How To Start Wholesaling Real Estate With No Money
Summary
TLDRThe 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
🏘️ 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.
📝 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.
🔍 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.
Mindmap
Keywords
💡Wholesaling
💡Unwanted Property
💡Motivated Seller
💡Driving for Dollars
💡Distressed Property
💡Vacant House
💡Non-disclosure State
💡County Appraisal District
💡Homestead Address
💡MLS Access
💡Propello
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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