there were three key aspects from which I learned and which prepared me well for where I took my business. First, it helped me look at residen- tial real estate from an investment perspective versus an owner-occupied perspective. I had purchased several houses for myself and my family over the years, but when I went to buy my first rental property, I realized you look at houses very differently when it’s an investment. Second, buying my first rental taught me how to navigate the financial math- ematics of investment properties. Or more importantly, “How am I going to buy a property and get it to cash-flow?” Then finally, starting with rental real estate helped me build a critical network of partners that I still use and leverage today. Buying that first rental property enabled me to seek out and find a good lender as well as good contractors—painters, electricians and plumbers. It helped me find a good in- surance provider for rental real estate. It helped me identify a good Realtor or two who knew rental real estate and could help me buy these properties and even help me rent these properties. So buying that first rental property and focusing on that niche as my initial step into investing benefited me on multiple fronts. ON TO THE SECOND PHASE: REHABS Then, that first phase set me up for the second phase of my real estate investing business: moving into rehab properties. These are much more time-consuming, as they are much more involved and a more active type of investing. Rehabs also are a lot more fun and exciting, and the gains are more short-term, whereas gains in rental investing are long-term. As I moved into rehabbing properties, in addition to continuing to rent out properties, I was able to leverage the expertise I gained from buying that first rental property. Except, in order to make a profit after fixing them up and selling them, I had to buy those rehab prop-
and that rehab background because now I was selling residential real estate to other landlords and other rehab- bers. I drew on my own experience as a landlord and as a rehabber. That experience I had was critical because I knew what my customers wanted— what my investors were looking for— because I had done it. I could market properties successfully to them at attractive prices that allowed them to accomplish their investing goals. BUILDING A NETWORK TAKES TIME Another aspect of wholesaling, which I did not really encounter when I was renting properties or rehab- bing them, is that I was now heavily engaged in real estate investment clubs and networking with other investors. This is a critical element to being successful at wholesale real estate in- vesting. This is one of the reasons you cannot dive into wholesale real estate investing right away. It takes time to build a network of in- vestors who trust you and can count on
erties at an even bigger discount than I would if I were buying a rental property for cash flow purposes. So my skills as a rental buyer were honed as I became a rehab property buyer. I also leveraged all that network of partners I mentioned earlier as I moved on and started buying and re- habbing properties. And what I learned in this phase of my business was how to sell properties versus rent properties. And that was a whole new world. But my background in renting and leasing properties provided a great platform to help me as I moved into rehabbing and retailing, or selling, properties. Over the course of several years, I moved into wholesale property invest- ment. Now, this is the quickest—and some may say the easiest—way to make quick cash and quick profit in real estate. It’s very exciting, very enticing. And it is a whole different world when it comes to real estate investing. This particular area is not for the novice, for several reasons. For starters, you have to have access to residential real estate at deeply dis- counted prices. When you are a whole- sale real estate investor, you are buying and ultimately selling properties to other investors. In order for those properties to appeal to other investors, you have to market them at very attractive pricing. That means
you have to buy them at even more attractive prices. You have to leave enough “meat on the bone,” so to speak, to allow your investors to buy those properties from you and still have a healthy margin for them to turn around and rent them out and cash-flow them. Or to turn around and rehab them and make a nice profit on the retail market. This may indicate to you why I waited last to enter into the wholesale end of residential
real estate. I needed the experience, the network and the knowledge. I leveraged that rental background
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