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There are plenty of pluses in your favor as a wholesaling investor. The economy is slow, houses have glutted the market and people need to sell. You’ll be able to take advantage of all of these potential sales with a good buyers list, some legwork and a few house flipping basics.

Beyond your time and effort there are a few little salesman tips you can use to ensure that the homeowner sells with you or that the buyer wants your deal.

Closing with the Buyer or the Homeowner

As with any real estate investment, you’ll need to close the deal. This can mean convincing the homeowner’s to sign with you or convincing the buyer of what a really great property you’ve got. Here are a few quick house flipping tips and sales methods you can use to help close that deal.

Empathy Closing:

This is a great closing method to practice with homeowners. You discuss the homeowner’s situation with them and try to develop some empathy. Perhaps this house they are selling cheap is an inheritance from a relative that recently died. Almost everyone has lost a relative and you’ll be able to understand what they are going through and develop that needed connection with the homeowner.

Order Form Closing:

Sometimes the buyer or homeowner you are talking with may be hesitant to start filling out paper work. You can turn over the form to the homeowner or buyer and just have them fill in a few spaces, like their name or address. You can say that you’ll fill out the rest of the information for them. Then during the course of the conversation just ask them those pertinent bits of information and fill in the form as you go.

Not For You Closing:

This is a great closing method to use on buyers. You’ll create competitive feelings by letting the buyer know that you’ve got a few other buyers lined up who would be interested in the property. You can also begin to commiserate with the buyer if they start coming up with reasons that they can’t buy right now. Say something like, ‘Oh you’re right, you probably wouldn’t want to invest in this area of the state. It is out of the way, but I just had such a fantastic offer on the property it’s going to go fast,’ or ‘I understand you’ve got too many houses at the moment, this deal may suit another buyer.’

Staging the House

Apart from getting the contracts and documents signed, you’ll have stage the house for a house flip. This isn’t necessary for those wholesaling houses, but those looking to house flip will need to show the property to buyers who are more interested in living in the house, than using it as an investment.

• Purchase Surplus and Discount Appliances for the House

You’ll make the house more attractive to buyers if it already comes with its own appliances. They don’t have to be brand new, they just have to work.

House Flipping Tip: Most homeowners prefer electric appliances these days to cut down on gas costs.

• Use interesting but neutral colors

Buyers won’t want to move into a home with the same old white washed walls and brown carpeting that they’ve seen every where else. Plus, it’s more work for them to have to repaint walls they can’t stand looking at. Pick out different colors for your walls, but keep them neutral so they also won’t crowd the senses of people looking at your home.

House Flipping Tip: Pale tans warm a room making it cozy; while pastel blues and greens cool a room, making it seem larger.

• Less is more when flipping houses

A big mistake real estate investors make when staging a house is going overboard with decoration and furniture. An already vacant property needs just a little staging because the buyer wants to visualize how the home will look when they move their stuff into it. A table here, a chair there, some flowers and some curtains is all you really need.

House Flipping Tip: Limit the amount of time you take staging an empty house.

Some wholesaling deals will be so easy it just seems to fall into your lap. However, most deals require a little work and access to a few great secrets. That’s why it’s a great idea to learn some of these little Salesmanship tricks for really hooking those buyers and sellers.

Real estate wholesaling is all about closing the deal. You may spend a lot of time looking for a house to flip or you may spend very little. You may keep a house flipping guide by your side at all times, but when it comes down to closing the deal, you need to be a good seller.

There are plenty of way to close a wholesale deal or flip a house, but what catches the real estate investor off guard are the little mistakes or sometimes big mistakes that make people nervous about a sale. Beware of falling into these traps!

Bragging Rights:

They say a first impression is very important and that is especially true of the first meeting with your homeowners. The goal of this meeting is to get them under contract with you to sell the house. During that meeting you want to be polite and professional. That doesn’t mean bragging about the hundreds of deals you may or may not have completed already.

House Flipping Tip: Coming off too slick when meeting with a buyer or the homeowners before any contracts are signed can cause you to lose that contract.

Greed:

This is an especially problematic trait for house flippers. There is a tendency to want to bring in just one big sell through house flipping a property. This desire for a large cash payoff can cause the investor to lose the chance to make any sale on the property. An asking price that is too high will be out of reach or unattractive for potential homebuyers.

House Flipping Tip: Take the first good offer that is made on your real estate wholesale or house flip.

Impulsiveness:

Your best chances for making a profit in real estate wholesaling is to create a process and perform due diligence before signing anything. Some investors just want to jump right in on a house flip or wholesale. So, they sign that contract before figuring out if they can really make a profit on their investment of time and money. Take a little time to calculate the market value of the property you are interested in compared to the price the homeowners are asking. Then, you’ll know what you can offer the homeowners and what you can ask in finder’s fees from the buyer on a wholesale.

House Flipping Tip: Perform Due Diligence and develop a plan for your house flip before signing.

Real Estate Pitfalls

You can also fail to close a wholesaling deal through some common pitfalls that crop up. The failure to make a closing can be very damaging to the house flipper, who has to cover the investment in the property and carrying costs until it sells.

Over budget:

It’s easy to get over budget when fixing up a property for the house flip and that can ruin your bottom line even when you sell the property. Keep a tight rein on your remodeling budget during a house flip. That means paying close attention to your contractors, being sparing with what you purchase for the home and being vigilant about turning off utilities or remembering to turn off things like the lights when you leave the home.

House Flipping Tip: Set a budget and stick to it.

Lazy Contractors:

It’s the proverbial contractor who is always claiming to be done in ‘two weeks’ but he or she tends to run into the months late time period. There are a lot of great contractors out there, but also a few poor contractors. When you are remodeling a house to flip, you’ll have to do your research before hiring a contractor. You’ll also have to be willing to fire that contractor if he or she isn’t up to snuff.

House Flipping Tip: Research a contractor before hiring and don’t forget to ask for references.

No Inspection:

Don’t just take the homeowner’s word for it. Pay to get an inspector to look over the property before you enter the purchase agreement. This way you’ll have the information you need to fix up a property and won’t be caught off guard by any major structural problems. It’s also a good idea to have the inspector’s report on hand for the buyer.

House Flipping Tip: Pay the few hundred dollars up front to have the property inspected.  

Any of the above reasons can be the cause of your inability to close a wholesaling deal. Stick close to this house flipping guide and you’ll find that you are more likely to flip those houses successfully.

House flipping is a tempting prospect for new real estate investors. It offers the lure of quick, large profits for anyone with the time and investment. Yet, the world of real estate wholesaling is also a temptation for fraudsters looking to make an even quicker buck.

As a new real estate investor it could be very easy to fall into one of these wholesaling scams without realizing it. In real estate, just about anyone can be scammed too. The mortgage companies, the homeowners, the investor, and even the buyer have all been caught in a fraudulent real estate wholesaling deal on occasion.

Common Real Estate Wholesaling Scams

You owe it to yourself to learn about potential scams so you don’t inadvertently enter one when investing in your own house flip. There are quite a few common real estate scams. 

Crooked Appraisals

One in particular involves hiring a crooked real estate appraiser to appraise the market value of a piece of property at way above or below the real value of the home. This kind of scam is used by homeowners, investors and even crooked mortgage companies to make a higher profit on the sale of a property. The person who loses out here is the buyer, who ends up with a piece of property that they paid way too much for. Or the mortgage company accepting say a short sale price that’s vastly undervalued for a property.

Don’t ever higher someone you know to appraise the property for a certain price that you want. Or let them convince you that they can ‘appraise’ the property in your favor for a few extra bucks. It’s a slippery slope that real estate investors can easily fall down.

Simultaneous Closing Scams

The simultaneous closing is a great way for an investor without a lot of capital to get involved with real estate wholesaling. However, there is some potential for fraudulent sales here. Many of you many have already read that title companies are refusing to take a simultaneous closing deal because of recent real estate scams in the news.

It’s better to avoid the use of a simultaneous closing these days when investing in real estate. You’ll still be able to make profits without a lot of investment using other real estate wholesaling methods.

Deals Too Good to Be True!

This is a deal that gets a lot of new investors who like to attend free seminars for the house flipping tips and advice. Often you’ll get a call out of the blue from a company that claims to be hosting a free real estate seminar with lunch or food. Now a free seminar is a very common practice in real estate and normally a great idea to attend.

However, the scammers running this free seminar will ask you to register with your name, address, phone and social security number. You should never need to provide your social security number to register for a free seminar.

Giving this company your social security number allows them to look up your credit report and see whether or not you make a good potential mark. The higher your credit score the better, because it means you are able to get a very large loan.

At the seminar these marks are approached by members of the ‘investment company’ with a potential deal on a million dollar house that they claim is worth $2 million dollars.

The investor that agrees to enter the deal is coerced into getting a mortgage loan for $1.5 million dollars and the ‘investment’ company will do all the work. They claim that they can negotiate the selling price of this $2 million dollar home to just $1.5 million. Then, you’ll be able to sell the home for its full $2 million dollar value and make a nice profit.

What the real estate investment company isn’t telling you is that the home they’ve agreed to buy for you is only worth $1 million at full market value and that’s what it really sells for. The investment company takes your loan and buys the house for $1 million then gets away with the excess $500,000. The mark is left with a home they paid $500,000 too much for!

Tips to Avoid Scams

You can become a successful investor in real estate wholesaling without falling prey to a couple of real estate scams. All it takes is some due diligence and following these house flipping tips to avoid scams.

• Don’t give your social security number to just anyone. You may need it to give to the bank and to place on paperwork for a title company, but that’s about it.

• If you get a mortgage for real estate wholesaling, make sure you get your own separate mortgage to purchase the property. Don’t let anyone get the mortgages for you.

• Perform due diligence on any property you invest in. This helps you find any anomalies and come to your own appraisal value.

As a wholesaling investor you’ll serve yourself well to avoid scams and other kinds of questionable deals. These listed scams are just a few of the many lessons to learn about real estate investment.

One of the biggest concerns in house flipping is finding yourself a reliable and competent contractor for those remodeling jobs. Yet, many new and even seasoned investors neglect this basic house flipping essential before jumping into the real estate business.

Lack of planning can lead to a loss of income, or profits, especially in the case of wholesaling. You can save yourself a lot of hassle, money and time by following these house flipping basics to finding yourself a great contractor for those real estate wholesaling jobs.

1. Don’t Take the Low Ball Offer

Sure, you are running a business and have to keep an eye on the budget, but don’t automatically pick the contractor with the lowest offer. If most of your estimates fall within a close range and then there’s one contractor offering a drastically reduced price, you’ve got to assume that there is a reason for this. He or she isn’t just offering a great price out of the kindness of their heart. In fact, this contractor may have something of a reputation in the area for bad work and is having a hard time getting jobs because of it. Or the contractor may be inexperienced and really has no idea how involved the work will be on your house flip.

Real estate wholesaling, especially in house flipping, is about taking old cheaper houses and selling them after fixing them up. Sometimes you fix them up just a little or you invest a lot in them. No matter how involved the work, it should be completed properly.  So don’t automatically pick the lowest bid.

1. Don’t Be Rushed When Looking

Hopefully, you’ll start looking at contractors before you actually have a lot of homes to start flipping. It’s not a good idea to be rushed when looking for a contractor. Call around when you decide to invest in real estate wholesaling. Speak with a few contractors to get an idea of their experience, prices and what services they offer.

That way, when you get a real emergency on hand like termite damage, you can just flip through your contacts to a couple of contractors you’ve already picked out for the job and give them a call.

1. Don’t Get Pressured into Hiring a Certain Contractor

House flipping basics says you should never feel pressured into hiring a contractor. If a contractor or salesperson starts trying to pressure you into signing with them for the job ask them to back off. Remodeling or rehabbing a house takes a lot of effort and you want to feel comfortable with the contractor you’ve hired.

It’s time to ask the contractor to leave if they don’t ease up on the high pressure sales routine. You should also be prepared to end the meeting if the contractor tries to get you locked in by saying that this is a ‘today only’ offer or special. This is a common high pressure tactic designed to get homeowners to hire that contractor now instead of looking around for other deals.

1. Don’t Pay Hourly

Even when remodeling in real estate wholesaling it’s best to avoid paying by the hour. You may think you are getting a great deal because the contractor says a project can be done in so many hours, but that’s really just an estimate. You’d be surprised how quickly those man hours add up when the project gets started.

If there is anything you take to heart from these house flipping basics, it should be the practice of paying a flat rate for the entire project with the contractor. This also works well in getting a project done quickly. The contractor knows he or she will be getting the same price for completing the job no matter how much time is put into it. So, why should they take their time dawdling on the job and stretching out their hours?

1. Don’t Hire Unlicensed Contractors!

It’s illegal in most states for contractors to work without a license. You’ll certainly avoid a big mess in your real estate wholesaling project by asking the contractor if he or she is properly licensed to do the job.

Don’t just take their word for it either. Be sure you get a look at their general contracting license before hiring them, either a photo copy or the real deal. You’ll be able to confirm that the contractor is currently licensed with your state’s Secretary of State website or office.

These five tips will take you far in your decision to pick a good contractor. No matter the size of your current real estate wholesaling project, large or small, you’ll save yourself a lot of time and money with the right guy.

Another potential problem to beware of in real estate is the greedy buyer. You’ve been flipping real estate contracts for a few months now, making a pretty good profit wholesaling houses for a living. As a real estate investor, you are still fairly new to the process but feel secure in your own personal niche. You’ve got a couple of regular buyers and have a good wholesaling lead coming in every couple of weeks.

One day another more experienced investor approaches you to invest in some of your wholesales. You provide this investor with information on a few great homes, including their addresses, that you’ve signed contracts on and haggle a bit about the assignment of contract fee. Then you shake hands and part ways, with you expecting a check in the mail or a call back with confirmation on one of the properties.

What you don’t expect is for that interested investor to approach all of the homeowners you had under contract behind your back and offer them a slightly better price to sell the property directly to him! All of the homeowners agree and you’ve just lost a month’s worth of income, at least! What happened?

Scam Artists Preying on New Wholesalers

Those thinking about wholesaling houses for a living will have to be prepared for the above possibility. As more and more ‘newbie’ wholesale investors are entering the market, the scam artists in real estate investment have found a way to take advantage of them. If not taking your best wholesaling lead from you and gypping you out of a finder’s fee at the very least, the experience can leave you wanting to get out of real estate wholesaling altogether.

Flipping real estate contracts can be a great way to earn and income and not all real estate investors are looking to cheat new and even practiced wholesalers out of their finder’s fee. It’s usually too much effort to track down a homeowner anyway, even with their address. There’s also the time involved in giving the homeowner another sales pitch and convincing them that it’s ‘okay’ to sell to someone else under your nose. It’s just not worth the finder’s fee of only a few thousand for most real estate investors. There are just a few bad apples that you need to guard against when you start wholesaling houses for a living.

There are a couple of different ways you can lose a wholesaling lead to a deceitful buyer.  During an initial conversation you may let slip or just reveal without knowing better, the names of the homeowner you have under contract and their address. Armed with this knowledge the buyer is able to track down the homeowners and offer them a better deal to sell directly to him or her.

Another way to lose that finder’s fee is by simply neglecting to use an assignment of contract document when you close that deal. If you don’t put your agreement down on paper how can anyone know it really happened? Should you decide to sue for your fee after that sale goes through and you don’t receive any money, the courts won’t be able to award you the funds. The only thing the courts know is that you signed in the buyer’s name on that purchase agreement with the homeowner.

When flipping real estate contracts you’ll have to guard yourself against these little mistakes. A few simple steps to follow with every wholesaling lead can protect you from the occasional scam artist trying to trick you out of that finder’s fee.

Protect Yourself When Wholesaling Houses for a Living

• Create or find a good Assignment of Contract Document and use it for every deal you close with the buyer.

• Start using Non Compete Non Disclosure (NCND) agreements if you find a lot of buyers are just going behind your back to negotiate with the homeowner.

• Bring copies of both documents to every meeting, even the first one.

• Safeguard the homeowner’s name and address during initial conversations or until the NCND agreement is signed.

• Drop off a copy the assignment of contract document with the county clerk as soon as it’s signed. This ensures it comes up during a title search.

• Also ask the buyer to reference your services on their HUD 1 form during closing. The closing agent/lawyer can simply reference you as a consultant.

• Request the buyer make payment in the form of a cashier’s check when you both sign the assignment of contract document, instead of giving you your finder’s fee after closing.

• Be above board and honest with all parties when flipping real estate contracts.

Flipping real estate contracts need not be a scary practice and you shouldn’t be afraid of every new buyer that comes along. Wholesaling houses for a living is a business-to-business trade and in this business you are bound to lose a few deals. However, with a few simple safeguards you can ensure that you don’t needlessly lose wholesaling leads to the bad or greedy buyer.