Are you beginner and you want to learn how to get into real estate investing? Well, this is the perfect video for you. So stay tuned. By the end of this video, I can promise you that I’m gonna let you know exactly what to do. If you’re a beginner wanting to get into real estate investing, what’s the best avenue for you? Let’s dive right in. Also, on this video, I’m not only going to tell you the best strategies for getting started as a beginner, I’m going to tell you why people get into real estate and is it even worth getting into? So let’s dive right into it. Let’s go.
So why real estate investing? Well, there’s a lot of ways to make money in this life, are you sure you want to get into real estate investing, most people get into real estate investing because they want the financial freedom most millionaires are made from real estate investing or flipping any sort of real estate investing, landlords buying and holding burrs. I mean, these terms might be foreign to you if you’re a beginner.
But basically, there’s so many different ways to get into real estate investing. So you got to understand that your journey as a real estate investor, if you’re a beginner, you really can take many different paths. You can be a real estate agent, you can be a landlord, you can be a property manager, you can get into commercial, you can do many different things. But the path that I took, and the path that I tell people to take is wholesaling. So wholesaling real estate, you can do deals with little to no money, well, actually $0 You don’t need any money to wholesale real estate if you do it the right way. Because you can find a deal with no money. You don’t even need earnest money if you know how to do it the right way. And you don’t never even have to purchase the property.
Okay, so getting into real estate investing, why would people do it? Well, they want to become wealthy, they want to have the freedom, they want the peace of mind, they want to build a legacy. That’s why people get into real estate investing. And with all the different options out there to make money, it’s a great option, it’s a great way to do it just because will to make financial freedom for yourself to achieve that because anyone can do it. You don’t need permission, you don’t need to go to college for it, anybody can do it. So I actually have a video that I broke down. How exactly to start the process of getting in as a beginner. But before I go into that video, I want to invite you to my free masterclass that I do every Thursday, just go to paynelesswholesaling.com, or go to the link below. If you click on it, as you register, it will send you some information, you know, they’ll remind you of the class, it’s gonna be awesome. Honestly, a lot of people that have gone they’ve all had good experiences. And the reason why we do is we just want to help people get into the game, especially I remember when I began, I didn’t really have any help and know what to do. So that’s why we do it.
So register below and we’d love to see you there and it’s live. It’s not just a video that you’re gonna watch like this. That’s why I recommend people to go because right now you’re just watching the video, which is awesome, too. But if you want to ask questions live, that’s where you need to go. So let’s dive in. Like I said, we’re going to dive in and tell you exactly how to start investing as a beginner. And I’m going to lay out the process and some of the things that I would recommend to do as a beginning wholesaler. Let’s dive right in. I have Tehran here, Sarah, what’s going on?
Hey, how’s it going?
Good. Good. All right. So let’s dive right into it. So you said you’re brand new to wholesaling, really green, and you want to start implementing and having the strategy so you can make some more money as a unicorn agent. Right? So let me ask you this, what do you believe is required for it to be a deal at this moment for you to wholesale?
I’m just curious, I want to ask you, the price has to be right, right or have enough money in it in order for everybody to be happy and make a deal?
Do you have an idea of what that is like because a lot of people as they research or wholesaling, they have like sometimes they hear of like a formula. It’s like 70% Minus repairs minus AR, you know, minus your fee is your wholesale price. What have you heard?
I heard now market shift investors are going down to like once they 60 to 70. But I’ve also heard at the end of the day, as long as they can make a 10% return.
Alright, so you’ve heard a lot, right? You might be a little confused. Yes. All right. All right. So let me show you what I do. So you can kind of have a good idea of how to determine like, what your offers what is a deal. So I call it the Payneless Wholesaling method. This is the blueprint, it shows you steps one through 10 on how to get a deal every step of the way. But the way I believe you get started in wholesaling is you have to at first mindset is really important because wholesaling. It’s a rollercoaster ride, especially when it gets started ups and downs. It’s getting deals rolling through. So you have to be prepared mentally to overcome that. So that’s the first thing I tell people.
The second step is picking a market. It’s really important as you wholesale to pick the right market because if you’re in a market that there’s not a lot of activity, a lot of flippers you’re not going to have anyone to sell it to so you got to pick the right market and you can use batch leads while I show people how to use batch leads to pick their market. You can do cool things you can check areas you can pull lists, you can find buyers, let’s just say you were in Flagstaff right? You’d be like oh, can I start wholesaling like a ton of deals in Flagstaff Arizona like Is there enough volume is there enough cash buyers in this area for me to do deals so if right here you can check if you just go to quick filters shows you that there’s quite a bit of cash buyers and that means sales in the last year or so so Flagstaff would be good by the mount you can see says recent cash and hardware any loan purchases of real estate, so they have automatic filters, it’s really easy to determine like if there’s activity if you’re in a major metro, because if you’re in a major metro, I’d say 99% of the time, like there’s activity just because there’s a lot of people living there. If a population is big, that means that there’s a lot of people moving there.
But if you live in a place that’s a little non populated, like 50,000 100,000, that just means there’s less movement, less people moving in and out of the state. That’s like a general rule of thumb. So the next step after picking your area is you want my goal. And what I tell people is do not just automatically or immediately just go start marketing and just calling sellers and trying to get a deal. Because you still are at this point, you’ve picked your market, but you don’t know what people are buying markets differ all over the country.
So you need to be able to understand your market and what people are buying. So the next thing I teach and this is why I call it the Payneless Wholesaling method is I teach you how to network first, to find your cash buyers. Once you understand and have about five to 10 solid relationships, then you can with confidence, go out and start making offers. You can talk to sellers so if you go to my mind map, I show you exactly how to run comps for wholesalers. So there’s some really easy ways to do it. But let’s go to step one. So how to find comps All right, so I use batch leads. I like batch leads a lot because it gives you a good idea of comps you can just type in the address you want. Let’s just look at this one. It gives you an estimated value runs an algorithm right like most of these software’s it tells you an estimate idea so you get a good idea just immediately like okay, what it’s worth even quickly does comparables and it checks a radius within a year square footage. It does all that and it shows you a bunch of different comps.
So that’s a quick way to do comps like immediately is just with bachelor leads. So the next one is Zillow, and then obviously MLS data trumps all it’s the best way to find comps. So that’s how you find the comps. So you want to determine the ARV after you find comps in order to start the process of like, okay, what is a good deal? You need to find out what is this house I’m looking at? What is it worth if it’s at the top of the market, right or it’s fully flipped. So the best thing to do is find flip comparables. If you’re just finding a bunch of homes that haven’t been flipped, it’s going to be difficult to determine what it’s going to be worth if a flipper goes in there and makes it really nice. Do your best to find comparables.
The next thing that’s important after finding the ARV, so let’s just say for example, ARV you find a house that’s worth 200. And you know, it’s worth 300. So that’s the ARV is 300. Now you got to determine Okay, they’re giving it to me at 200. But how much repairs does someone need to put into it to get it up to 300,000? Right, here’s some questions to ask. So this says, are you working with a seller virtually? Or are you working with someone your backyard this tells you how to navigate if it’s virtual, what questions to ask and how to get pictures. So this is the easiest way to determine a lie average or heavy repairs. So is the square footage of a house for examples. 1000 square feet times the cost of the light. If it’s light, it’s $18 per square foot, if its average is 24. Or if it’s heavy, which means down to the studs, you got to do the whole thing. It’s 40 equals your rehab costs. So for example, if you have 1000 square foot house that just needs carpet paint probably going to cost $18,000 Because you’re doing 1000 square feet times $18. Very easy.
Didn’t need to go dive in deep into like a full rehab estimate spreadsheet. I just need to know square footage. Is it light, average or heavy? And if you’re like, Well, what makes something light Nathan? Well, right here if you don’t have to touch the cabinets or the bathrooms, and all you got to do is carpet, tile, paint, carpet, or flooring, it’s usually light to light rehab. If you have to start venturing into bathrooms and cabinets and kitchens, then you’re talking an average rehab, if you’ve got to do everything from a good job, we’re talking windows, everything, it’s 40. And that’s like a good job.
And these are average numbers, right? It could go up, it could be lower, but I would say 4024 and 18 are good. So if you’re talking to a seller and you’re like, hey, you know, I’m interested in buying your house and tell me a little bit about the property. You’re like, has the kitchen been updated in the last five years? No, it hasn’t. Okay, how about the bathrooms have the bathroom has been updated in the last five or 10 years? Yeah, we just updated last year. Okay, so I don’t have to worry about the bathrooms. Right then you’re like okay, kitchen. Yes, bathrooms? No, those are okay, and carpet and paint. So you’re right in between like an 18 to 24 because you’re not having to do the bathroom.
So again, really easy to determine what you need to get a property for ARV What is this property worth flipped? How much do my repairs need to be? Now we’ve gone over both you’ve looked at flip comparables, you know that it’s worth 300, you know that this house in this example is 1000 square feet, it needs $24 per square foot and this example $24,000 rehab, so you have the rehab and you have the ARV now, okay, so that’s two parts of the formula.
And then now you calculate your offer that you can buy that and the way I do it is depending on if I’m talking to an analytical buyer, or seller, I sometimes even show them my rehab calculations and be like, Hey, this is why I have to be here because I gotta make some money but determining everything we talked about, I can resell for 300 I gotta put in 24,000 I need to make 20 $50,000 I hope you understand I’m a bit In this I sometimes walk people through my numbers so they understand why my offers $150,000 less than what they believe their house is worth. This is the quickest way to determine if you’re talking to a motivated seller is forget all this noise all the stuff I just showed you look up someone’s house on Zillow and offer them 50% of their estimate.
That’s the easiest way to determine if you have a deal because if someone doesn’t get off the phone with you, then obviously you have someone that you can work with. Right. Another quick way to do it is 70% of the ARV. All you do is you find the ARV you could do this formula. So let’s say the house is worth 300,000 You say okay 70% of that minus we talked about $24,000 in repairs minus my wholesale fee, I want to make $15,000 171 If I offered 171 to the seller, and they except I’m going to make at least $15,000 the flipper will have his costs of 24,000 in there and then the profit expenses of the hard money all that stuff is calculated in the 70%. That’s what the 70% is the 70% includes the 6% and commissions and fees for relisting it it also includes the closing costs the profit so one thing that everyone needs to know that’s watching this is Do not waste your time running comps on a property where you don’t have the seller on the phone complete waste of time.
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