It became crystal clear by the age of 25 that she wasn’t going to reach millionaire status by living paycheck to paycheck. She made an executive decision to ditch her blue-collar position as a materials coordinator with Johnson Controls, and take the reins to control her financial destiny. She purchased her first real estate property for $18,000 and turned a profit of $24,000. Since 2002, she has purchased, renovated, and sold more than 600 properties, totaling $50 million in sales. But everything wasn’t all roses in her quest for success. In fact, she served two years in federal prison for mortgage fraud in 2014 and allowed the temporary setback to redefine her life from Indicted to Ignited.
Today, Annetta Powell continues to break barriers by teaching and training hundreds on how to build wealth through real estate investing. Three effective techniques she uses are Wholesaling, Flipping Property and Landlording. We recently caught up with the real estate mogul to talk about how to break into the market through wholesaling.
Real estate wholesaling is where an individual, or wholesaler, acquires a contract from the seller of a property and then assigns that contract to an end buyer. In other words, a wholesaler is a middleman. Wholesaling is an excellent way to break into real estate investing and considered one of the best short-term investment strategies. The key to success is being able to identify properties being sold under market value and the ability to sell the contract to another buyer. You would earn a wholesaling fee in exchange for finding a valuable property.
Powell believes that the most effective wholesalers possess the following traits:
Creativity – Basically, you must have a vision for the property. The ability to look at potential deals and see their upside potential. You must be willing to go where others won’t dare. It’s not enough to see things just as they are, you need to go above and beyond and think creatively – that’s when you’ll be able to find the real profitable deals.
Persistence – If you’ll give up the first time something doesn’t go your way or if rejection will send you into a tailspin—wholesaling is not for you. Too many “would be” investors fall out of this business because they lack staying power. You have to be willing to put in the work which means sending out marketing materials consistently, making regular phone calls, getting out and physically looking for houses in your market area.
‘People Person’ – Friendliness and kindness will get you a long way in this business. If you take the time to really talk to and care about people, it dramatically increases their likeliness to do business with you. Show up differently. It doesn’t matter if the world seems “ticked-off” about any and everything, you can choose not to be. Become a people magnet, who loves life (in spite of) and genuinely enjoys being around and servicing people.
Good Negotiator – The truth is we all negotiate for something every day in our lives – it would be with family members or co-workers or strangers. The successful wholesaler understands how important good negotiation skills are to his or her success. By being able to negotiate effectively you will be able to craft better and better deals where both sides are happy – and even more likely to do business with you again in the future.
Annetta shares exactly the top (3) three benefits afforded through wholesaling:
EARN PROFITS IN LESS TIME. This can be accomplished over the other real estate investing methods. If you do your due diligence and educate yourself on the wholesaling process, this can be a very lucrative business. Wholesaling is especially great for beginners because it requires little to no money or experience. All you need to do is find a good deal. When you do, don’t be afraid to offer a relatively low price because chances are the owners are desperate to sell. Then if your offer is accepted, you could close the deal and receive your check within 30 to 45 days or less.
So how does it work? Let’s look at a typical deal of the profit potential that comes with wholesaling. You find a property that you know is worth at least $200,000 after repairs. You offer $100,000 and put the property under contract. Then you find a buyer who is willing to pay $125,000 – so you close the deal. Boom, you just made a cool $25,000! Both you and your buyer benefit from the deal – and the seller gets rid of the property quickly. Win-win-win! With deals like this, they may be eager to work with you again.
GAIN REAL ESTATE INVESTING EXPERIENCE QUICKLY. Wholesaling is beautiful for beginning investors because they gain a lot of industry experience in a short time and without having to spend lots of money. Few investing techniques are better for helping investors learn such valuable skills as marketing, negotiating, organizing, and acquiring proper legal documentation. All these skills will carry over into other investing techniques and will benefit you in the future as you further your career. Complete a few wholesale deals and you will truly understand what to look for in deals and what to avoid.
GET STARTED WITH NO CASH AND EVEN BAD CREDIT. If you want to invest in real estate but thought a low credit score or limited capital would prevent you – it’s time to think again. Wholesaling makes it easy to invest in real estate even if you have bad credit and no cash. The reason is because you are not actually the one purchasing the real estate – that’s the end buyer. You are merely the “middleman” who is facilitating the deal. The end buyer is the one who will have to undergo the credit check. Here’s another big benefit of wholesaling – you can often put as little as $500 down to place a property under contract. Another scenario is to use the buyer’s earnest money deposit and give it to the seller they are buying the property from, and it’s zero cost to you. This seriously mitigates your personal risk if a deal falls through.
Start changing your financial trajectory today by learning how to build wealth. Grab Annetta’s guide “Learn the Hardcore Facts About Wholesaling” and discover how easy it is to get started with “10 Ways to Invest in Real Estate With No Money in the Bank.” Join The Wealth Connect, a network that teaches entrepreneurs how to build their business and produce wealth with multiple streams of income. In addition, Wealth Connect Live is an annual seminar designed to provide a clear road map to master entrepreneurship.
Featured Image by Oh Studioz Photography