How To Start Wholesaling Real Estate With No Money

Summary

The script discusses the real estate wholesaling strategy, focusing on identifying undervalued properties through 'driving for dollars' and door knocking. It emphasizes looking for distressed or unwanted properties with motivated sellers. The process involves scouting neighborhoods for properties that stand out as neglected, documenting the findings, and researching the property owners through local appraisal districts. The aim is to secure these properties at a low cost and sell them to investors for potential flipping or holding.

Takeaways

• 🏘️ Wholesaling involves buying real estate at a lower price than its market value and selling it to another investor, often referred to as 'wholetail' in this context.
• 🔍 The primary goal is to find unwanted properties with motivated sellers who are willing to sell below market value.
• 💰 Starting as a wholesaler without money involves techniques like 'driving for dollars' and door knocking to identify potential properties.
• 📍 New real estate investors are advised to stay close to their area of knowledge, especially for their first deal, to increase the chances of finding good deals.
• 🚗 'Driving for dollars' is a method where investors drive through neighborhoods looking for distressed properties that stand out from well-maintained ones.
• 📝 Signs of a distressed property can include overgrown lawns, trash in the yard, door hangers, business cards, or a general state of disrepair.
• 👻 A distressed property is often described as one that looks 'haunted' or neglected, standing out as worse than the surrounding houses.
• 📱 When driving for dollars, it's important to document the addresses of potential properties by writing them down, taking photos, or using apps to keep track.
• 🔑 After identifying potential properties, the next step is to find out who owns them, which can usually be done through the county appraisal district's website.
• 🏡 The county appraisal district provides information about the property, including the owner, tax value, square footage, and the last time it was sold.
• 📊 Texas, being a non-disclosure state, does not readily provide sold data to the public, but certain websites or real estate professionals can access this information.

Q & A

What is wholesaling in real estate?

Wholesaling in real estate involves finding a property, purchasing it for less than its market value, and then selling it to another investor, often referred to as a 'flip' or 'hold', depending on the buyer's intention.

Why is it important to find an unwanted or distressed property?

Unwanted or distressed properties are typically under market value and can be acquired at a lower cost, allowing the wholesaler to sell it for a profit to an investor who may fix it up or resell it.

What is the term 'driving for dollars' in real estate investing?

'Driving for dollars' refers to the practice of driving around neighborhoods looking for distressed properties that may be good candidates for investment, such as those with overgrown lawns, boarded-up windows, or other signs of neglect.

How can one identify a distressed property?

Distressed properties can be identified by signs such as overgrown lawns, trash in the yard, newspapers piling up, door hangers, business cards, vacant houses, broken down cars, and overall poor condition compared to other houses in the neighborhood.

Why is it recommended for new real estate investors to stay close to where they know?

Staying close to familiar areas can help new investors better understand the local market, making it easier to find deals and navigate the investment process without getting overwhelmed.

What is the significance of documenting the properties found during 'driving for dollars'?

Documenting the properties, such as writing down the address or taking a photo, helps investors keep track of potential leads and remember details about each property, which can be useful when contacting the owner or assessing the property's condition.

How can one find out the owner of a property without spending money?

One can find out the owner of a property by visiting the county appraisal district's website, where they can enter the property address to get information about the owner, property details, and tax value.

What is the term 'non-disclosure state' and how does it relate to real estate?

A 'non-disclosure state' is a state where sold property data is not publicly disclosed. This means that information about the sale price and date is not readily available unless accessed through specific real estate services or MLS access.

Why is it beneficial to personalize communication with property owners?

Personalizing communication with property owners can make the interaction more engaging and memorable. It allows the investor to show genuine interest in the property and can help establish trust, potentially leading to a successful negotiation.

What are some free or low-cost methods for real estate investing as a beginner?

Some low-cost methods include 'driving for dollars' to find distressed properties, using free apps for documentation, and leveraging free resources like the county appraisal district's website to find property owners.

How can one keep track of the properties they are interested in without spending extra money?

One can keep track of interested properties by jotting down addresses, taking photos, sending themselves emails with property details, or using free apps designed for this purpose, ensuring they don't repeat areas and maintain an organized list.

Outlines

00:00

🏘️ Real Estate Wholesaling and Finding Distressed Properties

This paragraph discusses the concept of wholesaling in real estate, where investors locate undervalued properties, typically unwanted or distressed, and sell them to other investors for a profit. The speaker emphasizes the importance of identifying motivated sellers and properties that are under market value. The method of 'driving for dollars' is introduced as a way to scout for such properties by driving around neighborhoods looking for signs of neglect or vacancy. The paragraph also touches on the idea that even with no money, one can start in real estate by using this method, and it provides examples of what to look for in distressed properties, such as overgrown lawns, newspapers, door hangers, business cards, and other signs of neglect.

05:00

📝 Documenting Distressed Properties During Driving for Dollars

The second paragraph continues the discussion on the 'driving for dollars' strategy, focusing on the importance of documenting potential real estate opportunities. It advises keeping track of the areas driven to avoid repetition and suggests writing down or emailing oneself the addresses of distressed properties, along with taking photos for reference. The paragraph also mentions the utility of having a visual record for later conversations with property owners, which can make the communication more personal. It briefly touches on the use of apps for this purpose and mentions a specific app in beta, 'propello,' designed to assist in the driving for dollars process. The paragraph concludes with the idea of compiling a comprehensive list of potential properties and the next steps of identifying the owners of these properties.

10:09

🔍 Identifying Property Owners and Using County Appraisal Data

This paragraph, although incomplete, begins to explain the process of identifying the owners of the distressed properties found during the driving for dollars exercise. It suggests using the county appraisal district's resources to find out property ownership details, including the owner's name and address, property characteristics, tax information, and the last known sale date. The paragraph also mentions that in Texas, property sale data is not publicly disclosed, but it can be accessed through certain real estate platforms or through a realtor with MLS access. The focus is on utilizing public records to gather information about the properties and their owners to proceed with potential investment opportunities.

Keywords

💡Wholesaling

Wholesaling in real estate refers to the process of buying properties at a lower price than their market value and then selling them to another investor or 'flipper' for a profit. It is a key concept in the video, illustrating a method for making money without having to renovate or manage the property oneself. The script mentions finding undervalued properties and selling them to motivated buyers who may decide to flip or hold the property.

💡Unwanted Property

An unwanted property is a real estate asset that the owner is eager to sell, often due to disinterest, financial strain, or the property being in a state of disrepair. In the video, the concept is integral as it discusses targeting such properties to purchase at a discount, which is a common strategy in wholesaling.

💡Motivated Seller

A motivated seller is a property owner who is willing to sell quickly, often at a reduced price, due to various personal or financial reasons. The video emphasizes the importance of identifying motivated sellers to negotiate a deal that allows for profit when reselling the property.

💡Driving for Dollars

Driving for dollars is a strategy used by real estate investors to identify potential investment properties by driving through neighborhoods and looking for signs of distressed or neglected properties. The script describes this method as a way to find properties that are visually out of place or in poor condition, which might indicate a motivated seller.

💡Distressed Property

A distressed property is a real estate asset that is in need of repair or maintenance and is often sold at a reduced price. The video explains how to identify such properties by looking for signs like overgrown lawns, broken windows, or boarded-up entrances, which suggest the owner may be motivated to sell.

💡Vacant House

A vacant house is an empty property that is not currently occupied. In the context of the video, vacant houses are considered prime candidates for wholesaling because the lack of occupants can indicate disinterest or inability to maintain the property, potentially leading to a motivated seller.

💡Non-disclosure State

A non-disclosure state is a jurisdiction where certain information about real estate transactions, such as sale prices, is not publicly disclosed. The video mentions Texas as an example, where sold data is not available to the public unless through specific real estate services or access.

💡County Appraisal District

The county appraisal district is a local government entity responsible for assessing property values for taxation purposes. The video describes using the county appraisal district's resources to find out ownership and property details, which is crucial for identifying potential wholesaling opportunities.

💡Homestead Address

A homestead address is the legal residence of a property owner, which may differ from the property's address if the owner does not live there. The script mentions that the homestead address can be found through the county appraisal district and is important for contacting the owner of a potential wholesaling property.

💡MLS Access

MLS, or Multiple Listing Service, is a database used by real estate professionals to access detailed information about properties for sale. The video briefly touches on the idea that having MLS access can provide valuable data on property sales, which can be useful for real estate investors.

💡Propello

Propello is mentioned in the video as a service or platform that provides real estate data, including sold data which is not typically available in non-disclosure states. It is highlighted as a resource that can assist investors in their research and analysis of potential properties.

Highlights

Wholesaling involves buying real estate at a lower price than its market value and selling it to another investor.

The target property for wholesaling is typically unwanted and has a motivated seller.

Wholesalers can operate with no money initially, utilizing strategies like driving for dollars and door knocking.

Driving for dollars involves scouting neighborhoods for distressed properties.

Distressed properties may appear dirty, neglected, or have signs of vacancy.

Vacant houses are often a good indicator of potential distressed properties.

Signs of a distressed property can include overgrown lawns, broken cars, or tarps on the roof.

Wholesaling is about finding properties that stand out as worse than others in the neighborhood.

Documenting the properties found during driving for dollars is crucial for follow-up.

There are apps available to help document properties during driving for dollars.

The goal of driving for dollars is to find properties with potential without spending much money.

Identifying the owner of a property can be done through the county appraisal district.

Texas is a non-disclosure state, meaning sold data is not publicly available without specific access.

The tax appraisal can provide details about the property, including tax value and owner information.

Driving for dollars can be done casually, such as while running errands or visiting friends.

The process of wholesaling real estate can be a cost-effective way to start in the industry.

Wholesaling can be an effective strategy for new real estate investors to gain experience.

Transcripts

so wholesaling is where you are going to

go find a piece of real estate and you

are going to buy it for less money than

what it's actually worth and what you

can sell it for to another investor most

likely U you know we're talking about

wholetail but y not in this instance so

basically you're looking for an unwanted

property a motivated seller that you can

get that property under market value and

then sell it to a buyer who's willing to

go on and either flip it hold it

whatever they decide to do with it right

you're looking for that unwanted

unwanted property motivated seller right

so now it becomes you have no money you

know when you get to be an experienced

wholesaler and you're bigger yeah

there's a lot of things at your disposal

if you have money to spend but when you

have no money how do you do it and

number one way driving for dollars and

door knocking yes so

number one thing you want to start doing

is figuring out where you want this

property to be and you know I always

tell new Real Estate Investors stay

close to where you know stay close you

know especially for your first deal when

you're starting out agreed um and there

are deals everywhere you just have to

find them yep well and just for those of

you since we're kind of doing the

beginner course those of you that don't

know what driving for dollars is we use

that term all the time but driving for

dollars is where your just driving

neighborhoods up and down streets and

you're looking for properties that look

distressed you can do this commercial

you can do this residential you're just

looking for distressed properties and so

what makes a property

distressed good very good question and

it depends that's the answer that seems

to be across the board so everybody has

like their little thing that they go out

and look for um it used to be newspapers

for me you know like 10 15 years ago if

you were driving by and you saw like

trash in the yard or newspaper and trash

still works yeah um but I like you know

if people put like a bunch of door

hangers on stuff or they you know some

people will put business cards and you

see a bunch of that um so that typically

would indicate like maybe somebody

doesn't live there correct that's a

vacant house yeah and so that means okay

vacant house those people don't live

there they're not taking care of it they

may not want it right you know they may

want be looking for a way to to offload

that on somebody but they don't even

know where to start cuz they know that

your typical buyer isn't going to cut

they can't just put it on the market

because it looks like crud and they

don't have the money to fix it so that's

that is a great great tip as far as

looking for vacant houses vacant houses

are great I mean and then distressed I

mean bushes number one yeah yeah not the

lawn's 2 feet tall right um there's a

broken down car on in the driveway or on

the side of the house you know up on

blocks yeah up on yeah up on block like

cinder blocks and cars there and not all

of them I mean maybe maybe that was

somebody that just got just got jacked

but um anyway I mean it's just a it's it

depends on the neighborhood at but if it

looks worse than the rest of the houses

in the neighborhood then that's what we

would consider distressed Andre the best

way that I could probably describe it

would be it's that house that you always

ran past when you were a little kid

because it looks like the house that's

haunted yeah yeah got it all right so I

mean if that house scares you they're

like what's what's up with that house

there you know and you knew it you know

you were like do we even go up at

trick-or treat at this house no like you

would like go yeah we're just going to

buy P this you know sketchy house I

always love it you know they usually

have like a lot of you know it just

looks dirty yeah yeah just looks dirty

for dirty and scary like a witch lives

there that's the house you want to get

yeah

exactly so you know yes it just depends

yes you there are telltale signs but

basically just drive that neighborhood

and whatever doesn't look like which of

these doesn't look like the others you

know absolutely then that's the one

it'll it'll stick out yeah it absolutely

will and I mean if you're driving a

street and everything is really nicely

kept and then you get to one and it's

obviously haven't mowed their lawn

forever and the bushes you can't even

see like a third of a house cuz it's

covered in bushes yep and it needs you

know there's wood trim hanging down you

know that's a big one and and even if

it's not a nicely manicured neighborhood

it's still going to look different it's

going to look worse than the others you

know so if you're in a neighborhood that

is like a like economically not as nice

you know it's it's just a distressed

neighborhood yeah it's a dist there's

going to be that there's going to be

that those few houses that are

definitely more distressed than the rest

so that's it's really by comparison

whenever you're driving you know and and

another thing I mean we this is kind of

hard especially in spring for North

Texas but depending on where you're at

if you see like tarps on a roof and

there hasn't been a real storm for a

while yeah there's an indicator there's

an indicator that maybe maybe they

didn't have the money to fix it or maybe

they took that money yeah and didn't fix

it something else exactly and now they

can't and so they might want to sell it

with with just that so y so those are

the different ways to like drive for

dollars um and when you're driving for

dollars you want to keep track of where

you're driving so you're not like

repeating you know streets and

neighborhoods and kind of driving in

circles so kind of keep track of that

and whenever you come across something

that is a little distressed or more

distressed uh you write the address down

write it down take a picture of it so

you remember it because they all start

to blend in after a while

um and it's also good to picture of it

because as we talk later about contac

living or not living there um but the

owner then you can you

can make it more whatever your

conversation whether it's email uh

letters or a phone conversation you can

actually go back to the house and make

it a little more personal because now I

see the house and I can go oh I like the

shutters that may be the only freaking

thing that that looks decent on the

house but hey nice shutters you exactly

um but anyway so you're driving for

dollars you write down those properties

and um and and I I think it is important

to write them down you know sometimes

people put notes or send themselves like

I for a while you know I was sending

myself emails so I just get on my phone

take a photo yep and put it into an

email with you know the address but you

know if you're time press you know just

just jotting down just jotting down the

address just make sure you're not going

oh I'm gonna remember this and like drop

a pin on a map or something like that

yeah you definitely want want to

document it and there's different apps

for that and just to plug propello that

we have one out in beta right now and

that D driving for dollar app will

hopefully it's coming when I think it's

coming in the next month or so right um

I'm not for sure I just know it's out

there on beta they're making some tweaks

or whatever but that option is out there

as well so there are apps but we're

trying to show you how to do this on a

dime and I mean cuz this is free so for

the cost of some gas money um that's I

mean that's our goal with this you know

yes there are tons of things that you

can pay for um and there's some things

that are worth it and some things you

need and some things that you can do

without but yeah our goal is to go all

right you're a teenager you have no

money literally no money how do you get

this done yeah and so I mean you've

driven you're looking for parking or

you're driving around you know visiting

some friends at the dorms a lot of those

dorms at UTA are right next to well you

know and that's the greatest and that's

the greatest thing because it doesn't

have to be all it doesn't have to be

like Oh I'm going to do this for two

hours it can be you're on your way

someplace yeah especially just looking

around UTA I mean a lot of the

neighborhoods are really close together

so it should be a really short amount of

time just to go through and look real

quick yeah like right after you get done

with school I mean obviously she's not

in school for summer so she'll be doing

it she'll have a lot more time to do it

uh here over the next few weeks

but yeah okay so now we've got a good

list Yeah so basically you get your good

list and um once you have your list

together then you've got to figure out

okay who are these people yeah how do I

who owns this who how do we do that so

um so basically the easiest way to do

that and um this is pretty much

Nationwide you can go to the appraisal

district whatever your County appraisal

district is put in that address and

it'll populate who the owner is and if

the owner doesn't live there and they

have a different forwarding address a

different Homestead address it'll have

that address there so it'll it'll give

you that kind of information what the

taxes are um how many bedrooms the

square footage the neighborhood it gives

you all of that um the last time here in

Texas I don't know about other states

but here in Texas it'll tell you the

last time it was sold but Texas is a

non-disclosure State and we'll touch

more on that later um but non-disclosure

State basically means that you're not

putting out any sold data so you can't

get that information unless you're

signed up for uh websites like propello

or you're in with a realtor or you have

MLS access MLS access or mom who's mom

who's a realtor realator yeah um to

analyze those properties but basically

what the tax appraisal will do is you're

pulling up that property it's giving you

some of the details well and it's going

to tell you what the tax value is yes

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