Getting yourself established as a real estate investor can be difficult. If the market you’re working in doesn’t seem to have inventory or the prices in the market aren’t suitable for investors, you may have to consider using other people to help you build or sustain your business. But how do you go about working with others to build your investment business?
Real Estate wholesalers are people who find deals on properties but aren’t interested in employing contractors and working with all the people it takes to get the deal across the finish line. A real estate wholesaler may enter into a contract on a home for $96,000 but are then willing to sell you the contract for $4,000. At that point, they’ve already made a $4,000 dollar profit and you’ve only invested $100,000 into the property, so you’re both winning.
Wholesalers are always looking for people to add to their list of cash buyers, so reach out to investors in your area. If you don’t know any personally, start checking out your local association of Real Estate Investors to make some contacts. Get your name on their cash buyer list and they’ll be contacting you soon.
The world’s most popular search engine can even be used for your new investment business. Simply Google “Sell My Home Cash” and the name of your city and there should be a host of names that come up on the results. Go through at least the first 20 pages and write down the name of every person who comes up as a point person for cash deals. Start calling and e-mailing these people to get your name on their cash buyer list.
Realtors are trained and licensed to work with buyers and sellers, even if you’re not looking for a home to live in. Find a realtor in your area who specializes in investment deals and set up a lunch meeting. Carefully explain everything that you look for in a property and see what they can find. As a buyer, working with a Realtor is a no-risk proposition. Buyer’s don’t pay Realtors, as they receive a portion of the commission from the selling side of the transaction. Having a Realtor working with you is essentially like having a free assistant who can find a property for you and can get the paperwork in order. It will save you plenty of time without costing you any money.
There are three means of partnering in real estate investing. Partnering up, equal partnerships or partnering down.
Partnering up is great for beginners, especially if you can begin working with someone who is dominating your local market. This will give you a good look at how someone who is already successful does their deals and will let you learn their methodology.
Equal partnerships are based in you splitting the work and the profits with someone else. Not only do you share the work, you also get to share the cost. Find someone who is as interested in real estate investing as you and find a way to play to each of your strengths.
Partnering down is another good way to save time, especially if you’re already successful in this line of investment. Find someone who is just getting into the field of real estate investing and agree to teach them how things work in exchange for them doing the “grunt work.” They can knock on doors and send out letters and will give you the information they obtain.
If you’re going to be a professional real estate investor, you need to let everyone know that you’re in this line of work. Get a professional-grade business card made, and on the back briefly explain your referral system. Pass these cards out to your friends, neighbors and at events and see how many people are happy to give you an address in exchange for cash if the deal closes.
While real estate investing can be difficult, if you learn how to properly utilize the people around you, you’ll be in a much better position to succeed. For comments or questions, please feel free to contact Chris Graeve directly.