In the last article, we talked about how you can still flip properties – literally overnight in some cases – in this economy. However, the key to this type of speed actually lies in your willingness and ability to network and set up buyer connections ahead of time so that when a good, qualifying deal arrives, all you have to do is make the call.
Now, since the beginning of real estate investing education, mentors, gurus, professors and “guys on the street” have been pounding out the mantra: “It’s all about networking.” And that is true. However, there are so many people out there trying to network with the types of buyer that you are looking for – often without the experience and expertise they claim – that it can be very difficult to actually connect with qualified, interested buyers who are ready to act when you show up with a property to flip, even if the property is an unequivocal deal.
Today, networking is about far more than handing out business cards or exchanging email addresses. It is about effectively making connections and creating references for yourself so that when you need to act fast, people will take you seriously. Here are a few ways to do this:
- Partner with someone more experienced
You might even want to do this if you have to pay for the mentoring, as long as that person is willing to vouch for you. Many “guru’s” offer this type of program, but you need to make sure that you will get real time with that guru during which you can make an impression, and that the guru in question has the type of reputation and influence that would enable him or her to help you make connections once you have completed their program or even while you are in it.
- Describe exactly what you offer
If you can do one good deal with a good connection, then that person will likely be happy to recommend you. So start looking for deals, and make sure that you are very clear and concise when you offer these deals to investors. While you may have to give yourself several chances, once someone bites and the deal goes off, you will have exponentially expanded your networking ability and your buyer’s network.
- Recruit people online
Many real estate investors keep a list of people who meet certain buying qualifications or who are interested in certain types of deals. They may have websites set up to glean these investors’ contact information and determine what they are interested in. Then, at the touch of a button, you can contact these investors with deals, and you know that they are interested because they gave you their contact information.
In the end, few things can beat a good reputation and personal contact when it comes to selling properties fast. Anything you can do to improve your odds at this by networking in any way possible will help you expedite your short term real estate investing.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate.
If you are interested in talking with Peter further about his private real estate coaching program please email him directly at peterv@pvretraining.com with your full name and all your contact information along with “why you need a mentor / coach”.
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We have spent a lot of time talking about short sales recently. This is because in many ways, flipping short sales has taken the place of flipping contracts and properties themselves. It is not because those types of deals are no longer available, but instead largely due to the fact that most buyers are going to have trouble getting financing in traditional ways, and most real estate investors do as well thanks to new lending laws that require extremely large down payments and discourage the possession of multiple mortgages.
However, there are definitely a lot of short term real estate investors out there who would prefer to continue doing business simply by flipping properties, and without getting tangled up in short sale negotiations and the in’s and out’s of funding these deals. If you are among those investors, do not think for a minute that this means that you will no longer be able to invest in real estate. However, you will have to come to terms with the changes in the market that impact how you locate and sell the properties that you want to flip.
Many gurus are still teaching the “buy low, sell high” strategy. And they are perfectly right to do so. As long as you can do this, then you will be able to succeed in real estate investing – whether your preference is long term, short term, or just anything that makes you money. However, for a short term real estate investor, the additional caveat of “sell fast” or “turn fast” makes a big difference in this equation. After all, it is one thing to know how to invest in real estate, get good deals and then sell them. It is quite another thing to locate the buyers that you need on short notice.
If you want to simply flip properties, then networking is going to take on a level of importance that is probably unprecedented in your professional life – even if you have been networking on deals for years. The best way to sell a property fast is to have a buyer in mind, and preferable lined up, before you ever start negotiations of any type on the property itself. This gives you several advantages:
- Your buyer has more time to find financing
- You can promise your seller a fast closing
- You may be able to avoid the necessity of transactional funding all together
- You get your money faster
If you just want to flip, then having qualified buyers lined up at the ready will be critical to your success.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate.
If you are interested in talking with Peter further about his private real estate coaching program please email him directly at peterv@pvretraining.com with your full name and all your contact information along with “why you need a mentor / coach”.
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Historically, simultaneous closings were a great way for real estate investors, buyers and sellers to all get their “piece of the pie” very quickly in a real estate flip. Simultaneous closings occur when a seller signs a contract selling the property to a real estate investor. This contract is put into the hands of a closing attorney. At the same time, the investor signs a contract selling the property to a third party buyer, contingent on that buyer’s ability to fund the transaction. This contract also goes to the closing attorney. At this point, the contracts are in order, and if they were released, the third party would own the property. However, this does not happen until the third party brings their funding to the table with the closing attorney, who takes the money in hand and closes the deal. In a matter of days, in many cases, the seller got their selling price, the real estate investor got their cut for the flip, and the buyer got the deed to the property.
At first, this might not really sound all that much different from the closings that happen today using transactional funding. However, there is one critical difference: in a simultaneous transaction, your name, as the real estate investor, never actually goes on the deed to the property. This can be advantageous for many reasons. Read the rest of this entry »
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Now that you understand how transactional funding works, it probably has taken a pretty big load off your mind. Turns out, despite the new laws that require your name to be on the deed of a property that you sell, you can still get funding that is not a risk to you or the lender without having to have perfect credit and a huge down payment on the property.
However, there are times that transactional funding alone will not work to smooth the short sale flipping process. This occurs in a deal in which there is a mandatory “seasoning” process, which requires a buyer to hold a property with their name on the deed for a period of days, weeks or months before they can sell. As you can see, this can seriously slow the flipping process, especially if you are dealing with a buyer who wants to move in immediately. Seasoning is another method that legislatively works to help prevent fraud, but many investors feel that it is also deliberately designed to make flipping difficult and target the real estate investing community. There are two ways to deal with seasoning: Read the rest of this entry »
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