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Step 1
Arrange your contracts (make sure it's assignable), closing company (or lawyer as the case may be) target area and good place to find reliable comps.
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Step 2
Once the beginning steps are inplace you need to think about what marketing you will use to find motivated sellers (people who have some compelling reason to sell NOW at a discount). Some investors use bandit signs or flyers. Most wholesalers just starting out will "drive for dollars". This consists of driving your target market looking for run down VACANT houses and contacting the owner.
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Step 3
Negotiate the deal. Typically, You'll want to buy the house at 70% of it's after repair value, minus any repairs to get it in top condition, minus your wholesaling fee ($100,000 arv *.70 = $70,000 - $10,000 repairs - $5,000 wholesale fee = $55,000 max offer)
Typically, I'll subtract $5000 for my profit. This formula varies in different areas, so be sure to contact someone in your local area to give you a better idea. -
Step 4
Once you have the deal, sign it up!
Now pick up the phone and call the "we buy houses" ads in the paper and let them know you have a deal to assign to them for $5,000. Place an ad in the paper, bandit signs around the property, call every investor you can find to sell the deal to. -
Step 5
Once you've found your cash buyer, verify their funds, collect a non refundable deposit and sign the "assignment agreement". Fax the contract and assignment agreement to your closing agent.
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Step 6
Show up at closing with your buyer and get paid. Find the next deal.
