Replace Your Income With Wholesale Real Estate
Summary: Natali Morris mentioned her real estate investments and we wanted to learn more. Today Clayton Morris joins us to explain real estate wholesaling.<br> We were intrigued when Natali talked about <a href="https://www.listenmoneymatters.com/go/roofstock/">buying a rental property</a> for $10,000 and wanted to understand the process. Today her husband Clayton is here to give us more detail. Clayton started doing wholesale real estate investing as a side thing.<br> When friends and family heard how well he was doing, they started asking for advice. And then friends of friends of friends. At that point, Clayton decided to start a business to help others take advantage of this investment strategy.<br> Analysis Paralysis<br> Have you ever wanted to do something and started researching it? And the more you learned, the less able you felt to actually do it? That’s analysis paralysis. There is nothing wrong with educating yourself before making a decision but unless you eventually take the plunge, all you’ve done is waste a lot of time.<br> Fundamental Principles Of Real Estate Investing<br> Part of the reason for the housing crisis is that people were ignoring certain rules. Banks were giving mortgages to people who didn’t have jobs! They have out $800,000 mortgages to people making working class money. And then acted surprised when it all blew up.<br> In his book <a href="https://www.listenmoneymatters.com/go/millionaire-real-estate-investor/" target="_blank" rel="noopener noreferrer">The Millionaire Real Estate Investor</a>, Gary Keller describes some of these principles; don’t over-leverage yourself, make sure you are getting at least $100 over what you pay to the bank every month and, expect a minimum 12% return on investment when buying a house free and clear. It’s important to do the math and proper research when choosing an investment property.<br> There are many things to consider when evaluating a potential investment but the number one measure is to be sure it is cash flow positive. You can create an epic spreadsheet or use tools like <a href="https://simplewealth.co/" target="_blank" rel="noopener">Simple Wealth</a> to help you calculate cash flow, appreciation and make data-driven decisions.<br> Fear Of Money<br> Did you grow up hearing things like “Money doesn’t grow on trees,” “We’re not the Rockefellers.” There is a lot of stigma around money and many people never realize that you can earn more money than just what you get in your paycheck.<br> Clayton grew up in such a family and it took him a long time to lose that fear. He’s come a long way. He plans to eventually own 300 properties and a goal for 2016 is to buy two a month!<br> Wholesale Real Estate Investing<br> The kind of homes you buy when you’re buying wholesale are not on MLS. The first property Clayton bought this way was a lucky bit of fate. His neighbor died and her home needed a lot of work. Her family did not live locally and didn’t feel like getting the house to a point where a real estate agent would show it.<br> Clayton offered to buy the home as is and the family was happy to be rid of it. These are the only kinds of properties he invests in now, mostly three bedroom one or two baths, <a href="https://www.listenmoneymatters.com/go/roofstock/">single-family homes.</a><br> This isn’t <a href="https://www.listenmoneymatters.com/brrr/">house flipping</a>. This is buy and hold investing. The homes are not rehabbed and then sold, they’re rehabbed and then rented. If you flip a house, you will be hit with a huge capital gains bill, 35%.<br> Sending direct mail inquiries to absentee and inherited property owners is one way to find properties. It sounds morbid but you can troll the obits and contact the family of the deceased. You can also contact estate lawyers who may be willing to pass your information on to clients.<br>
