Creating cashflow with apartment wholesaling. If you were talking about this with another real estate entrepreneur the conversation would probably revolve around doing more deals. A series of lump sum cash assignment fees occurring more frequently.
This would definitely be the case if you were flipping single family homes. The deals are simpler to do, they don’t take as long. But it’s different with apartment buildings.
Apartment buildings are income property. So 3-6 months after you wholesale a property to a new buyer, that investor (assuming they get straight to work on their turnaround plan) will soon be earning increased amounts of net operating income.
This creates options for you as an apartment wholesaler you don’t really have when flipping houses.
Your edge as an apartment wholesaler is to put extra time, effort, and emphasis on marketing and negotiating in order to assemble a lot of sellers with seeds of motivation in their ownership of the property, that then germinate and grow into a full on crisis that requires rapid liquidation of the property at rock bottom price.
Due to this being all you do, you can afford to put all your time and effort into identifying motivated apartment owners, and following up with them. This is how you get your double discount cash prices, and inordinately favorable (to you) terms for owner financing.
If you’re excited by the potential, but the big question weighing on you is, “how do I get started wholesaling my first apartment building”, don’t worry, this is well trodden territory. You have been snared by an insidious trap, but there is an answer, and a way out.
When it comes to wholesaling apartment buildings, there is more fear involved than wholesaling a house because … well, the numbers are bigger. The asking and selling prices are usually in excess of $500.,000. That’s out of the comfort zone of most beginning wholesalers.
The result is fear. Blind fear. The numbers way exceed your financial experience to this point, and your brain scrambles. It’s easier to look away and go back to where you feel in control.
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And that’s perfectly fine. In fact, it’s more than fine. It’s smart. Start where you are, build experience, and build your confidence. Keep it simple. Flipping houses is a simple process, that you at whatever level you comfort zone currently is.
Start where you are, but get started.
As Dwan Bent-Twyford notes, $10 is all you need to secure a house to flip for $10,000 or more:
To make the contract binding, you have to leave a deposit with the homeowner at the time of signing. We typically leave a $10 deposit. This way, if we are unable to wholesale the property, we are not out a lot of money.
$10! Who would take that? Everyone! When we first started asking homeowners to take a $10 deposit, we thought we’d get kicked out of the house. To our surprise, no one gave us any grief.
If you say it like this: “We typically give a $10 deposit and close in 45 days. That won’t be a problem, will it?” They always say, “Okay.” The only reason a homeowner won’t take $10 is because of the way you present it. Speak with confidence.