Real estate investors and wholesalers build their career success from their initial deal completion with buyers. The path toward the first deal proves cumbersome to many people. Many crucial activities must take place before you find an ideal seller make terms agreements then reach contractual agreements.

Although it might seem daunting you do not need to develop everything from scratch. A structured path makes the process simpler helping you build deal competence which leads to effective execution of your first transaction. The complete process of locating motivated sellers and generating your initial profit will be explained throughout this guide.

Identify Motivated Sellers

A motivated seller starts every real estate transaction. Real estate owners interested in a speedy sale comprise the market segment that expresses a sense of urgency for their property transactions. Properties sold by motivated owners present better opportunities for deals because they allow greater flexibility with price terms.

Your real estate investment strategy should start by seeking out properties that show visible damage or ones which are facing foreclosure. Property owners who reside far from their rental buildings represent an outstanding opportunity because such owners frequently wish to sell properties that have become difficult to manage.

Connect with these sellers by sending direct mail pieces and using social media advertisements or conducting phone calls. Your communication should contain straightforward messages including “We Purchase Properties in Any Damaged State for Immediate Cash Payments—Reach Us Today.” Your direct message communicates assistance to their immediate problems while displaying your readiness to support them.

Build a Buyers List Early

You need to build a strong list of highly motivated prospective buyers before striking any agreement. Keeping a well-developed buyers list makes contract assignment faster thereby minimizing unnecessary pressure and save time.

Develop a list of serious buyers through attendance at local real estate discussion events and membership in investing social networks. Facebook along with LinkedIn and Craigslist become platforms to find active buyers through their network. Cash buyers represent the most dependable solution for property acquisition since they pay without delay.

Create groups for prospective buyers according to their specific property choice between different types, locations, and prices. Right after making a deal you will be able to directly contact all the most relevant contacts in your list. Read more on how to create a Buyer’s List here.

Professional Property Evaluation

The next step involves analyzing the property property after you select it from your list. The financial analysis at this stage helps you understand if the proposed deal has merit and should proceed further.

Determine the property’s After Repair Value (ARV) based on estimates of its value after renovations. Refer to actual property values in the neighborhood to establish precise market numbers. Next, estimate repair costs. Physical inspection of the property should be followed by seeking contractor estimates to determine costs precisely.

You should employ the 70% rule to determine your maximum allowable offer by subtracting repair costs from the ARV multiplied by 70%. The formula helps you establish an offer that provides profitability margins while attracting your property purchasers. The Pro Guide to Wholesaling Real Estate provides comprehensive guidance on evaluating properties and understanding market values.

Negotiate Terms with the Seller

Developing negotiation abilities is essential to close your first real estate transaction because the skill represents vital art in the industry. Ongoing success depends on mutual benefit rather than obtaining victory during the negotiation process.

The first step requires you to understand what matters to the seller. Does the seller put speed of closing at the top of their preferences? What matters to the seller when it comes to costs for moving expenses? Knowledge about their main concerns enables you to present an arrangement solution that addresses their requirements effectively.

The process together with the steps you used to derive your offer should remain open to complete transparency. Showing detailed information about market conditions and repair expenses will enhance trust levels which leads the seller to approve your proposal. Learn more about negotiating as an REI on this guide.

Seal the Real Estate Deal with a Purchase Agreement

After you and the seller achieve agreement, the next step is to document all terms in writing. The purchase agreement provides legal protection for your position as buyer by establishing the deal conditions.

A well-written contract needs to state the purchase amount together with all required conditions and specify the date of finalization. Wholesale buyers must always add an assignment clause whenever crafting their agreements. Through this clause you become able to pass the contract to a different buyer and thus generate your profit.

Gaining clarification on legal requirements about real estate deals requires consultation with a real estate attorney. A worthwhile expenditure exists to confirm the solidity of your agreement as well as its compliance with regional regulations.

Promote the Real Estate Deal to the Buyers.

After the property has been under contract, you will need to market the property to your buyers list. However, having a professional presentation and being well prepared when presenting the deal have a huge effect on how soon you are able to assign the deal.

Write a detailed property package with photos, ARV, repair estimates and your asking price. Point out certain features that would set off the commercial property, such as an enviable location or the possibility of a high return on investment.

This package is to be sent to your buyers list via email, copied and pasted into relevant forum or social media groups, etc. You should prepare yourselves to answer questions and add more detail if you didn’t address all that was needed to explain it.

Assign the Contract to Your Buyer

When you have a buyer, it is time to assign this purchase agreement. This one gives your rights in the contract to thebuyer, who now can complete the deal.

You should include the purchase price, your assignment fee and when closing is going to occur. The agreement you sign is signed by you and the buyer, your title company or attorney then uses this agreement to finish the transaction.

Those assignment fees vary, often in a range of $5,000 to $10,000 a deal.

Close with a Title Company or Attorney

A closing is a process of transferring the ownership of the property and completion of all legal and financial obligations concerning the property. They will be the heavy lifters to verify the title and prepare the closing documents and your title company or attorney will do that for you.

Since you are closing on your own, stay in close communication with your closing team. If there are any red flags, as say, a lien on the property, they will call you to notify you so that you can fix it now. Trust builds along the process, sellers and buyers get a smooth close and you end up closing deals with each other.

Celebrate and Finalize the Real Estate Deal

On closing day, everything has fallen into place. The seller gets paid, Buyer gets the title, you make your assignment fee. You can expect to finally sign final documents, verifying the funds to all accounts.

That is a big deal, so go ahead and celebrate this as a big milestone. Your first real estate deal has now been closed and you are ready to take on many more such deals.

Reflect and Improve

First of all, every deal is a learning experience, despite them being your first. Finally, when the meeting closes, take the time to go through what you just did and see what can be improved about the process.

Ask yourself:

• Did you manage to attract motivated sellers with your marketing efforts?
• Do your buyers list have a strong and responsive perspective?
• Was there anything unexpected that arose during the negotiating or closing process?

Refined approach will even prepare you best for next real estate deal.

Lock The Real Estate Deal with REI Podio CRM

Your first deal doesn’t have to feel overwhelming. Using the right strategies and the right tools, you can properly streamline your process and let your focus be on growing your business.

REI Podio CRM is aimed to assist in managing the real estate wholesaling lead acquisition functions, contract management, and streamlining the deal process. A tool that allows easier and faster closing of deals, and helping you start your journey to success.

Conclusion

Closing the first real estate deal is more than transaction, it’s a milestone that creates the bedrock upon which your success will be built. With that said if you follow this step by step guide you will learn the skills and confidence you need to be successful in real estate.

The way to success is consistency, preparation, and a commitment to learning. Closing every deal you do will also teach you something new, adjusting your process and scaling your business. But, the journey has begun now—it’s time to close your first deal.