Investor-Agent Rules of Engagement

Investor Agent
Investor Agent

 

As you begin the process of using your real estate license to build your thriving, profitable Investor business, you should be aware of some of your clients’ expectations and the possibilities for you to create multiple streams of income. Some of the information in the beginning of this article may be a refresher for more experienced agents. I would still review it though so the rest of the article will have more meaning for you,

 

Real Estate Agent Rules of Engagement

MyInvestmentServices.com

Before you can practice real estate you need to obtain a real estate practitioner’s license for the state in which you wish to represent others in real estate transactions.  There are typically two classes you need to take, one is national and one is state. They are usually 30 hours each. You can now take these completely online, in a physical classroom with other students or a combination of the two. There are multiple providers for these classes. Many Real Estate firms offer these classes to prospective agents. They may even offer to pay for your classes if you sign up with them for one year. I do not normally recommend this latter approach. I recommend you take the classes and pay for them out of your own pocket. Then after you take and pass the licensing exams you can choose which company to practice real estate with. In order to practice real estate licensees do need to place their license with a real estate firm.

Once you have taken the classes you will then be required to take two exams, state and national. I highly encourage you to take several practice exams and even take a class that prepares you specifically for the exams. When I prepared for the broker’s exam I took thirty practice exams.

Once you have taken the classes, taken and passed the exams, and placed your license with a real estate brokerage firm, you now have the right to practice real estate. This does not mean you are prepared to practice real estate; rather you simply have earned the right to practice because you now supposedly have a fundamental understanding of real estate laws. That is all the classes you have taken so far are designed to do, that is, educate you on the very basic legal rules and regulations you need to be familiar with so the consumers you represent get fair representation from you.

Now you need to learn how to use your license in the business sense. This book is not intended to educate you on all of the skills necessary to be a successful real estate agent. This requires continuous education on your part for as long as you practice. The world of marketing and advertising is constantly changing. You will learn a lot of what you need to know from your broker, other agents in your office and your own blood, sweat and tears. I will go over, in simple terms what is expected of you in the roles of agency.

Seller Representation

Real Estate agents could be involved in representing users and investors who are interested in disposing of their properties. This is a traditional activity in a commercial and investment brokerage, just as it is in a residential brokerage. When acting as a selling broker, an agent has an agency relationship with the seller and owes him or her fiduciary duty.

Buyer Representation

Another activity in which Real Estate agents might be involved is representing users and investors who are potential buyers of properties in selecting and acquiring these properties. When acting as a buyer’s broker, the agent has an agency relationship with the buyer and owes a fiduciary duty to him or her. This activity is more common in commercial and investment brokerage than in residential brokerage. For example, an agent could represent several fast food chains in their search for locations to purchase as sites for their restaurants. By becoming familiar with the specific requirements of a few users, the broker can provide a service to his or her clients.

Landlord Representation

Further activity in which investment real estate agents might be involved is the exclusive representation of landlords in their attempts to locate tenants who would be users of their vacant spaces, negotiating the leases for the use of those spaces.

As leasing agents, brokers would be involved in many more transactions than brokers involved in the investor or development part of the business. In fact, many commercial investment managers agree that the best way to transition from residential real estate to nonresidential real estate is through leasing commercial space. This activity allows agents to interact with many tenants and property owners, all of whom have specific needs that agents can try to fulfill. In addition, brokers can become familiar with a variety of properties present in their marketplaces.

  • By showing potential users several properties, agents get to see a variety of spaces and have an opportunity to become familiar with the available inventory in the market.
  • By showing several properties to potential users, agents get to talk to and meet many property owners who have spaces to rent.
  • By showing multiple spaces, agents interact with other tenants who anticipate moving from their spaces and will need to find new spaces to occupy in the future.

Tenant Representation

Still another brokerage activity in which investment real estate agents could be involved is the exclusive representation of users looking to relocate and negotiating leases for space in landlords’ properties. By representing specific users, agents become aware of the users’ needs and the requirements properties must meet for the users’ businesses.

Of course you can use your license to help owner occupants buy and sell their own homes. Even though I was opposed to this at first I later warmed up to the idea and made a lot of money doing it. Let’s face it, all of the investors you service at one time or another will want to buy or sell their own home. You will also have come across many tenants who will one day buy their own home. You already have a database full of these folks. You might as well service them and further leverage the use of your real estate license and earn more commissions!

What’s more, these folks all have friends, relatives, neighbors, co-workers and fellow church members who want to buy and sell homes from time to time. I highly encourage you to remind your clients that you can service them too and encourage them to refer these people to you. When that happens you should reward them for their good behavior!

Speaking of referrals, the more you grow and prosper with your license the greater your reputation will spread. One way you can benefit from this is by sending referrals to agents in other areas. Surely, your clients have friends and relatives in other areas that either want to buy or sell their own home or may want to invest in real estate. A referral from you will carry a lot of weight and it will earn you a referral fee. Do not overlook this very valuable income stream. I have built an entire line of business around this very concept.

Build a Team 

Ah, yes, building a business. First of all I remind you to treat this entire venture as a business and run it as such. One of the best ways to manifest this is to build a team around yourself and your business. When I first got really busy, I had developed systems, processes and procedures for me to follow every day so I could handle all of the business. When building my brokerage company, Win Realty Advisors, I actually built a team first. The first person I hired was an admin person. She was from another brokerage company and had an awesome reputation for being able to manage multiple tasks simultaneously and get a lot done – a lot more than 99% of other people.

My recommendation to you is, when you get really busy, hire a superstar admin. Be picky, don’t settle. Remember the old saying – hire slow and fire fast. Your definition of busy may be different than that of the next person. I was juggling more than twenty transactions, teaching classes, investing in property and managing property all at the same time. I was pretty busy. Whenever you find yourself heading down the road of unhappiness from relationships that need more of your time, or you need more of your time, and God needs more of your time then it is time to make your first hire. Nothing is more important than you fulfilling God’s purpose for your life and that will likely include being a good partner, husband; father, brother, son and friend for those in your life. You can get a copy of my book Husband, Father, Brother, Son from the website www.MyInvestmentServices.com.

After that you will figure out what to do next. It may include delegating the execution of your marketing plan, delegating buyer showings. You will know when the time comes.

One of the best things about building a team is that it will position you to build your own brokerage firm in the future if you choose to do so. You can read more about that in my book Build a Real Estate Brokerage Company for Profit and Build Wealth for Life. You can get a copy of this from the website www.MyInvestmentServices.com.

There’s more! All of your investor clients are accumulating a lot of rental properties and they need help managing them. I think it is a really good idea for you to offer to manage these properties for them! As a real estate licensee with your license in a brokerage firm you can this. Some firms are more accommodating than others. I have found Keller Williams is the best real estate company for entrepreneurial real estate agents who want to grow their own businesses. In fact I know personally several KW agents who manage several hundred units each as an agent with KW. You can learn more about this by reading my book Build a Property Management Business for Profit and Build Wealth for Life. Not only do you earn management fee income but all of these folks can bring in additional sales for you too!

As you can see there are a number of opportunities for you to build wealth and income by working with investors. You simply leverage what you are already doing. You can leverage your systems and operations, including bookkeeping and marketing, in many directions.

Even at the most basic level, you can’t buy every property and neither can your clients. When you identify more great investment properties than you or your client can handle, refer the deal to another agent or investor and earn commission anyway from your efforts.  Remember, your real estate license is an income producing asset. Treat it like that and you will profit.

As you grow you will need systems, processes and procedures to allow for successful growth. These systems are not just for bookkeeping, marketing and advertising, and transaction flow but also for client support and representation.

Client Support and Representation

One of the first things you need to do when working with investors is to become familiar with the instructions I give to investors who work with me. You will find them in the Flip and Rental Rules of Engagement sections of this blog. Please remember that there are major differences between working with owner occupants and working with investors.

When working with owner occupants you generally do most if not all of the work. You do a lot more hand holding. They don’t usually know a lot and so you have to explain everything to them. They also tend to be more emotional in their selling and buying behavior. They also only need you once every several years.

Investors, on the other hand, get easier and easier to work with over time. They continue to learn. They are hands on. In fact, if you follow my instruction sheets, you will see that I delegate a lot of the work to them. You give them the data and let them do the financial analysis. They do drive by’s. They do the physical analysis. Anytime an investor approaches me and wants me to do all the work for them I take it upon myself to educate them first. If they don’t want to do things my way then I send them down the highway to some poor sucker of an agent who doesn’t know any better and has time to waste. Not me and not you. I also command a minimum commission. This protects me when working with investors who want to buy cheap foreclosures.

With investors I get to dictate that they work on my schedule. They may not know it but that is what is happening. I always schedule my showing days and times a week in advance. I send an email to my active clients on Wednesday and give them the day and time blocks I have available the following week. Then it’s first come first serve. They must give me the MLS numbers of the properties they want to see at least two days in advance of our scheduled date and time to meet and view properties. Oh, I occasionally get the knucklehead who can’t follow simple instructions. You know the ones who never could get to school on time and when they did they turned in their homework with food stains on it and that’s if they even had their homework. I give them a chance or two to correct their behavior, and I help them do that, but if it appears habitual I draw the line and they get the message.

I love working with investors because it’s repeat business. It’s the gift that keeps on giving. Many of my students have gone on to buy large apartment buildings earning me large commissions and large property management contracts. I am able to leverage all of my activities working with investors into additional lines of business providing additional income streams and wealth building opportunities. Perhaps one of the best benefits of working with investors is how many friendships I have developed where I actually get to spend time with them doing something we both love to do – build wealth and income with Real Estate!

Being the Right Kind of Realtor

If you are not a licensed real estate agent then read this. If you are a licensed real estate agent then you need to read this too so you will know what all of my students expect from you!

The following is an excerpt from my other books on what I teach investors to look for when selecting a real estate agent. This should be an eye opener for you. Also, I do not intend to insult you. I am one of you! I am merely enlightening you to what is expected of you as an investor agent. OK Ready? Here we go:

“The Investor Realtor! In the world of Real Estate Investing there is no other kind. If you are using your neighbor’s son then you are a loser and you will pay a dreadful price. Every real estate agent on the planet will tell you that he or she is the right agent for you and they are the best at helping you. Make sure you ask them how much real estate they own. How many other investors are they working with? If they have so many other investors then how do they have the time to help you? Keep asking questions. Eventually, they will run out of crap to tell you.

I originally got my real estate license because I was sick and tired of realtors who didn’t know what they were doing in the world of real estate. The rules of engagement for real estate investing are 180 degrees different form the rules of engagement of the owner occupied real estate business.

My neighbor was my 1st realtor. I had to fire her and it pissed off the whole neighborhood. She wouldn’t or couldn’t learn what she needed me to teach her. So I fired her and got my license. I eventually developed a system to teach other realtors how to work with investors. Trust me. It makes a huge difference. Having a traditional real estate agent try to help you with your real estate investing is like having a motorcycle mechanic work on your airplane.

If you invest in real estate the way I am teaching you to, then you will one day own an airplane. Now imagine yourself getting ready to take your plane down to Florida to play golf and you just found out your regular mechanic was off sick and the airport had a motorcycle mechanic, who happens to be the air traffic controller’s nephew’s neighbor, who just happened to be a recent graduate of the Acme school of motorcycle mechanics because he got laid off from his last job. How does that make you feel? Well, remember a lot of real estate agents are real estate agents because they got laid off from their last job and getting their real estate license took only 60 hours and cost only a few hundred bucks. Does it sound like they are highly qualified to help you invest your precious hard earned money? I didn’t think so. Don’t be stupid. If you use one of these Imbeciles you will end up losing your money and wishing you were going down in that plane that the bozo motorcycle mechanic worked on. By the way, I have no problem with motorcycle mechanics in general, only the ones who are foolish enough to work on an airplane.

There are a few things you can do to enhance your relationship with your real estate agent. One of them is to sign a Buyers Agency Agreement. I have taken and have seen material from other real estate gurus who say you should have as many real estate agents working for you as possible. Trust me, they don’t understand agency from a legal point of view, an ethical point of view or a business point of view. In this business you need real players on your team. A good real estate agent who really understands the rules of engagement when it comes to real estate investing is worth their weight in gold. You wouldn’t have multiple tax accountants prepare your taxes. You wouldn’t have multiple lenders making you the same loan. You wouldn’t have multiple closing companies working on the same file. So why would you have multiple real estate agents sending you properties from the same pool of properties? They all are pulling properties from the same database and they all have the same tools and access. Using multiple agents is only going to piss them off. They won’t stick around and they certainly won’t give you their best when they don’t have an exclusive agreement with you. Get real. If you were working for commission and a client was using multiple real estate agents how much energy would you put into that effort with little to no assurance of getting paid?

More importantly, you don’t want traditional real estate agents working for you anyway. You want an investor/agent who is themselves an investor and/or has a proven track record of helping other investors profitably grow their portfolios using the rules of engagement I teach when I show investors how to invest and real estate agents how to correctly work with investors.

The other important factor in using a buyer’s agency agreement is that the agreement affords you certain rights and requires the real estate agent to assume certain responsibilities that would otherwise not be in place and in the end be to your disadvantage.

Another important piece of information is having Proof of Funds. This tells your real estate agent you are qualified and it also gives your real estate agent leverage and power when working with other real estate agents. Proof of Funds can either be a bank statement showing you have the available cash to make a purchase or a lender pre-qualification, lender pre-approval for a loan or Line of Credit statement showing that you have funds ready for you to borrow.

Think Military. Think Sports. Think Family. Think Friends. Think profitable business. A good Real Agent is a critical member of your team. I strongly encourage you to treat them that way.

Well that ought to give you a little insight into the current state of affairs and what is expected of you and what you can expect from investors!

For more information please visit MyInvestmentServices.com, call 1-800-931-2605 or email Gary@WinRealtyAdvisors.com

Written by Gary Wilson, June 16, 2014

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

Real Estate Agents Who Serve Investors

Real Estate Agents who serve Investors

Real Estate Agents who Serve Investors

Preface

When I first began investing I became agitated at the Real Estate profession. The agents themselves were, for the most part, decent people. Just like in any walk of life there are good ones and there are bad ones and a lot in between. The problem was that they are all trained by their brokerage companies with material that is at least 95% focused on the owner occupant, not the investor.

Real Estate Agents are inherently driven to succeed and are sincere in their desire to help us. The challenge was that although they wanted to help me they didn’t know how. My neighbor was one of my first agents. I would explain to her what I needed and invariably she would call with properties that would not work as investments. For example, when Flipping for Profit (Read Flipping For Profit Without The Risk, visit MyInvestmentServices.com for your copy), one of the key metrics in investing is that the investor has to purchase a property for at least 30% below market value for the neighborhood in order to make money. That is bare minimum without any remodeling. The last straw for me when deciding to get my Real Estate license was the call I got with an urgent message about a house that was for sale for $95K and it worth $100K.

Realtors who don’t invest themselves don’t understand the rules of engagement for investors. For the most part they do understand the rules of engagement for owner occupants. I was in the business of investing not educating Real Estate Agents how to work with investors. As my business evolved I decided to share what I know with investors who want to become agents and vice versa. Want to learn more? Great. Let’s get started.

 

Introduction

I believe that investing in Real Estate is the best path to realizing the American Dream and I was fortunate enough to have a great teacher when I first got started at the ripe old age of 23. I eventually went on to get my real estate license but I only used it for myself. In fact I didn’t want other people to even know I had it!

When people would ask if could help them buy or sell a home I said “No”! Ha. I can laugh now.

As I progressed in my investing I was often invited to be a guest speaker at various Real Estate Education seminars. I was even on the radio a few times. That led me to teach others how to invest. The students I taught always asked if I could be their real estate agent. Once again, I would politely say “No”. I am notoriously stubborn.

After about the third class I decided I would be a nice guy and help two students from each class by representing them in the field. I wasn’t too excited about the money – yet! When I told twenty-five students I could only help two, I learned one of the fundamental laws of marketing – the law of scarcity. After I realized how much demand I created by making myself scarce, I decided to command a minimum commission from the investors I taught.

Something very important was happening while all of this was going on. I was creating a system for using my license as an income producing asset. My Bachelors Degree in Computer Science and eighteen years in Banking Systems and Operations was paying off big time. This system enabled me to keep on investing and at the same time break all kinds of records in Real Estate sales. One year, 2008, at the height of the great recession when ½ of all Real Estate agents got out of the business, I single handedly serviced one hundred and ten clients with no team or any assistant of any kind. In the middle of the worst economy in eighty years my Real Estate Agency business was growing while most others were dying. I promise that if you follow the suggestions in this blog that you too could be an “Investor/Agent – Making More Money, Not More Work!”

A little history about the author Gary Wilson:

Gary has been a Scout Master in troop 194 of the Greater Pittsburgh Region and involved in scouting for more than a dozen years as an adult and was a scout as a boy. He started investing in Real Estate at the age of 23, less than one year after graduating from Old Dominion University, accumulating a 250-unit portfolio while teaching others to do the same.

He ranked in the top 5% of all Realtors in the Western Pennsylvania market, according to annual Five-Star surveys. He is a licensed broker in Pennsylvania and Virginia. He achieved the Platinum level of service while launching and growing Win Realty Advisors, LLC which he merged with Keller Williams to create the KW Win Realty Team.

Gary merged specifically with Keller Williams because of its Core Values and priorities- God, Family then Business. In fact, no other Real Estate Company has as much in common with the Boy Scouts of America as KW. Gary currently teaches thousands and coaches hundreds of other investors who want to realize the pleasure of Rental Profits Without The Pain.

For more information on this please call me at 1-800-931-2605 or email Gary@WinReatyAdvisors.com. You can also learn more by visiting MyInvestmentServices.com.

The Goal

Financial Independence, Financial Freedom

Every one of us, including you, wants to be financially independent. You think you know what you want but deep down what you really need is to be financially free. This blog will give you yet another tool in your arsenal to achieve financial freedom and independence in less time. Let’s get started.

 

A Tale of Two Roles

Over the years I often thought I was the only investor who went on to get a real estate license. Every now and then I would come across someone who like me was an investor who, usually out of frustration, obtained their real estate license too. And just like me they really didn’t want other people knowing that they had it either. In fact, in almost all the investor courses I had taken and investor books I had read, the authors usually created the impression that it really wasn’t necessary for an investor to get a real estate license. Some of these real estate gurus were actually a little anti-real estate agent! In their eyes, real estate agents were very expendable and were simply another tool, and not even really necessary, so real estate agents could be used and not thought of once the investor got out of them what they wanted. No wonder so many investors struggle!

Ironically, I discovered that many of these gurus actually had their real estate license! The bottom is that investors rarely figure out how to find a great real estate agent who really knows what they’re doing when it comes to investing, and investors rarely make an effort to understand real estate agents and the role they can play as a valuable team player on the investor’s team. The primary role of the investor is to invest profitably. In order to do that he needs to run his investing empire as a business. And in order to do that successfully he needs highly valuable players on his investing team.

Real estate agents almost never invest. I have only found a few who started out as real estate agents and then got into real estate investing – I mean in a meaningful way. I have observed in almost every instance that agents who went on to invest invariably apply the rules of the owner occupied world of real estate to the investor world of real estate. It doesn’t work that way. Never has and never will. The two worlds have completely different sets of rules. I call these the rules of engagement.

I have also observed that most real estate agents really don’t want to work with investors. Real estate agents are taught to work primarily with owner occupants who want to buy or sell their own homes. They are rarely, if ever, taught how to work with investors. In fact, a lot of real estate brokers and experienced agents tell other agents not to work with investors because they waste your time. That’s because they simply don’t understand investors and the world of investing. They are trying to treat investors the same as they would treat an owner occupant. That doesn’t work. Everybody gets frustrated and everybody gives up because they think the other person stinks, or doesn’t listen, or doesn’t know what they’re doing.

I can tell you from first-hand experience that it can work. I have been doing it for a long time. I actually prefer working with investors because unlike most owner occupants they usually know what they’re doing. They are efficient and I get tons of repeat business from them. I don’t have to keep looking for more and more new customers. I have all the customers I can handle. There were times when I was actively practicing with my real estate license that I would have more than twenty contracts going at the same time. And remember, I had no help. And I was still investing myself and even managing several dozen of my own properties! I did it by understanding both roles of investing and real estate agency and I developed a system to make the most money with least amount of work!

 

What Comes First, The Chicken or the Egg?

I am often asked “Should I get my real estate license first before I start investing?” or “Should I state investing first before I get my real estate license?” I’m not a lawyer but I have learned to appreciate the stock lawyer answer to almost every question – it depends!

If you are young and just starting out or you are more experienced in life (i.e. – older) and starting over, you may need to generate cash flow like yesterday! If that is the case you likely don’t have cash saved away anywhere either. In this situation I suggest getting your license first. It’s quick and easy. You can then service the people you already know (your circle of friends, family, neighbors, etc.) other investors, and you can also participate in wholesaling. With wholesaling you control and profit from property without actually owning it. To learn more about wholesaling please read Wholesaling for Profit so Everybody Wins. You can find this on the MyInvestmentServices.com website. You can also call 800-931-2605 or email Beverly@winrealtyadvisors.com. Wholesaling is also a great way to grow your database of investors and future partners in larger real estate investment deals like apartment complexes, shopping centers and office buildings.

So, if you need cash flow and you don’t have cash saved you need to generate commissions asap and save some of those commissions!

If you have some savings and need cash flow then perhaps you should invest in a few rental properties first to generate some passive income. This will give you a more solid base from which to operate. You could also get your license at this time to generate some commission income as well. At the very least you get to earn commissions on your own deals.

If you are already investing I suggest getting your license asap. You are not claiming additional income that you should be claiming. As mentioned above, you can earn commissions on your own deals and if you locate more investment opportunities that you can’t take on at the moment you can present them to your clients and at least earn commissions. Of course you could wholesale them too by either doing a net listing (in some states) or a straight wholesale through an LLC where another agent does the work and you can earn a referral fee. These are a few opportunities that we will explore more lately.

If you are already a real estate agent I suggest you get in the investing game asap. I’m not suggesting that every real estate agent should invest but if you are a real estate agent the rest of the world looks at you and asks, “If you are an agent then why don’t you own a lot of investment property since you know so much?” How’s that for applying pressure?

A much better reason is that you will be able to leverage your real estate license and use it more as an income producing asset. Moreover, there is no other investment in the history of the human race that has had more impact on more people’s lives.  If you are a fully engaged real estate professional then you are by nature an entrepreneur. As an entrepreneur you should naturally gravitate towards real estate investing. If this does not describe you then I assume you view your use of your real estate license as a job instead of using your license fully as an income producing asset that is being run like a business.

The difference is that with the former, if you go away on an extended vacation and don’t work then your production will suffer. I know it will suffer because in addition to not being able to effectively service your clients you will probably not be lead-generating either.

In the latter case, when operating like a business, you will likely have someone executing your lead-generating activities for you and you will likely have team members who can continue to take listings and work with buyers. The bottom line is that if you are a true real estate professional then you really ought to be thinking like an entrepreneur and operating like a business.

OK. Back to the subject of this blog. Consider this. If you follow my model, you will create your own market serving both the supply and demand side. You will not be competing with 95% of other agents who only serve owner occupants who are competing for one-and-done owner occupant transactions. You will be building your own community of repeat business. It is a business that is easy to systematize. You will be more inclined to invest yourself correctly and thereby diversifying your income. You could go on to create your own brokerage business. You could go on to create your own property management business. Need I say more?

For more information visit MyInvestmentServices.com website. You can also call 800-931-2605 or email Beverly@winrealtyadvisors.com.

Written by Gary Wilson, June 6, 2014.

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

The Lighter Side of Rental Properties

A Little Humor

The lighter side of rental properties

The lighter side of rental properties

MyInvestmentServices.com

 

Not all human drama stories are bad.

Some can be a little funny. About one year after I bought 205 S Ohio, I got a call from the second floor tenant complaining about the first floor tenant. I learned to usually ignore the first call from one tenant about another. They usually work it out themselves and whenever I did get involved I usually regretted it. For the record I don’t recall ever regretting having ignored the first phone call from one tenant complaining about another one. Please keep in mind that what I am referring to here has to do with my own tenants.

Anyhow, the next day the second floor tenant called again to complain about the first floor tenant. He sounded a little more serious this time and said that other neighbors were upset and was considering calling the police. I thought I should gather a little Intel on the situation at that point. I called the second floor tenant back and got his voicemail. I left a message and decided to call the local police to see if there had been any complaints filed against my building or my tenants. I was informed that a few of the neighbors had in fact called to complain about the guy on the first floor hanging around in the nude. I assumed they meant that he was in his apartment and just happened to have the shades up so people could see inside. I thought no big deal but I also thought I should do a drive-by to see if it was a real problem and perhaps instruct the first floor tenant to close the blinds or put some clothes on.

Well wouldn’t you know that as I approached the building my first floor tenant just happened to be sitting outside on the front steps leading up to the front porch. Good, this makes it easy for me to strike up an easy conversation about a somewhat awkward subject. As I approached John it was obvious there was a bigger problem. John was buck naked outside on the front steps.

Ok now. Do I deserve this? Is this some kind of a joke? I didn’t sign up for dealing with middle-aged nude people who look like what they’re wearing – nothing – needs to be ironed. Baseball cap on and smoking a cigarette. I asked John what the H@#$ he was doing sitting out front with no clothes on so that everyone could see? He answered by telling me that he had a right to do as he pleased and if others were offended that was their problem and not his. He wasn’t doing anything to anybody.

I kept my cool and refrained from laughing. I explained to him that he was sitting on the front steps – the only way to get to the building – and that other than very obvious laws about public nudity some people were just downright disgusted. He was actually in the way of anyone from the second or third floor being able to get to their apartments without having to pass right by him, thus being privy to his privates!

He rebutted by saying that his privates were kept between his legs and with his knees drawn together no one could see anything. Now I was going from amused to disturbed. I actually had to tell John that even though he had his knees drawn together that by passers had absolutely no problem observing his family jewels from the side! Of course this had never occurred to John. I told him that regardless of what he thought, I was prepared to file for eviction if I received a third complaint or the local police fined me as the property owner due to nuisance complaints. I never heard anything more on the subject.

I love crazy people. I had one elderly lady, 80+, who refused to cooperate on anything at any time. I actually grew to like her over time but boy she sure drove me nuts. She used to climb this big maple tree in our front yard in order to trim branches that were growing too close to the porch roof. The neighbors used to cringe every time they saw this. I used to tell her every time I saw her not to do it because I would have to ask her to leave if she did it again. She just said “You’re not going to get rid of me young man. I pay my rent on time.”

Darn it, the old girl had me right where she wanted me. She didn’t have a computer and she didn’t even have a phone. Whenever she called she would go to a local pay phone and call from there and leave a message. Normally, she would write these encrypted letters that she put together from words she cut out of old magazines that she got for free. She would tape them all onto a scrap piece of paper. The sentences took the form of old Western Union telegrams – something like “rent enclosed. STOP tenants upstairs noisy. STOP, faucet leaking. STOP, thinking of kicking me out? STOP !”. I remember the first time I went to meet her and raise her rent. She met me at the door with her old lease from the old owner which I did inherit but was exercising my right to raise rents. Her copy of the lease form totally butchered with all of her own cut and pasted words from magazines. It looked like a grade schooler’s project gone bad. The really funny thing is that her former landlord, the lady who I bought the house from, was an attorney. The tenant, Alex had simply worn her down with her incessant bantering about what the lawyer could and couldn’t do and the previous owner just gave up. Alex’s deceased husband was a professor at Carnegie Mellon and Alex herself was a very learned person. Alex’s husband may have been very smart academically, but he left Alex penniless. She had all of her worldly possessions, a whole household full, crammed into her apartment. By the way, I did not get my rent raise. Alex was “having none of that young man”, and I went away with my tail tucked between my legs. Before you judge me I must tell you that the next time I went to raise rent were with a pretty young lady named Dawn. I flirted with Dawn and Dawn flirted with me and I got my rent raise without any argument at all. Eat your heart out, guys.

I decided to finish this little blog with stories to leave you in a state of wonderment. I want you to assess who you are and where you are right now. Is what you are doing aligned with God’s intention for your life? Oh, it has nothing to do with what you do. It has everything to do with how you do it and more importantly, why you do it. I suggest looking at you in the mirror and asking some deep probing questions. Can you serve your fellow man in the activities you are currently engaged in?

As a result of my investing in Real Estate I have built a successful Real Estate Brokerage Company named Win Realty Advisors. I have built a successful Property Management Company named Win Rental Management. I have built a Title Company named Win Settlement Services. Through it all and as a result of my business ventures, I have started and shared in more friendships than I can count. I seek to serve first before being served and as a result I believe I am one of the most fortunate men in the world. As the Famous Zig Ziglar taught us, “Help as many people as you can to get what they want and as a result you will get plenty of what you want.”

I hope you can see now, after reading this, that you can do many things to improve your odds of experiencing the pleasure of profiting without pain from your rental properties. I will tell you that if this book puts a little fear or anxiety in you then remember you can do what I eventually did and turn the daily responsibilities over to a professional property manager. In fact I created my own property management company and started offering property management services to other investors just like you and me. I named it Win Rental Management because, with the policies and procedures I developed resulting in more deposits and more rents collected and reduced expenses, everybody wins.

For more information on this and more direct help in your effort to experience the pleasure of Rental Profits Without The Pain, please call me at 1-800-931-2605 or email Gary@WinReatyAdvisors.com. You can also learn more by visiting MyInvestmentServices.com and look for Rental Profits Without The Pain.

May God bless you, your family and friends and your business ventures in peace and prosperity?

Sincerely, Gary P. Wilson

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

 

 

 

 

Wholesaling Explained for Investors and Real Estate Agents with Examples

For investors and real estate agents
For investors and real estate agents

Real Estate Wholesaling

Getting Started

MyInvestmentServices.com

What is wholesaling? The short answer is that you can get a property under contract and then sell the contract to another buyer. Here is a brief explanation in practical terms. Assume the owner of a property is Party A. Another person, Party B, makes an offer on that property. Party A and Party B come to terms and execute a legally binding contract for the sale of that property. So far so good! Party B does not intend to actually buy the property. He would like to profit from his efforts in identifying a good deal so he, Party B, sells the contract he has to Party C. He does this for a fee. In other words Party B charges a wholesale fee to Party C in exchange for Party C purchasing the rights of the buyer in the sales agreement to buy the property from Party A. Party C actually follows through and buys the property from Party A. Graphically this looks like:

A -> B = original sales agreement

B -> C = Wholesale Deal

A -> C = C buys property from A

Here are two examples of wholesale deals I was involved in. In the first example I was Party B. In the second example I was Party C.

 Smithton Avenue

Smithton Avenue was my first experience wholesaling properties. It was almost accidental the way it came about. I was out looking for properties for myself. As usual I had found more than I could take on and was dreading the thought of deciding which one to turn loose when I got a call from one of my fellow investors who had a friend looking for an investment in my neck of the woods. This other person was a dentist and didn’t have a lot of discretionary time to spend looking for investments. I was literally standing in the very property I was to eventually wholesale to this other investor. I had gone back to go over my notes and reassure myself that of all the good deals I had this was the one I could most easily let go of and miss the least. I knew what wholesaling was at the time I just simply hadn’t done one yet. I wanted to buy every property I had determined to be a good deal. Sound familiar?

Right after I hung up the phone with my friend the dentist called me. We struck a deal right there on the spot. So, I got the property under control with my own offer. My offer had an assignment clause in it so I could assign the contract to someone else. And that’s what I did. I assigned the contract to the dentist and asked for and received a $2,500.00 fee. It was truly as simple as that. I had to do almost no work to strike that deal. $2,500.00 may not seem like a lot of money but keep in mind that at the time I knew nothing about wholesaling. I had not yet been in a wholesale transaction. I did no advertising. The end buyer landed in my lap. All I did was locate the property and do the financial analysis on it to determine it was a good deal. I certainly should have asked for a larger fee but I didn’t know any better. I thought I was doing pretty good by getting $2,500.00 for doing almost nothing.

I never even had to go to a closing for this one. The end buyer (C) bought directly from the seller (A) and sent the check for $2,500.00 directly to me in the mail!

There a few lessons in here that we will expand upon further but first I want to give you an example of another wholesale deal where I was on the other end.

1304 Superior

1304 Superior came across my radar screen at a time when I was investing quite heavily. It was located in a part of town I was not completely familiar with yet but it was in my sights as an area to explore for future investing. The way it came to me was through another fellow investor who had his real estate license with the same brokerage company. He and his brother (who happened to be running for city council at the time) were well known local investors. They had come across an estate sale that involved multiple properties. They only wanted and could afford two of the three properties being sold as part of the estate. They had all three properties under contract as a package deal. They called me because they had heard I was an active investor in the area.

This third property was actually pretty nice. It was completely sided with all the trim wrapped in aluminum. It sat on a large corner double lot. It had a great front porch and new windows. In other words it had great curb appeal. The inside had all the original hardwood floors, crown molding, chair rails, and hand rails. Even though it didn’t have separate gas, and it was being used a single family home, it did have separate electric and could easily be setup as a two unit. And that’s exactly what I did.

I asked the other investors what they wanted for the property. They wanted only $16,000.00. It took me exactly .001 second to accept their terms. I spent another $16,000.00 splitting and renovating the property. When I was all done I refinanced it at 80% loan to value on a $75,000.00 appraisal.

You do the math. As you can see I made $60,000.00 cash on a $32,000.00 purchase plus rehab. That’s a $28,000.00 cash gain plus another $15,000.00 in equity all because I bought a property wholesale for $16,000.00.

In other words, I more than doubled my money PLUS I had $1,200.00 per month in rent coming in.

We actually did the entire transaction at the closing table at one time. In other words: A -> B, B -> C, and A -> C all occurred in one sitting involving the seller (A), the wholesaler (B), and me the end buyer (C). Wholesaling has served me well in my investing.

All of you reading this can experience these same kinds of stories. My hope and wish and prayer for you is that you do. Please read on.

Why It Works

Wholesaling works because of two important factors. 1. Some people have available time but not available money and 2. Some people have available money but not available time. Everyone fits in one of these two categories. There are exceptions. Some people have available time and money. Your goal is to be one of these people!

If you are in category 1 (Party B) then you can serve those in category 2 (Party C). 

How It Works

If you have a short term memory then make sure you implant permanently what I am about to tell you. The way wholesaling works (in fact, the only way it can work) so that everybody wins, is that you, as the wholesaler (Party B) must find your buyers first! That’s right. You first market, advertise, and capture and nurture a growing list of people who are interested in finding great real estate deals, whether they be flips or rentals, and have the money but don’t have the time to do it. Then and only then do you go out and find great real estate deals and get them under contract. Nothing could be more damaging to your reputation than getting properties under contract than not being able to sell the contract or follow through on the purchase of the property.

Those who teach that it is easy to get out of a contract if you can’t sell it (so it is not something to be overly concerned about), are damaging to the world of investing and wholesaling in particular. This implies a lack of proper execution of the principles and if you have to break a contract then you violate the principle of “Everybody Wins”. In this case the sellers (Party A) lose. And you lose too because you will develop a reputation of someone NOT to deal with. Don’t fall into this trap. Follow the easy, simple processes I teach here and you will profit so that everybody wins! All you are doing is filling orders. Part of nurturing your buyer clients is asking them questions, listening to their answers and understanding what types of properties they want. Then you go out and find those properties, get them under contract and sell the contract to your buyer.

Wholesaling Business Structure

Note: I am not a lawyer. I recommend that you seek the advice of a competent lawyer when deciding on which entity to use when growing your real estate empire.

When it comes to wholesaling you have to beware of the rules and regulations regarding the transfer of real estate, and for the subject of this book, specifically those rules and regulations dealing with the subject of wholesaling.

 Net Listing

In certain states, like Pennsylvania, if you are a licensed real estate agent, you can use the existing real estate rules and regulations in your state to participate in wholesaling. The way this works is that if you area a licensed real estate agent you can play the role of Party (B) from within the context of serving as a real estate agent to Party (A). This is how it works. Assuming you are a licensed real estate agent and you are also an investor you (B) can approach the seller (A) with the concept that you will list their property for sale under the following conditions: 1. The seller determines what final sale price they would like to see, 2. You enter into a listing contract for that price, 3. You agree that your compensation will be any amount of money that is over and above the final sales price that the seller is looking for, you list the house for a price that you believe it could actually sell for.

Here is an example: Seller (A) wants $100,000.00 for the sale of his house. You agent/investor (B) enter into as listing agreement that will net the seller $100,000.00. You advertise the house for $125,000.000. You sell the house for $120,000.00. The seller gets $100,000.00 and you get $20,000.00 as your commission on selling the house. If you are a savvy agent/investor and the buyer of this house is going to remodel this house and sell it for profit (Flip) you will propose that when he buys the house from your seller that he also agrees to sell it with you as his agent when the remodeling is complete and the house is ready for resale.

I’m sure you can see the tremendous potential in this if you are a licensed agent in a state that recognizes net listings. If you are licensed agent in a state that does not recognize net listings or you simply are not a licensed real estate agent then I recommend you set up a LLC to conduct your wholesaling business.

For more information or to learn more about wholesaling, flipping or rentals please visit MyInvestmentServices.com, call 1-800-931-2605 or email Beverly@WinRealtyAdvisors.com

Written by Gary P. Wilson, June 2, 2014

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

Want an Easy Way to Start Investing in Real Estate?

Want an easy way top start investing in real estate?
Want an easy way to start investing in real estate?

Getting Started

Not sure where to begin or even if you have or need money? Try Wholesaling! Visit www.MyInvestmentServices.com after you read this to learn more.

What is wholesaling? The short answer is that you can get a property under contract and then sell the contract to another buyer. Here is a brief explanation in practical terms. Assume the owner of a property is Party A. Another person, Party B, makes an offer on that property. Party A and Party B come to terms and execute a legally binding contract for the sale of that property. So far so good! Party B does not intend to actually buy the property. He would like to profit from his efforts in identifying a good deal so he, Party B, sells the contract he has to Party C. He does this for a fee. In other words Party B charges a wholesale fee to Party C in exchange for Party C purchasing the rights of the buyer in the sales agreement to buy the property form Party A. Party C actually follows through and buys the property from Party A. Graphically this looks like:

A -> B = original sales agreement

B -> C = Wholesale Deal

A -> C = C buys property from A

Here are two examples of wholesale deals I was involved in. In the first example I was Party B. In the second example I was Party C.

 Smithton Avenue

Smithton Avenue was my first experience wholesaling properties. It was almost accidental the way it came about. I was out looking for properties for myself. As usual I had found more than I could take on and was dreading the thought of deciding which one to turn loose when I got a call from one of my fellow investors who had a friend looking for an investment in my neck of the woods. This other person was a dentist and didn’t have a lot of discretionary time to spend looking for investments. I was literally standing in the very property I was to eventually wholesale to this other investor. I had gone back to go over my notes and reassure myself that of all the good deals I had this was the one I could most easily let go of and miss the least. I knew what wholesaling was at the time I just simply hadn’t done one yet. I wanted to buy every property I had determined to be a good deal. Sound familiar?

Right after I hung up the phone with my friend the dentist called me. We struck a deal right there on the spot. So, I got the property under control with my own offer. My offer had an assignment clause in it so I could assign the contract to someone else. And that’s what I did. I assigned the contract to the dentist and asked for and received a $2,500.00 fee. It was truly as simple as that. I had to do almost no work to strike that deal. $2,500.00 may not seem like a lot of money but keep in mind that at the time I knew nothing about wholesaling. I had not yet been in a wholesale transaction. I did no advertising. The end buyer landed in my lap. All I did was locate the property and do the financial analysis on it to determine it was a good deal. I certainly should have asked for a larger fee but I didn’t know any better. I thought I was doing pretty good by getting $2,500.00 for doing almost nothing.

I never even had to go to a closing for this one. The end buyer (C) bought directly from the seller (A) and sent the check for $2,500.00 directly to me in the mail!

There a few lessons in here that we will expand upon further but first I want to give you an example of another wholesale deal where I was on the other end.

1304 Superior

1304 Superior came across my radar screen at a time when I was investing quite heavily. It was located in a part of town I was not completely familiar with yet but it was in my sights as an area to explore for future investing. The way it came to me was through another fellow investor who had his real estate license with the same brokerage company. He and his brother (who happened to be running for city council at the time) were well known local investors. They had come across an estate sale that involved multiple properties. They only wanted and could afford two of the three properties that were being sold as part of the estate. They had all three properties under contract as a package deal. They called me because they had heard I was an active investor in the area.

This third property was actually pretty nice. It was completely sided with all the trim wrapped in aluminum. It sat on a large corner double lot. It had a great front porch and new windows. In other words it had great curb appeal. The inside had all the original hardwood floors, crown molding, chair rails, and hand rails. Even though it didn’t have separate gas, and it was being used a single family home, it did have separate electric and could easily be setup as a two unit. And that’s exactly what I did.

I asked the other investors what they wanted for the property. They wanted only $16,000.00. It took me exactly .001 second to accept their terms. I spent another $16,000.00 splitting and renovating the property. When I was all done I refinanced it at 80% loan to value on a $75,000.00 appraisal. You do the math. As you can see I made $60,000.00 cash on $32,000.00 purchase plus rehab. That’s a $28,000.00 cash gain plus another $15,000.00 in equity all because I bought a property wholesale for $16,000.00. In other words, I more than doubled my money PLUS I had $1,200.00 per month in rent coming in.

We actually did the entire transaction at the closing table at one time. In other words: A -> B, B -> C, and A -> C all occurred in one sitting involving the seller (A), the wholesaler (B), and me the end buyer (C). Wholesaling has served me well in my investing.

For more information please visit MyInvestmentServices.com, call 1-800-931-2605 or email Beverly@WinRealtyAdvisors.com.

Written by Gary Wilson, May 28, 2014

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”