Make Quick Cash Profits
|"Reading this article, word for word, could catapult you|
into a business worth thousands of dollars to you each
and every year for the rest of your life..."
Hold onto your hats because what I have to say could literally change your life.
My name is Scott Britton. Maybe you know me or have heard of me. I'm a real estate investor. At least that's what I used to call myself. Now, I prefer to be called a real estate entrepreneur.
You see, it doesn't take long to realize that investing in real estate can make you a wealthy person. We all know that. However, what's not so clear is how to make a living investing in real estate.
Real Estate is like a three legged stool.
One leg of the stool represents wealth building. That is, buying and holding real estate for the long term.
The second leg represents cash flow, the rental income that a property can produce.
And the third leg represents cash. Good old lump sum cash! The money that you receive when you buy and sell real estate.
In the over all scheme of things, you need all three legs on the stool for your real estate program to be self-sufficient. So… what's the problem?
The problem is this. Real estate investors get so hung up on wealth building and cash flow that they inevitably forget to concentrate on generating lump sums of cash. Cash that you need to pay the bills, put a roof over your head, put food on your table and support your lifestyle...
Truth be known, none of us (and that includes me) should be involved with wealth building or rental real estate until we learn how to consistently earn enough cash to provide for our lifestyles and have enough left over to invest.
CASH IN DAYS
There is only one way to make lump sums of cash in real estate. Buying and Selling. Sounds simple doesn't it? It is when you understand the game. Let me explain...
You've all heard the old saying "Buy Low, Sell High". That saying has been thrown around for years as a way to make money in just about any business. We've all heard it so much we hardly pay it any attention. That's about to change.
There are two ways to make lump sums of cash buying and selling real estate. I call them Wholesaling and Retailing. Retailing is the old "Buy Low, Sell High" game. Retailing yields the most profit potential per transaction but also requires the most time and money (and the most work, too!).
The other is Wholesaling. This method could easily be referred to as "Buy Low, Sell Low". Wholesaling doesn't have as much profit potential as retailing, but requires less time and money. Some people refer to this method as "Flipping" because these deals can be done so fast!
$2,000 - $5,000 - $10,000 FAST
In my opinion, every Real Estate Entrepreneur should have a buy/sell program going all the time. Retailing is not that hard to learn, but to me it's a lot of work! Don't get me wrong, I usually have one or two retail projects going all the time, but what I really like is ... Wholesaling!
Wholesaling can bring you lumps sums of cash fast. In days, not months. (And sometimes in hours). Need cash fast? Learn the ins and outs of wholesaling. Once you get a taste of this kind of action you'll slap yourself in the head and say "Why haven't I been doing this all along?"
Here's what it takes to get started wholesaling. Find out what people want and then help them get it! Sounds simple enough. Let me put it another way. Don't try to sell refrigerators to the Eskimos. Go for the easy ones. The gimmes. Help them get what they already want.
For wholesaling to work for you, you need to establish "relationships". Talk to people, find out what they are interested in buying. I like to refer to this as inventorying. I don't even know if that's a real word, but it describes the process.
Let me give you an example. I have a good friend. Let's call him Wally (I'll talk more about him later). He's in the business of buying and renting houses. He's ambitious. He's smart. He's focused. He's aggressive. (And now he owes me five bucks for saying something nice about him.)
Anyway... he's in the marketplace actively buying real estate every single day. He wants to buy real estate deals. He makes money buying real estate deals. So why not…
SELL WALLY SOME REAL ESTATE DEALS
In order to sell Wally something, find out what Wally wants. What areas of town does he prefer? Under what price and terms? What does he consider a good deal? Can he pay "All Cash? Close quickly? What's he going to be doing with the property after he buys? What has he bought in the past? Establish a relationship with him. Inventory his needs and wants.
You see, I don't want to own all of the same stuff Wally does. And he doesn't buy all of the same stuff that I do. We're all a little bit different. (You can say that again...) We're all a little bit different. (There, I said it.)
And even if we weren't different, it would still be O.K. because sometimes I need to raise cash. And so does Wally. And sometimes I find more good deals that I can physically, emotionally, or financially handle. And so does Wally. Sometimes I just don't have time. And sometimes he doesn't either. Any of this ever happen to you? Sure it has.
Admit it. Under some set of conditions, you become a Buyer. And under some other set of conditions we all become Sellers. It's just human nature.
Does Wally care that I make a profit if I can help him get what he wants? No! He doesn't. In fact, he wants me to make a profit. Why? Because he wants me to continue to help him. Does Wally have to like and trust me? Absolutely! If he doesn't, nothing will ever happen. It's called building relationships. It's the key to quick cash profits wholesaling real estate.
O.K., want to learn more? Good!
First of all a warning... If you don't listen to anything else I say, you gotta listen to this! Not everybody is capable of learning to Wholesale Real Estate. I'm not kidding. Even perfectly smart, seemingly mature investors don't seem to get it. You can tell 'em and tell 'em and tell 'em, until your blue in the face and they still won't get it. Don't you fall into this trap.
Here's the problem. Most investors can't or don't locate enough good deals. When they find a good deal, they wouldn't sell it for Retail, let alone Wholesale. I suppose they think that they'll never be able to find enough good deals to satisfy their cravings. Or, they think they can actually handle all of the good deals that come their way. And you want to know something else…
I used to think that way too!
Two things happened that had a major impact on my thinking. First of all, I found that once you learn the right way to prospect for the really good deals, it becomes impossible to buy them all. When you really learn how to crank up your buying machine (which, by the way, you should have cranked up all of the time) your thinking will eventually change too.
Secondly, I had the opportunity to watch and learn from other Investors, many of whom went bankrupt (some more than once!) Their mode of operation was this...
They would buy every deal they could find. Their purchase criteria was simple. If the bank would lend them more money on the property than they had agreed to pay, it became an automatic good deal.
You see, they considered that extra money that they put into their pocket as profit. And since they made an instant profit (at least in their minds) on every deal that they purchased, they only purchased and never sold. (The Trustee in Bankruptcy sold whatever hadn't already been sold at Foreclosure Sale)
Although they helped to teach me, they never learned my
#1 undeniable truth of Real Estate Investing... "Borrowed money is not profit"
Borrowed money is a liability. Plain and simple. Don't build your lifestyle on borrowed money. It doesn't make for a good foundation.
The safest way to make a profit is to "BUY YOUR PROFIT". When you buy and pay for your profit, you know it's yours. And once you learn to buy your profit, you will be building your financial future on a firm foundation.
Just to make sure I haven't confused you, here is how you "BUY YOUR PROFIT". When you pay a dollar for an item and turn around and sell it for $1.50, you have just bought yourself a fifty cent profit. You "BUY YOUR PROFIT" by paying for it with something that is worth more than your cost.
There is no liability associated with a true profit. Think about that for a second. Aren't we all really trying to increase our assets and reduce our liabilities and thereby increasing our net worth (and hopefully our lifestyles as well).
That's what Wholesaling can do for you!
Learn to crank up you buying machine. Inventory other investor's wants and needs. And at the same time sell them on the benefits of you becoming a bird dog for them. (Suppose I could bring you a deal as good as, or better than, you usually buy... is their any reason why you wouldn't want to buy it?)
Don't be greedy when Wholesaling. Sell your deals to the highest and best bidder, but remember... you must leave plenty of profit potential in the deal for it to remain attractive to other investors.
And above all else, learn who you can and can't do business with. The truth of the matter is, you can't do business with everyone. Don't beat yourself up over that fact. Accept it, and go on down the road. There are plenty of people that you can do business with.
Well, that's just the tip of the iceberg on Wholesaling Real Estate, but I hope you get the general idea. Go out and give it a try. I think that you'll find that it's chock-full of benefits for everyone involved. And who knows, you might even make some new financial friends along the way. (as well as a few thousand extra greenbacks!)
|Scott Britton, author and publisher of the “University of Real Estate Letter” is an active, full time Investor who has been successfully buying, selling and investing in Single Family Houses and Mortgages since 1979. Beginners and seasoned pros alike have profited from his down to earth, common sense investment advice. Scott is known for his clear thinking and problem solving abilities. His strategies for generating cash while building wealth, can help anyone accelerate their investment program while improving their lifestyle. Scott, along with his wife Cindy and their three children, live and work out of their high-tech, low-cost home office in historic Jackson, Mississippi, where he practices what he preaches on a daily basis. |
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without the express written permission of the Author and/or REIClub.com.
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