Many self-acclaimed real estate gurus state that everyone should quit their jobs and immediately jump into full time real estate investing. They often claim incredible results from students with little experience. We would like to caution that life-changing decisions are not usually simple and that full time investing is not for everyone. Let’s discuss some pros and cons of full-time versus part-time investing.The Full-Time InvestorEntering into the real estate profession on a full-time basis offers several advantages over a part-time commitment. Being successful requires you to develop knowledge in many aspects of real estate, and more time focused on real estate leads to greater knowledge. The more your learn, the more you earn, since you do not need to rely on as many professional services or partners for help. You also learn to recognize a deal (or a dud) faster, which gives you more time to do more business or spend with your family.As a full-time investor, you work your own hours. When we say “full-time,” that may mean as little as twenty hours per week if you are good at finding deals. The rest of your time can be spent pursuing other vocations or hobbies. Or, if you are so inspired, you can work forty or more hours and use the extra cash flow to buy rental properties or diversify your holdings in the stock market. The point is that you need to satisfy your cash flow needs before you can start “investing” your money.One final point you should consider is whether you want to be “self-employed.” If you have always worked for someone else, being your own boss sounds very attractive. In some, respects, this isn’t quite the truth. Being your own boss means being an accountant, bookkeeper, stock clerk, receptionist and office manager all-in-one. You have to do deal with tax returns, payroll, office supplies, customer service, bills and all the other hassles that come with a business. You don’t have friends to chat with at the water cooler. You don’t have paid health insurance, a company car and a 401(k). You take your problems home with you every night. Sound like fun? It is, once you learn how to master your time and run your business. Being the master of your own life and career is well worth the other hassles of dealing with your own business.The Part-Time InvestorThe part-time investor holds a “regular job.” This may be by choice or for the time being until his real estate ventures are bringing in enough cash to quit his job. If it is the latter reason, don’t quit your job because the real estate “guru” told you so. Quit your job when it is not worth the income that it brings you. In other words, if you are making more money per hour flipping properties on the side, you are at the point that where your regular job is costing you money. Only then, is it time to quit!One of the advantages of starting out part-time is that you can maintain cash flow while learning the business. It may take weeks or possibly months to find your first deal. That same deal may take several months to turn around, especially if you decide to fix it and sell it retail. Think twice before telling your boss you’re leaving; you will have plenty of time to make the career switch once you have real estate experience. You may, on the other hand, like your occupation. If so, continue to work at it, and invest in real estate on the side.The best case scenario, if you are married, is to have one spouse work a regular job. The other spouse work the real estate business for creating wealth, retirement income and a nice college fund for the children. Of course, in today’s market, you could be laid off due to unforeseen circumstances. If you earn additional income flipping houses and invest the proceeds into rental properties, you will be covered if your main income is lost. This is especially the case for married women that often forego a career and raise a family, only to find themselves divorced with no means of making a living. We don’t want to sound cynical about marriage, but with a fifty-percent divorce rate in America, it never hurts to have a system for making money.Someone with a full time job tends to have little free time to focus on real estate. A part-timer should learn most of the same skills as a full timer. Thus, the key disadvantage to flipping properties on a part-time basis is that it takes sacrifice to learn the business. Something has to give; television, lazy weekends, meaningless hobbies and even some family activities must be compromised. As with any education, time spent learning about real estate will bring its own rewards, especially if the people in your life understand your goals and your plan to achieve those goals. If you are married, make sure your spouse reads this material with you and participates in the fun process of making money.Treat Real Estate as a BusinessPeople are lured to real estate because of the quick buck that it promises. Don’t hold your breath, you won’t get rich quick. An “overnight sensation” usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months. Real estate investing should be treated with the seriousness of a career. It takes months, even years for a business to cultivate customers and have a life of its own. You need to treat it like any other business.
Once you have put up your advertising and marketing to attract motivated sellers for your wholesale business, you must know how to take a call and screen potential sellers. You should practice taking in leads at least 2-3 times a day until this becomes natural for you. You will want to make an interview sheet with a check list and space for the answers.**Please Note: Although many courses tell you to take calls live, I use a business service and I never take seller calls live. I have setup a business voice mail where people call in and listen to a message asking them to leave name, addresses, and how fast they want to sell. This helps me screen them better and know what my strategy will be before calling back**The following advice is structured after my take-in sheet that I have use plus my own experience wholesaling real estate in Chicago.Initiating the Conversation: Begin by calling back and stating exactly who you are calling and why. Many times when they see your number and they don’t recognize it, they are apprehensive when they are speaking. Just get to the point and say something funny like, “I’m the guy/girl you’re going to sell your house to”. That helps ease them into wanting to talk.Start Probing: When calling a potential seller for your wholesale deal, you must know if that person is on title or not. Many times the person who called is a family member just looking for information so when you ask who is on title, you will know if he is a decision maker. Then you will want to get the contact information of the person on title as well. Make sure you get email and cell phone numbers.Property Information: Ask if the property is vacant or not, how long they’ve owned it, bed and bath count, and ask if it has any special features. If they wonder why you are asking so many questions, just remind the seller that it is standard procedure.Property Condition: After you get the details about the information, now ask about condition and repairs. Any seller will tell you how decent it is and doesn’t need that much work. Never listen to a seller! The best way to get an idea would be to literally ask, “if you were to sell this home, how much would you put into it, and what would you do?” This will question will help you dig better when looking for info.Is the home listed? Most likely you will know whether it is or isn’t listed before you call back, but if it is, get all your info ready. Learn about how many days it’s been listed, if there have been any offers, do they have a good realtor, and when does the listing expire? Many wholesale properties are not listed and/or have been listed for over 4 months. This is a great way to highlight how you can close fast with cash, at a lower price.Motivation and Price: This part is vital to any wholesale deal. Many motivated sellers are not always selling for the heck of it but because something is pushing them to. Ask their particular reason for selling, how quickly they are looking to sell, what will happen if they don’t, and for how much. Once you know their reasoning behind why they want to sell and they say what will happen if they don’t, you basically can start creating solutions for them regarding the property.Mortgage and Liens: Once you know the price, ask how much their mortgage is and if there are any liens on the property. Motivated sellers will tell you this information upon request, so make sure you ask. If there is on mortgage and no liens, start negotiating! But if your property has liens and a mortgage, you MUST consider these things before making an offer.Talking Numbers: RULE #1 in negotiating, the FIRST person to say a number LOSES! NEVER, never say a price regarding a property unless you know what they’re range is. After all getting all the information and taking good notes, just ask, what it they are asking. No matter what they say, remind them that you are a cash buyer and can close in 30 days and ask for what is their best. Once they tell you what their lowest is, you know what you can work with. Do not counter, say you will look that up and get back to them. If you know it’s a good area and a decent price, set up a time to meet. This part is tricky and will take some practice to know whether or not you can offer over the phone or in person, but for starters just do as I say.Obviously you will add your own parts to it once you get used to this structure but until you know what the heck to say, just follow this and you will be find. Now wasn’t that easy? Just create a take-in sheet using these steps and use it to start talking to people and getting some wholesale real estate deals under your belt.Now GOOD LUCK!More info at www.chicagocashflowproperties.com