Investor B is called an
“Assignment”, because Investor A is assigning the contract to
Investor B.

Third, Investor B does his “due diligence” to confirm that the
deal is as good as he thinks it is.

Finally, Investor B closes the purchase of the property, and
Investor “A” receives the assignment fee from Investor B.

This is, obviously, a simplification of the process. But this is
essentially how it works – not so difficult, is it?