Real Estate Investing Blog - DiscountedProperties.com

You may be familiar with the term “wholesale real estate,” which is used to describe distressed properties that are bought, rehabbed and then sold. However, what exactly is wholesale real estate, and how can you find these properties?

Wholesale Real Estate 101

Wholesale real estate is a general term used to define real estate that is owned by motivated sellers looking to unload their properties. A wholesale property may need extensive repairs, may have a notice of default, or may be REO or bank-owned.

Examples of wholesale property include:

* The homeowner misses several mortgage payments and wants to sell quickly before the bank sends him a notice of default.

* The property is in a state of disrepair, and the seller wants to move without performing any of the repairs.

* The homeowner is motivated to sell because of a move or job transfer.

As a real estate wholesaler, your job would be to locate these wholesale properties via various networking tools. If you want to wholesale real estate, you will likely need to become involved in real estate investing clubs and online sources, just to name a few.

Wholesale real estate may provide a great opportunity for many investors in today’s tough housing market, provided they have a good working knowledge of real estate laws, trends and finances, and can successfully market and sell wholesale property.

Important Elements of Wholesale Real Estate to Understand

However, before you can successfully find, purchase, and sell wholesale property, it is important to keep the following in mind:

* You will need to understand the local and regional markets and be willing to spend the time searching for properties with motivated or distressed sellers.

* You will need to be able to negotiate deals with sellers that are looking to move quickly but still want a fair price for their home.

* You will want to assemble a list of investors willing to purchase wholesale property from you (there are many investors interested in purchasing wholesale real estate but do not want to take the time looking for the properties – this may prove to be very lucrative to you!).

* You will want to network and work together with other wholesalers. This is often the key to wholesaling real estate, as the larger the network of buyers and sellers, the better off you will be when it comes time to selling your wholesale property.

Now may be the ideal time to take advantage of the wholesale real estate market. It is important, however, to educate yourself on how to wholesale property before embarking upon this real estate investing journey.

Bank-owned homes, also known as real-estate-owned or REO properties, are homes which are owned by banks as a result of the foreclosure process. With the glum state of the nation’s real estate market, there are certainly plenty of opportunities for both investors and homeowners seeking REO properties.

Because most lenders have far too many of these REO properties on their books, they are anxious to sell them, often for below fair market value. Bank owned homes could be a prime opportunity for both investors and homeowners, so it is up to you to educate yourself on the many facets of REO properties!

What is the Difference between REO Properties and Foreclosures?

REO properties are properties that are returned to the lender if a foreclosure auction is unsuccessful. If the property does not sell for what is owed to the lender at the foreclosure auction, the property is then returned to the bank, where it becomes a bank-owned property.
A lender will seek to sell the bank owned property to recover their expenses after it is returned to them, including the unpaid loan amount. The lender will also clear the title and perform any necessary repairs before selling the home.

Are Bank-Owned Homes a Good Investment?

Many buyers assume that REO properties are great values, and therefore get caught up in a bidding war and end up paying too much. Take into consideration the condition of the home and the home values of the neighborhood before bidding on bank-owned properties.
How do you Purchase REO Properties?

Bank-owned properties are sold in a similar manner as traditional homes, except that you are making an offer to a bank, not a home seller. Once again, keep in mind that you won’t usually get a “steal” when it comes to REO properties, as the bank is looking to recoup its expenses and the home’s unpaid loan amount.

Many banks have REO departments that handle bank-owned homes. Once you have submitted an offer to the bank, they will likely submit a counter offer. Your final offer will likely be reviewed and approved by several members of the REO department.

Can I Negotiate Home Repairs with the Lender?

Most lenders look to sell bank-owned homes “as-is.” In other words, you will likely have very little room to negotiate repair costs with the lender. However, most lenders will allow you to have inspections on REO properties so you know what repair costs you may face.

It is therefore important to stipulate in the offer that you have the option of cancelling the contract if you find extensive repair costs that the bank won’t cover.

Bank owned homes can be an excellent investment, especially if you purchase one that does not require extensive repairs. However, make sure you analyze bank owned homes as you would any other property – with rationality and practicality.

Don’t let the stagnant housing market stop you from considering real estate investing. By incorporating timeless real estate investing secrets, there is always money to be made in the real estate market.

Real estate investing secrets are tried and true rules by which the most successful real estate investors live. It is possible to invest in real estate in today’s market, and it is certainly possible to make money in today’s real estate market; you simply must do your homework, incorporate real estate investing secrets, and educate yourself on the process before jumping in with both feet.

Top Ten Real Estate Investing Secrets:

1. Watch the market and pay attention to trends and shifts. Real estate investing secrets do not focus on knowing what others do not. Instead, it’s simply about paying attention to the changes in the real estate market and becoming aware of what the changes mean. The most successful real estate investors constantly have a realistic pulse on the market’s supply and demand trends.

2. Don’t rely on your real estate agent’s research alone. Use the available public records and real estate transactions to scope out potential properties and determine their value based on other similar properties in the neighborhood. Your own judgment as an investor is invaluable. The most successful investors will admit that their real estate investing secrets focus on trusting their own sensibilities.

3. Don’t underestimate the power of being straightforward with home sellers. Many home sellers in today’s tough housing market are simply looking to get out from under their home debt. Instead of dancing around offers and counter offers, simply ask the sellers what they need to walk away from the property.

4. Understand the difference between investing and gambling. There is always a risk when it comes to real estate investing, but decisions should be based on solid evidence, research and trends, not on a guess that property values will continue to rise or rebound in the near future.

5. Don’t consider real estate investing until you first purchase your own home. There is no better education regarding real estate investing secrets than owning a home. Owning your home will give you a crash course on the sheer cost of maintaining a home, and how changing market conditions can affect the value of your home.

6. Obtain an education on real estate investing. Don’t assume you know already the ins and outs of real estate investing secrets and fundamentals. Take a course, read the books and talk to other individuals who have been successful in the real estate investing market. Your best real estate investing secrets are often found by talking to others in the industry!

7. Learn about your particular investment market. Every single market has its own dynamics. Don’t assume that because a nearby market is thriving that your market is too. There are countless variables to consider when determining if your market is viable for real estate investing, and looking at other markets isn’t one of them. One of the most powerful real estate investing secrets is focusing on your own niche market and becoming an absolute specialist in your area.

8. Don’t act before you are ready. Many real estate investors worry so much about passing up a good opportunity that they move forward without first understanding the risks involved with the purchase. One of the most practical real estate investing secrets is to not allow the excitement of other buyers and bidders prompt you to make a rash, quick decision that is not carefully analyzed.

9. Remain educated about real estate tax laws and how they will affect you. If you don’t feel like you have the time to stay on top of the tax law changes, then it is probably a wise decision to hire a tax law attorney.

10. Don’t ever overlook the importance of common sense. Don’t let the trends dictate your decisions when it comes to real estate investing. Instead, your common sense should always be your guide.

The most important theme amongst all real estate investing secrets is that you must remain level-headed and practical at all times. Greed and excitement should never play a role in your decisions; rather, cold hard facts and your rational intuition should guide your judgment regarding a good real estate investing decision.

Good luck!

Because of the national real estate crisis, there has never been a better time than now to dive into the wonderful world of wholesale real estate investing, especially if you want to secure your financial future without actually taking title to property and dealing with late night calls from tenants or putting up with other property management nightmares.

In case you’re not familiar with the process, you simply need to locate a motivated seller, negotiate a sales price for the property, and place it under contract. Instead of closing on the sale yourself, you assign – or sell – your right to purchase the property to an interested real estate investor or retail buyer. By utilizing this wholesale real estate investing technique, you can pocket the difference between what you would have paid for the property and the amount you’re able to get another buyer to pay.

The wholesale real estate market is larger than you might think because millions of homeowners are stuck in homes they can’t afford. Rather than go through the foreclosure process and suffer the pain and embarrassment of being forced from their homes, many homeowners are motivated to sell before their lender takes action.

A good way of ensuring that you can assign a wholesale real estate contract before you sign on the dotted line is by lining up a few real estate investors that are interested in buying wholesale real estate. They’ll gladly tell you the types of properties that they are seeking – and how large a profit they want to make on each deal. Then all you’ll need to do is find properties that meet their parameters. You can use the money you earn from wholesale real estate investing to supplement your income, build your business, or provide additional funds for your own investing activities.

If you are looking to get into investing in real estate there are many places you can go to find assistance with your endeavors.  Finding places to go for real estate investment resources will be crucial in starting the process.  There are actually many real estate investment resources available to you in a variety of areas.  Because real estate investing is on the rise, many people are capitalizing on the trend and getting into it.  There are websites and blogs like ours, books, clubs, magazines and networking opportunities for real estate investment resources.

Blogs and forums dedicated to investing are some of the best real estate investment resources available today. These are real people giving valuable advice often for free. There are also websites devoted to real estate investments that will give you a variety of additional websites on more specific topics. Likewise, if you are looking for one particular aspect of investing there are plenty of real estate investment resources on the Internet.  For example, there are many resources on the Internet that deal strictly with house valuation like zillow.com. Similarly, there are lots of them on the Internet that deal strictly with funding like bankrate.com.  You will be sure to find answers to your questions regarding investing if you use your favorite search engine to find the particular topic you need. Get some real estate investment resources in our learning center.

Books and magazines are another popular place to find real estate investment resources. Check your local bookstore, half price store or library to find them. Similarly to the Internet sites, you can find them on general topics that give an overview of the various market conditions, or you can get as specific as you want. Look through the reference sections of the bookstores to find niche real estate investment resources and read as much as you can get your hands on.

Networking is another invaluable source of real estate investment resources. Finding others in your area who do investing will give you a wealth of information.  There are clubs that have formed all over the country with the idea to share their real estate investment resources and ideas. These clubs meet regularly and trade tips and ideas with one another. You can also look around at local real estate offices and try to network in those places. Finding real estate investment resources will be an easy task if you just know where to look. You can find new resources just by talking to some people in the market, by buying books and magazines or by looking on the Internet for websites devoted to real estate investment resources.

Right now the sky’s the limit and there’s never been a better time to get involved with real estate investing so seek out the resources you need to get your hands wet and start investing today!

What is a property investment club? It is a group of people who come together in order to make money by pooling resources to purchase properties or to network among one another to assist each other with individual property investments. Theoretically, the profits from the property investment club are split between its members when it is used for group purchases. That all sounds great and might seem like the perfect way to get started in real estate investing but not all is always so wonderful. There are some great property investment club founders out there who are doing precisely as it is intended. However, there are also some more shady founders of a property investment club whose entire goal is to separate you from your money. The founder or founders are definitely making a profit, but are you?

As with any type of investment it is advisable to know the risks and research thoroughly and a property investment club is no exception. There are good ones and bad ones. Before joining a property investment club, understand the specifics regarding membership. Here are the top ten questions to ask the potential property investment club:

1. How are members screened or is anyone accepted?

2. Is there a fee to join?

3. What is the minimum investment I have to have?

4. How are properties evaluated and decided upon?

5. Is there networking opportunities within the property investment club?

6. What are the qualifications and experience of the decision makers or board of the property investment club?

7. Aside from real estate are there other streams of income that are generated from the property investment club such as books or videos targeted to members or the general public?

8. What is the success rate of the property investment club and how much does each member make on average?

9. How long have you been in business and what is the structure of the property investment club?

10. How do I leave the property investment club if I so desire?

If all your questions are answered satisfactorily and you think you can benefit from joining the property investment club, then it probably is a good deal. But be wary of high investment requirements as there are typically no guarantees for a return on investment. Also be wary of networking clubs that charge a high annual membership fee. You may be able to get some contacts and go to a few classes but is it really worth it?

Before joining a property investment club, investigate your options for making money in real estate on your own. Consider networking opportunities that don’t require annual memberships. Consider seminars and classes I your area that are paid on a per occurrence basis. A good property investment club can be a valuable source of information and can help you make a profit while getting your feet wet. However, the scammers are also out there so make sure you do your homework before committing to anything!

For those of you who are thinking about getting into real estate investing, you are in for an exciting time! You also may very well be in for a making a pretty good profit if you know what you are doing. Real estate investing can be really lucrative but you need to know how to maximize your profits. For some tips for investing real estate money, people who have experience will give you good advice.

Never underestimate the value of networking with your peers in the industry. Networking for tips for investing real estate money is a great idea. Also, do research on the Internet and in local real estate magazines for tips for investing real estate money and use your common sense above all!

To get you started, though, here are the top five tips for investing real estate you should pay attention to if you want to be successful…and who doesn’t want to be successful?

1. Do your homework. You have to be familiar with your industry to make a profit from it. Understand the various options for real estate investing including flipping houses, wholesaling, fixer upper homes, rentals and commercial spaces.

2. Make sure you know your area and the prices associated with your particular transaction. For example, know rental prices, current market conditions, repair costs, etc. depending on the type of investment you are considering.

3. Don’t get emotional. This is a business opportunity and a financial investment. Don’t get too caught up in the process or invested in a particular house for emotional reasons. There are always other houses. Know when to walk away when it won’t be lucrative enough.

4. Understand various financing options. Some financing options are better than others and some are better suited to different situations. Understand the ins and outs of mortgage loans, IRA investments and hard money loans to determine which option is best for you.

5. Secure your financing first. You don’t want to find the perfect house and then have financing fall through. Get pre approved for loans or have our financing options readily available to you when it is time to act.

Those are the top five tips for investing real estate but there are certainly many others. A lot of the tips for investing real estate will come to you as you gain experience in the investment game. If you prefer a particular investment niche the tips for investing real estate can become much more specific also. You will need to be familiar with all the aspects of investing from finding the house, to securing the sale to advertising and selling or renting in order to maximize your earning potential. However, once you start researching and getting some experience, you will have all the tips for investing real estate you will need to make a successful venture.