WHOLESALING REAL ESTATE FOR BEGINNERS

By Joe Arias

Wholesale real estate is a great way to get some real estate investor experience without spending tons of money. Like any other real estate investing method, you should make sure this aligns with your goals and personal interests before getting started. In this article, we’ll help you better understand wholesale real estate for beginners so you can identify if it’s the right choice for you as you get started in real estate investing.

What is Real Estate Wholesaling?

Essentially, you would act as the “wholesaler.” Your job is to acquire a contract to sell from someone looking to sell a property. You would then find someone interested in buying the property – usually a real estate investor – and you will sell them the contract. Never at any point do you buy or sell the property. Instead, you find properties selling from slightly less than market value and connecting them to buyers for a fee. Many people like wholesaling real estate as beginners in investing because it doesn’t require you to invest any money in the properties. It’s relatively low risk and can have a low turnaround time.

Real estate wholesaling is completely legal, despite the debate around it. This is because the wholesaler is never actually selling the property, just the ownership of the contract to buy the property.

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How do You Make Money Through Real Estate Wholesaling?

As a wholesaler, your job will be to find properties that are being sold under market value. Once you get into contact with the property seller, you will work with them to get a purchase contract. You will have to do your research and provide your seller with information on the value of their home and why they should work with you. Once you get the contract, you will find a real estate investor interested in the property. You will then sell the purchase contract to the buyer. You earn your revenue through a wholesaling fee attached to connecting the buyer and the seller. This is typically a percentage of the overall cost. To reiterate, you are only selling the contract to purchase the property, not the property itself.

Many buyers like working with wholesalers because they do all of the work of finding the properties, assessing the value, and negotiating with sellers. Despite having to pay the wholesaling fee, it’s often still worth the extra cost.

The Pros of Wholesaling Real Estate for Beginners

Valuable Real Estate Knowledge and Experience

If you want to gain connections and knowledge about real estate without the financial risk, wholesaling real estate is excellent for beginners. You still learn the basics of real estate through negotiation, organizing, finances, and legal aspects. Through wholesaling, you’ll deal with many different properties and investors, and you can start to identify what you like and what you don’t. When you switch investment styles, you’ll know what to look for.

Quick Turnaround

After you learn what you need to know to get started, the best way to learn how to wholesale is to get the experience. You can get this experience quickly, as wholesale real estate can be a relatively quick turnaround. This is great for beginners because it means you get your money faster and build your connections faster. Things like house flipping can take months, and when you don’t have a lot of revenue coming in, that can hurt your potential to succeed in real estate. Wholesaling, however, has about a month turnaround for each business dealing. If you think you can handle more than one, you can time them out to make sure you’re getting paid more than once a month.

No Capital Required

The best part of real estate wholesaling is that you, as the wholesaler are not obligate to dish out any money. When you start off in real estate, money is often the most significant barrier to becoming successful. Choosing beginners who opt to start with wholesale real estate set themselves up for success because they make all of the valuable connections and gain experience and knowledge without investing all of their money. If you are worried about getting started because you do not have a lot of capital, wholesaling may be your best method.

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Cons of Wholesale Real Estate

No Guaranteed Income

Unlike other real estate investing methods, wholesale real estate has no guarantee of working out and ending in a paycheck. Beginners who decide to invest in property management can usually guarantee a steady income through tenants paying rent. The only time you will get paid is if you can successfully match a seller and a buyer and complete a deal. Even then, you’ll have to wait to get paid until everything goes through. As you get better, you’ll have more confidence in your income, but it’s never something you can count on.

Networking Heavy

Your paycheck is entirely dependent on your ability to find a buyer who wants to invest in the property you’ve found. Suppose you do not have the type of personality that does well with networking or negotiating. In that case, that is something you want to really consider before choosing wholesale real estate as your career. If you are unable to find a buyer, you may be financially obligated to purchase your property. As you build your references, this risk may be avoided. It’s still something you want to heavily consider if reaching out to a lot of people makes you uncomfortable.

Is Wholesale Real Estate Hard?

The short answer- yes. Wholesale real estate can be complicated when you’re first starting off and don’t have many connections. After you make your first couple of deals, things will start to get easier. You will begin forming a buyers list and have connections to pull from when you find properties under market value. The hardest part is having all three components in sync. If you are missing any of these three components, you will not have a successful wholesale real estate business. First, you must be able to identify properties being sold for well under market value. Second, you must have good negotiation skills to make deals with the seller. Lastly, you need to find and partner with cash buyers who are willing to purchase these properties. To be a successful real estate wholesaler, you have to build strong connections with buyers, create robust lead lists, and network with others in real estate.

Real Estate Wholesaling Explained

Wholesale real estate is a relatively simple concept once you lay it out in a scenario. Let’s start at the beginning of the process with finding a home for under market value. You find a homeowner looking to sell their home. The house isn’t in great shape and will not be able to sell for market value. The seller of the home has two options. They can spend the money to rehab their home and fix it up, hoping to sell for market price. Or, they could enter into a wholesale contract with a real estate wholesaler. Essentially, the contract between the wholesaler and the homeowner would give the wholesaler the right to buy the property at an agreed-upon price under market value. The real estate wholesaler will then look for an end buyer willing to pay slightly more than what they agreed upon with the seller. The end buyer is usually another real estate investor. The wholesaler will sell the rights to buy the house to this new investor. Essentially, they are selling the contract. They are not selling the home because they never bought the home. The wholesaler negotiates a contract, then sells that contract, which gives the buyer the right to buy the property.

Essential Skills to Become a Successful Real Estate Wholesaler as a Beginner

Real estate wholesaling comes down to a few key concepts. Once you capture these concepts, you’ll be able to succeed and start making a profit.

Negotiation Skills: Real estate wholesaling revolves around negotiating with both the seller and the buyer. For the seller, you have to convince them to sign a contract with you to sell the right to buy their home for under market value. Then, you have to convince an investor why they should be interested in buying your property. Having to convince one person is difficult, but convincing two takes some serious skills.

Technical Skills: If you are tech-savvy, you can quickly get ahead of your competition. Not everyone in the industry fully utilizes technology. If you take full advantage, you will become successful. Ensure you have a fast, modern website that makes it easy to get in touch with you. Develop a presence on social media and connect with real estate investors in your area. Utilize software to handle your finances, help you find properties under market value, and keep you organized. All of this will make a massive difference in your business.

Time Management Skills: You need to understand the value of your time and your own personal limits. If you take on everything all of the time, you’re going to get burnt out. This will not only affect your mental health, but it could also lead to errors in your business. Understand what you can personally manage, then outsource or delegate the rest.

Create Your Business Plan for Real Estate Wholesaling

If you’ve decided that wholesale real estate is the right next step for you, it’s time to develop a business plan.

Identify Good Places to Find Leads

This applies to both your real estate investors looking to buy and your homeowners looking to sell. If you can’t get leads, you’re not going to make any money in real estate wholesale. To find leads on homeowners looking to sell, utilize websites like Craiglist.com, Loopnet.com, Propertyshark.com, Realtor.com, etc. These websites provide tons of data that can help you find leads for your business. For leads on real estate investors, use your networking skills. Put yourself in real estate groups and places where investors will be and start making valuable connections. Establishing an excellent social media presence can also help you build rapport with other real estate professionals.

Build Connections with Buyers

Every time you complete a sale to a buyer, have a conversation with them about how you can be mutually beneficial to each other. Take the time to understand what they are looking for in properties they invest in. Keep a spreadsheet of all buyers you work with and what types of properties they buy. Reference this sheet every time you find a property that you can wholesale and pair it up with the buyer who it matches. This could take time but will build an invaluable relationship.

Do Your Research

Both your seller and your buyer expect you to offer them a well-researched and honest price for the property. For your seller, you need to give them a price along with information on comparable sales in the area, estimated cost of repairs, and the after repair value of the property. All of these numbers should be included in your offer to both the seller and the buyer. Do not try to edit the numbers to profit more. Sellers who see through this will be offended and cancel the deal. Buyers will have done their research and will know what you did. You’ll get a bad reputation, and the buyer will never want to work with you again.

How to Find Buyers for Real Estate Wholesale Deals

You can find sellers who have great properties under market value, but you will never make a profit if you can’t find any buyers. The more deals you make, the more buyers you’ll form connections with, and the easier it will get. Until then, you need to learn some strategies on how to find buyers when you are a wholesale real estate beginner. These are a few creative ways to find buyers when you are first starting out in wholesale real estate.

Craigslist

Craigslist is a great place to start when looking buyers. The site allows you to place ads and start collecting leads on interest buyers. Aside from that, you can use Craigslist’s “housing” section to identify property owners in the area who may not be ready to buy right now but could be valuable connections later on.

Social Media

Social media is a great way to find real estate investors in your area and connect with them. Sites like LinkedIn, Instagram, Facebook, and even NextDoor could be good places to start. Many investors have Instagram accounts where they post about their house flips or deals. Start building a connection with local accounts that could turn into buyers. LinkedIn is a great place to make business connections and post about potential deals. Facebook has lots of local real estate groups you can join; they also have Marketplace features that include real estate options. You can either post in those or look for leads later on.

Networking

Networking will be one of the most valuable things you do in your real estate career. If you are not already a member, join your local real estate group, either online or in person. Go to every networking event and meet as many people as possible. Mention what you do and ask around to see if anyone knows of real estate investors who utilize wholesale real estate in their businesses. You may also want to build connections with real estate agents, as they have access to lists of recent cash sales.

Website

Establish your presence online as a real estate wholesaler and optimize your SEO so that you rank well on Google if anyone searches in your area for wholesale real estate. Create a lead capture form on your website where potential sellers and buyers can submit their information.

Courthouse Auctions

Buyers must have all cash at courthouse auctions, so this is a great place to go if you are looking for buyers for your deals. Visit these auctions regularly and start to build connections with the people who attend. Get to know these buyers and the types of properties they look for so you can reach out if you find one that fits their needs. Ask for their information and follow up.

Important Things to Remember for Real Estate Wholesaling

Utilize Buyer Preferences

Every buyer has their preference of properties they like to buy. Once you know what your buyers are interested in, you can start prioritizing deals based on that. Keep a spreadsheet of all of their preferences and reach out to them when one of your properties align with their interest. Do not reach out to buyers with every single deal if you don’t to. If one of your buyers is not a house flipper, don’t have them a house that needs a ton of work. Utilizing your knowledge of your buyers will help you guarantee a sale.

Understand Your Seller

Although you want to get your properties contracted for a low price, you need to be fair to your sellers. While you may understand why you are offering them a specific price, if you do not communicate all of those reasons to them, they will not. When speaking, you will want to show them your reasoning without making them feel bad about the state of their property or the value it’s at. While this all comes down to numbers in real estate, it may be a much more emotional process for them. There could be other buyers communicating with them for all you know, so make sure you form a good connection during this process.

Another important aspect of your wholesaling real estate business should be transparency. Sellers need to know that they can trust you. If they know that, they’ll be much more likely to work with you. Be honest about them with pricing, risk, and updates.

Keep Everyone Up-to-Date

Your buyer and your seller will feel more at ease if you are transparent with them every step of the way. Make sure to communicate with both of them any time something new happens. Even if you did your part and got the contract handed over, stay involved until the end. These are relationships you may need to use in the future for more deals, so you want to make sure everyone feels comfortable and happy. Do what you can to ensure open communication and complete transparency throughout the entire process.

Maintain Connections

Your business with your buyers should not end when you get your cut. Always follow up with them to make sure they are happy with how things went. Discuss with them in further detail how you can be an asset to each other and continue to build your working relationship long after the deal is closed.

The Last Step: Closing the Deal

Once you have done all of the work to find the property, work with the seller, and identify an interested buyer, you are finally at the last step: closing the deal. To do this, you will assign the contract you made with the seller at the beginning of this process. Once you assign the contract to the buyer, they will then be able to purchase the property. Once the buyer purchases the property, you will send the deposit to the title agency or attorney handling the closing. After everything is complete, you will get your wholesaler fee for connecting the buyer and seller.

This can all sound like a lot of information and may appear to be very overwhelming. Although a lot goes into this, there’s a reason people recommend wholesaling real estate for beginners. It is the most affordable way to get invaluable real estate experience when starting off in real estate. You will build skills, knowledge, and connection so quickly through wholesaling. To get started on your real estate investing journey, check out our website.

Joe Arias

Joe Arias and his partners have flipped hundreds of properties in the Southern California Region. He has developed cutting-edge systems to simplify and scale the entire remodel process that can easily be applied to flipping, rentals, wholesaling, and other passive income strategies. More recently, Joe founded a real estate investing education company called RealSuccess Investments, allowing him to share his tools and systems with hundreds of up-and-coming investors. 

RealSuccess is focused on education on flipping, rentals, passive income, and wholesaling.

Joe is also a best-selling author. He has written 4 books: Finding your RealSuccess, First Steps to Flipping, R stands for Rentals and Retirement, and Wholesaling Real Estate.

“I came from Argentina when I was 20, I am 40 years old now. I didn’t know anyone, I am CERO generation, usually people say, I am first or second generation but I was the one that crossed the border, no language, no friends, no family, no money, nothing, nada… If I can do it, anyone can.”

From a young latino immigrant  to a celebrated real estate investor, Joe is a true testament to hard work and discipline. As an investor, he has made it his mission to help others achieve financial freedom while enjoying living a life of passion, fulfillment, and empowerment.

RealSuccess Website

www.ourrealsuccess.com

Personal Instagram: 

https://www.instagram.com/joeariasinvestor/

Real Estate Investment- Instagram: 

Instagram: https://www.instagram.com/realsuccesseducation/

Video For Finding Money from All Day Training (10 Hour Seminar)

https://vimeo.com/manage/videos/528446162

1 Hour Webinar

https://vimeo.com/manage/videos/530996751

Amazon Book#1:

Amazon Book#2

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What’s on Your Mind?

By Sam Sadat

Life is a banquet, yet tragically, many are starving to death. That’s the focus of this article. Consider the story of some people on a raft off the coast of Brazil, dying of thirst. They were unaware that the water beneath them was fresh. The river’s force pushed fresh water miles out to sea, right where they were, but they didn’t know it.

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Similarly, we are surrounded by joy, abundance, and love, but most people are oblivious. Why? They’re brainwashed, hypnotized, asleep. What’s the solution? Wake up! Don’t dwell on past mistakes made while you were asleep. Why lament actions taken in a hypnotized state? Why identify with such a person? Wake up! Adopt a new mindset and a new perspective. If you change the way you look at things, the things you look at change. Scientifically speaking, this statement has been validated by Quantum Mechanics.

The first step is to wake up. It’s challenging to let go of the things you’ve been conditioned to believe are essential and vital for your survival. Second, understand. Understand that your current ideas might be wrong and that these ideas influence your life, creating chaos and keeping you asleep. Ideas about love, freedom, happiness, and more. It’s difficult to listen to someone who challenges these cherished ideas.

Interesting studies on brainwashing show that you’re brainwashed when you adopt an idea that isn’t yours, but someone else’s. Strangely, you might even be willing to die for this idea. A key indicator of brainwashing is how you react when your beliefs are attacked—you feel stunned and react emotionally. This isn’t an infallible test, but it’s a good indicator that you’re dealing with brainwashing, defending an idea that was never yours.

We often listen from our programmed, conditioned, hypnotic state. Imagine someone saying, “Steve, how you’ve changed! You were tall and now you’re short. You were well-built and now you’re thin. You were fair and now you’re dark. What happened to you, Steve?” And Steve replies, “I’m not Steve. I’m Ron.” “Oh, you changed your name too!” How do you get through to people like that?

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The hardest thing in the world is to listen and to see. We avoid looking because it might lead to change. We fear losing control over the life we’re desperately holding together. To wake up, you don’t need energy, strength, youthfulness, or even great intelligence. What you need most is the readiness to learn something new. Your chances of waking up are directly proportional to the amount of truth you can handle without running away. How much are you willing to accept? How much of what you hold dear are you ready to have shattered without fleeing? How open are you to thinking about the unfamiliar?

As Joseph Campbell famously noted, “The cave you fear to enter holds the treasure you seek.” We all have tremendous potential to achieve our dreams. Waking up isn’t a gradual process; it’s a quantum leap that can happen instantly. All you need is to be open to all possibilities and attached to nothing.

Sam Sadat is a founder and president of Sam’s Real Estate Investors Club (SamsREclub.com) and Greater LA Real Estate Investors Association (GLAREIA.com). I welcome your comments.

CRACKING THE CODE to Cashflow

By Jonah Dew

What if we could show you how to save and spend money at the same time? What if there was something that you didn’t know about the financial world that was hidden in plain sight? What if there were tools available to everyone, but nobody ever took the time to teach you how to use them to your advantage? Welcome to our world! Right here and right now we’re going to teach you what we were never taught in school—how you can save and spend your money at the same time.

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Most folks will spend their entire adult lives paying their expenses, the bank, and creditors all while witnessing their retirement fund and legacy drastically fluctuate or evaporate in the market! By giving our money to others to control, we’re giving up control of our money simply because it’s what we’ve been taught, and it’s what everyone else is doing. You may believe you’ve never lost control in the first place, but if your money is anywhere but in your OWN banking system, then, you my friend, have given up control.

The wealthiest families in America have been using this system for over two hundred years to eliminate debt, grow their wealth, minimize taxes, and leave a legacy to their heirs.

Robert Kiyosaki, Tony Robbins, and R. Nelson Nash are among the top 5% of people who talk about (and use) this strategy. Walt Disney used it to build Disney World. Ray Kroc used it to build the McDonald’s franchise. Sears and J.C. Penney have similar founding stories. This isn’t a coincidence.

R. Nelson Nash, founder of the Infinite Banking ConceptTM, defines it as “an exercise in imagination, reason, logic, and prophecy… It is all about recovering the interest that one normally pays to banking institutions and then lending it to others so that the policy owner makes what a banking institution does. You become the owner, the banker, and the person with full control over how your money is used.

Using this concept you can generate money for:

  • Retirement
  • Your Lifestyle
  • Your Family
  • Real Estate Deals
  • Leaving a Legacy

Many of the people who take advantage of the specially designed whole life insurance policies attribute their financial success to these four criteria:
1. You are in control of your money and where it goes (not the banker or financial advisor)
2. There is no risk involved with this system
3. Your money will grow above the cost of inflation
4. You can access your money immediately

It is NOT too good to be true. You CAN have full control over your financial future and how your money is used today. And we’re here to help you do it!

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Let us introduce ourselves.

First the younger and taller brother, Jonah, I live in Greenville, SC. I’ve been married to my wife since 2016 and we have three children. My Bachelor’s degree is in Business Administration from South University and I have used that in banking and insurance sales.

My first introduction to the Infinite Banking Concept was in February of 2016 and I was immediately attracted to the ability to keep wealth within my family, keep control of my money, and to become my own banker. One of my core values is that God has given us many blessings, and we are to be good stewards of any wealth he allows us to obtain. I believe that many simply just don’t know this process is available and I’m excited to help spread the word. Everyone deserves to know how their cash can compound, and how that can benefit their family, and future generations to come. I’m excited to partner with you to map out exactly how this system can benefit you. I’m extremely excited to show you a clear path to making your financial worries a thing of the past.

Now, the older brother, Jeremiah. After graduating from college with a communication degree in 2006, I went on a debt-reduction spree. I realized that achieving my goals and dreams weren’t possible with student loans and consumer debts. Financial gurus and authors had me wrapped around their finger and I was the most dedicated follower you could find.

After stepping away from my day job to pursue entrepreneurship, I ran into another hurdle in 2013, starting a family! I love my wife and four children more than anything! But, my point is: I hadn’t figured out a system to keep any of the money I was earning as my expenses rose higher and higher.

In 2015, a business partner briefed me on “something about fractional banking where guys are earning 40% on their money!” Well, I was in for whatever that was! Eventually, I was introduced to the Infinite Banking Concept (which tripled my net worth within two-and-a-half years)!

The style of the presentation I saw, and the Googling I did on the subject, was mucho confusing though. In 2019 I decided I needed to do something about it. So, after a handful of contracts, and a growing portfolio, my younger brother Jonah and I decided to build an educational platform that would help break down the concepts so that others could understand how high-cash-value Whole Life Insurance could be used as a private banking system. We now teach, train, and speak at live events across the country to make sure our talents double before the Master returns (Matthew 25: 14–30).

If you’re ready to learn more and ultimately become your own banker so that you can take control of your financial future we’d love to connect with you. Learn more at https://saveandspendsystem.com/

Take Your Investments to the Next Level

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Incentives

Don’t miss out on this incredible opportunity! If you take action and put a property under contract within the next 48 hours, you will be eligible to receive a range of enticing incentives:

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Act now to secure these exclusive incentives and make your property purchase even more rewarding!

Have questions? Either respond to this email or contact Legacy Invest Realty at [email protected] or Click Here to schedule a meeting

Network and Gain Insight Here…

Realty411’s Real Estate Investor Conference – The Latest REI News

Dear Real Estate Investors,

Realty411’s new in-person Investor Summit in Southern California is now scheduled in Southern California. Our special one-day conference on Saturday, August 3rd, 2024 will host incredible educators from around the country.

Don’t miss our top experts who are ready to share their valuable insight with you — ALL DAY! Be sure to register for this important and insightful real estate conference created just for you.

Valuable Insight to Be Shared:

  • Multifamily Investing
  • Finding Seller Financing
  • Commercial Investing
  • Land banking
  • Industrial real estate
  • Infinite banking
  • Asset protection
  • Real estate development
  • Single-family rentals
  • Leads for Top brokers/agents
  • Rehabbing houses for profit
  • Finance and private lending
  • Lead generation for agents/brokers
  • Out of state investing
  • Plus, so much more!

Let’s unite to network and learn in Southern California. Connect and get informed by top real-estate investment educators from around the country.

Be sure to RSVP today and save your seat.

For those who cannot travel to this event, we are hosting a VIRTUAL one-day conference later this month. Learn more information about this exciting online event below.

You’re Invited to Our NEW Virtual
Investing Summit – Learn Live!

Attention active or soon-to-be real estate investors, you’re invited to a Realty411 Virtual Investing Summit, which unites investors, real estate leaders, and our guests for an amazing day of information and motivation.

Register for Our NEW Virtual Investing Summit on Saturday, June 22nd, from 9 AM to 3 PM PT (Noon to 6 PM ET)

Guests can join us virtually to learn LIVE from top REI experts who’ll share their important knowledge, strategies, and insight. Realty411 is uniting industry leaders to help our guests make the best educated investment decisions they can.

RSVP for this awesome online event today, a ZOOM link will be emailed to you before the event. Additional details will also be sent out.

LIVE & INTERACTIVE, CLICK BELOW

Since 2007, Realty411.com has assisted top companies expand their visibility and grow their business. Contact us for a complimentary marketing session. Investors, do you have questions about real estate investing? Are you looking for a turnkey rental? Need a solid REI referral?Book a meeting with a Realty411 team member: CLICK HERE.

Considerations When Selling on an Installment Contract

By Mr. Land Trust, RANDY HUGHES

One of the many ways to make money in the real estate business is to buy low and sell higher on an installment contract.

The traditional method of contract selling is known as “Contract for Deed.” It is a risky way of selling property when the buyer does not have cash or conventional financing. The risk involves the buyer defaulting on the contract.

Where’s the Risk?

By law, even though they have defaulted, the buyer still has an “equitable interest” in YOUR property. That interest must be foreclosed upon.

Foreclosure is a time-consuming and expensive legal process that can take months to accomplish while the contract seller makes payments on her underlying loan with no income to offset her payments. This is the WORST part of real estate investing.

One of the many benefits of using a Land Trust to hold title to investment real estate is the ability to sell the Beneficial Interest (which is personal property and not real property in most states) on an installment contract with the capability to “repossess” the Beneficial Interest when default occurs instead of having to “foreclose” the interest. Repossession takes about 30 days, foreclosure can up to a year.

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A Guiding Example

Regardless of which method you use to “sell on a contract,” selling the real property or the Beneficial Interest, you should check your State’s law regarding Contract Sales. For example, in Illinois, there is the Installment Sales Contract Act. It represents an excellent example of why I am always recommending that you seek competent legal counsel. There are certain disclosures required under the Illinois Installment Sales Contract Act.

The Act states that it means a “. . . legal device whereby a seller agrees to sell and the buyer agrees to buy a residential real estate.” Wait!, you say. Didn’t you just write that the Beneficial Interest is personal property? You are correct. I did. It is in most states and that is why I like to set my trusts up in states that consider the Beneficial Interest of a Land Trust personal property. And as documented in the DePaul University Law Review, volume 18, issue 2, article 37, page 878, it is.

Since the Beneficial Interest is not real estate, does the Act apply? The attorney in Illinois with whom I consulted encouraged me to comply with the Act anyway in case a judge rules that the Act does apply. When you go in front of a judge, anything can happen . . . no matter what the law in your State says. Judges “make law” every day in their courtrooms and if you don’t like it, you can appeal.

This Could Be a Good Thing

Even if you view the attorney I consulted as being overly cautious, you might consider fulfilling the requirements under that law. They could make your contract even more defensible if it should be challenged.

Here are highlights of those requirements:

  1. The contract must be in writing;
  2. The Seller must give the Buyer a copy of the contract at least 3-days before closing.
  3. The contract must contain many disclosures, including, but not limited to the following:
  • Purchase price
  • Down payment
  • Interest rate
  • Payment due date
  • Balloon payment due date (if any)
  • Amortization Schedule
  • Statement of who is responsible for repairs.
  • Who pays real estate tax bills
  • Who pays for property insurance
  • A list of building code violations
  • Amount of any unpaid real estate property taxes
  • If there are any liens against the property
  • If the property has been condemned
  • The Seller must record the contract or a memorandum of the contract at the Recorder of Deeds Office in the county where the property is located
  • The Seller must provide the Buyer with an account statement upon request
  • No pre-payment penalties can be charged for payments not due yet
  • If you default, you have the right to pay all fees and charges currently due under the contract to cure the default in 90 days.

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I encourage you to learn more by going to my FREE online training at www.landtrustwebinar.com/411 and text the word “reasons” to 206-203-2005 for my free booklet, Reasons to Use a Land Trust. You can also reach me the old-fashioned way by calling me at 217-355-1281. (I actually answer my own phone, unlike most other businesses in America today!)

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Navigating the New Norm: Multifamily Housing Trends of 2024

By Dr. Chander Mishra

As we progress through 2024, the multifamily real estate sector continues to experience significant transformations, shaping a landscape brimming with both challenges and opportunities.

This detailed analysis delves into the seven pivotal trends that are not only redefining the multifamily market in the current year but are also expected to influence the sector well beyond 2024. Providing a comprehensive guide, this overview caters to investors and industry professionals aiming to navigate these evolving dynamics effectively.

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1. Historic Surge in Multifamily Construction

The year 2024 stands out for its record-breaking pace in multifamily construction, with the completion rates of new units reaching unprecedented levels. This boom is the result of a robust pipeline of projects initiated over the past few years. However, a recent deceleration in new construction starts—prompted by economic shifts, including interest rate adjustments—hints at a potential contraction in the pipeline by 2025. Currently, the market faces heightened competition as a flood of new properties enters the scene.

2. Rental Market Stabilization and Growth

Following a period marked by extreme volatility, the multifamily rental market is poised for stabilization. Predictions indicate a gradual increase in rental rates, fueled by a stable employment landscape, sustained housing demand, and ongoing economic uncertainties. The expected rent growth, while modest, suggests a market moving towards equilibrium, balancing out the rapid fluctuations experienced previously.

3. The Shift Towards Long-term Rentals

A significant trend reshaping the multifamily market is the growing preference for long-term rentals over homeownership. This shift is largely driven by the prohibitive mortgage rates and general unaffordability in the home-buying sector, which has broadened the demographic profile of renters to include those who might traditionally opt to buy. This demographic evolution offers real estate operators a chance to cater to a burgeoning market segment with specialized services and amenities aimed at long-term renters.

4. Impact of Hybrid Work Models

The adoption of hybrid work arrangements is significantly influencing multifamily housing preferences. As more people engage in remote or hybrid work, there’s an elevated demand for living spaces that accommodate home offices. Additionally, there’s a noticeable shift in preference towards multifamily locations further from conventional business districts. This shift provides an opportunity for real estate developers to innovate in property design and amenities, addressing the needs of a workforce that values flexibility and convenience.

5. Advancements in Property Search Technologies

The role of advanced technologies, particularly AI, in enhancing multifamily property searches is expected to expand in 2024. Building on the technological advancements of recent years, AI will increasingly influence how potential renters and buyers explore the property market, offering AI-powered search tools, virtual tours, and personalized recommendations. These technological advancements promise to make the property search process more efficient and tailored to individual preferences.

6. Emphasis on Environmental Sustainability

Environmental sustainability is becoming a critical factor in the multifamily real estate market. A growing segment of consumers is expressing a preference for eco-friendly housing options, including energy-efficient buildings, sustainable construction practices, and features that minimize the carbon footprint of residences. Real estate developers prioritizing sustainability are likely to appeal to environmentally conscious renters, aligning with broader societal shifts towards green living.

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7. Demographic Shifts Influencing Housing

Changes in demographics, such as the aging of certain populations and the emergence of millennial and Gen Z as significant groups of homebuyers and renters, are dictating evolving housing needs and preferences. These demographic trends necessitate a variety of housing solutions, from multi-generational living arrangements to affordable options for younger adults and accessible features for older residents.

Conclusion

The multifamily real estate market in 2024 is characterized by rapid evolution and diverse opportunities. For investors and industry stakeholders, staying informed about these trends is essential for navigating the complexities of the market and leveraging the potential it offers. As the sector continues to adapt and grow, the coming year promises to be a pivotal one for multifamily real estate, driven by innovation, consumer preferences, and economic factors.

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The Broadleaf mixed-use residential development opening at Fitzsimons Village

Located across Colfax from the Anschutz Medical Campus, the new development will include 370 residential apartments and ground-floor retail anchored by Queen City Collective Coffee

Aurora, CO (June 2024) – The development team of Uplands Real Estate Partners, The Max Collaborative, and Wynne Yasmer Real Estate (the same group behind the development of One River North) is pleased to announce the opening of The Broadleaf, a mixed-use residential development located within Fitzsimons Village, across from the Anschutz Medical Campus. The development includes 370 apartments and more than 9,000 square feet of ground-floor retail space lining the boulevard within the master-planned Village. Queen City Collective Coffee has signed on to operate a café space integrated within the residential lobby. Davis Partnership Architects is the architect for the project and JE Dunn is the general contractor. Kairoi Residential has been chosen to be the property manager.

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The Broadleaf marks the second project opening this year for the development team in the greater Denver market. The partnership recently opened the iconic One River North project, a residential high rise in Denver’s River North Arts District (RiNo), which has garnered national attention for its unique architecture with a “canyon” traveling through its facade. Uplands Real Estate Partners and The Max Collaborative were both founded by members of the Ratner family, the founding family of Forest City Realty Trust, which led the transformative redevelopment of Denver’s old Stapleton International Airport. Wynne Yasmer Real Estate is a Denver-based developer whose principals, Brian Wynne and K.C. Yasmer, are both former Forest City executives.

“We’re thrilled to bring a boutique residential building with top-of-market amenities to the professionals who work and study at the Anschutz Medical Campus,” said Josh Hoffman, a principal with Uplands. “The medical campus is home to approximately 25,000 employees and more than 4,000 students, with a total of 55,000 people expected to be working or studying at the campus at full buildout. The Broadleaf will provide residents with a level of quality, design, and amenities not yet offered in proximity to the campus.”

The Broadleaf is located four blocks from the Colfax Light Rail Station, providing future residents with direct access to downtown Denver, Denver International Airport, and the southeast business corridor. The development features a robust amenity package including the only rooftop pool in the area with dramatic views of the mountain range, a state-of-the-art indoor / outdoor fitness center, coworking spaces, a pet spa, bike storage with workshop, a boutique coffee shop, and secure garage parking. A half-acre outdoor courtyard will provide an urban oasis with grills, picnic tables, lounge seating, lush landscaping, and outdoor lawns for yoga and exercise.

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At seven stories, The Broadleaf is the tallest residential building in the submarket. It is the only residential building in the submarket constructed from light-gauge steel, providing superior acoustics and less sound between residences. The meticulously designed residences feature best-in-class finishes and offer one-, two- and three-bedroom apartments ranging in size from 500 square feet to 1,600 square feet.

Media Contact: Paul Suter, Suter Media Relations

720-771-9093 or [email protected]

Top Ten Myths Preventing People from Investing In Real Estate

By Lloyd Segal,
President of LAC-REIA

Myth 1: No Cash

The Myth: “You need money to invest in real estate.”
The Truth: Find a good real estate deal, and the money will find you. Ask any experienced investor and they will tell you that a lack of funds is never an issue; lack of good deals is! If you can negotiate a good price on a house, you will find plenty of partners or lenders willing to put up the money.

Myth 2: No Time

The Myth: “I’ve got a job, a spouse, kids, and little spare time to invest.”
The Truth: Turn off your television and you’ll have all the time you need! People spend an average three hours per day in front of the tube. They spend even more time on weekends. Want to do something fun this Saturday? Load the kids in the mini-van and drive around looking for ugly houses. Make a game out of it giving a dollar to each of your kids that spots an ugly house. Tell them that each ugly house you buy means enough money to take them all to Disneyland.

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Myth 3: Everyone Says This Stuff Doesn’t Work

The Myth: “Those late night infomercials and reality shows don’t work”
The Truth: You can convince yourself that anything won’t work. Henry Ford once said, “Whether you think you can or think you can’t, you are always right.” If you listen to the critics, the naysayers, and other pessimists, you’ll convince yourself it doesn’t work. Most people that criticize money-making ideas need to do so for their own ego. After all, if it were true, what’s their excuse for not being successful? Make a point of not taking financial advice from anyone who makes less than you do.

Myth 4: Too Much Competition

The Myth: “There’s too many people trying to buy houses to find a deal.”
The Truth: There are more than enough deals to make everyone successful. At any given time there are hundreds of distressed properties for sale in your market for each investor looking for them. Besides, a majority of people who say they are investors are just sitting on the sidelines waiting for something to fall in their lap. Don’t be one of them – go out and make deals happen! You will be successful if you spend your time finding deals and not worrying about other people.

Myth 5: It Doesn’t Work in My Market

The Myth: “It doesn’t work in my city.”
The Truth: It works in EVERY market. True, it may work differently in some markets than others, but there are investors making money in every city, every day of the week. You have to learn your market – the rents, the trends, the local customs, the lenders, the title companies, etc. Then, learn the techniques and adapt them to your market. If you are in a hot market, you can buy and sell properties faster and ride inflation. If you are in a down market, you can find lots of bargains. Regardless, in every market, there are people with financial problems that are forced to sell their homes.

Myth 6: The Recession is Coming

The Myth: “Although the market is good right now, I hear that we are heading for another recession.”
The Truth: There are always naysayers predicting market crashes. You need to ignore these pundits. Besides, there are always deals regardless which way the market is heading. If the market changes, change your strategy. For example, if the market falls, sell cheaper or with attractive terms. When Dell wants to move more computers, they drop the price. When GM wants to move cars, they offer no-interest financing. Be creative and do things that make your houses sell or rent faster. If prices are falling, buy way below market and sell just below market. If rental vacancies go up, offer free cable or WiFi. After all, when everyone else is “dooming and glooming,” it only clears out the competition.

Myth 7: Realtors Won’t Cooperate With Me

The Myth: “Real estate agents don’t cooperate with investors.”
The Truth: The right agent can be your best friend and #1 source of business. I have one agent that brought me six deals in the past year. She knows exactly what I want and only calls me when there’s a deal. You need to educate a few agents and let them know exactly what you want. Few agents have repeat customers. In contrast, you have to make them understand that you will be giving them business over and over again.

Myth 8: I Have Bad Credit

The Myth: “I need good credit to buy houses.”
The Truth: Good credit helps, but you don’t need it to make money in real estate. Lease/options, owner-financing, flipping properties, assignments, and other creative techniques will allow you to buy real estate without credit. Besides, you can always use a partner who has good credit. You can also borrow “hard money” without having good credit. In the interim, you can work on fixing your bad credit so you can use it as an asset in the future.

Myth 9: I Might Lose Money

The Myth: “Real estate is risky. I could lose everything.”
The Truth: Real estate is one of the safest investments you can make! The stock market is beyond your control. Savings, CDs, money market funds won’t earn you enough money to make it worthwhile. You have to be willing to take a calculated risk to make money. The more you educate yourself, the less risky real estate becomes. However, don’t think you need to know everything before taking action.

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Myth 10: I Don’t Know What To Do First

The Myth: “I need to learn more before I start.”
The Truth: If you’re reading this, you probably know more than enough to get started in real estate. After all, you’ll never learn everything. Knowledge is an ongoing learning process, not a result. Read books, attend seminars, and take action. Then, learn some more and take a lot more action. If you are really impatient, enlist the help of others.

Henry Ford said, “Why should I clutter my mind with general information when I have men around me who can supply any knowledge I need?” Henry Ford was a smart man because he realized that he didn’t need to know it all if he could consult with others that did. And this was before Google!

Now go out there and start submitting offers. Remember, you won’t catch any fish if you don’t put your hook in the water.

Lloyd Segal

After practicing law for over 30 years (specializing in real estate litigation), Lloyd Segal assumed the leadership of the Los Angeles County Real Estate Investors Association in 2017 from the late Phyllis Rockower. Lloyd is an author, real estate investor, mentor, public speaker, and landlord. He is the also the author of four real estate reference books, including “Stop Foreclosure in California” (Nolo Press), “Stop Foreclosure Now” (American Management Association), “Foreclosure Investing” (Regency Books), and “Flipping Houses” (Regency Books). The Los Angeles County Real Estate Investors Association is the oldest (1996) and largest investor group in California. In his role as President, Lloyd is busy expanding LAC-REIA’s events and programs for members and real estate investors. For more information, visit www.LARealEstateInvestors.com