David: Alright guys, welcome back to the Discount Property Investors, this is your host David Dodge, co-host Mike Slane. Hey Mike.

Mike: Hey guys welcome to the show.

David: How you doing this morning, Mike?

Mike: I am good; I got my morning cup of coffee in so I am ready to go.

David: Ready to go, awesome. Let's do it. Today we are going to be talking about exist strategies for wholesaling real estate. So there is quite a few different ways that you could exit a wholesale deal, and get paid. Most importantly would be getting paid.

Mike: Yeah absolutely. It's funny you say that there are many ways to exit a wholesale deal, and I totally agree with you 100%, but when I look online sometimes or a I listen when new students come up and ask me about... oh if you assign the deal it's not a wholesale versus if you double close then it's a wholesale or... visa versa. Honestly I kind of think... who cares? Either way you are buying and selling the property or you are buying and assigning the property.

David: I agree.

Mike: And you are making money on it.

David: And you are making money, who cares?

Mike: You are not spending a whole lot of money on it, so you are making money.

David: You are buying it off market; you are finding a buyer; who cares how you find that buyer. You are getting paid.

Mike: Right, as long as you are doing everything within the confines of the law, you are not cheating people obviously, you are not being fraudulent. So let’s talk about what a double close is. So a double close is my preferred method of closing I think on most of our wholesale deals. So what happens is, we go out, market for the property, we get it under contract and this example; let’s say we get a property under contract for 100,000. Dave here is going to be the 'A' seller. I am going to be Mr. Wholesaler in this situation so I will be 'B'. A to B contract I have got for $100,000 with Dave.

David: I sell my property to Mike; he essentially writes me a contract for the property.

Mike: That's right. A-B contract right there. You, the audience can be the 'C' buyer. Alright so I, Mike said as a wholesaler, hey audience, I have got this great deal. This property is worth $200,000, it needs some repairs, needs 30,000 repairs. I can sell it to you for $120,000. You say, wow that is a great deal.

David: You are going to pay Mike 120, put 30 into it, but it is going to be worth 200. So you will have a $50,000 equity capture if you buy that deal for 120.

Mike: So you say, let's do it. You lock up the contract, I send you the contract, you sign a contract for $120,000 and you decide to close next Friday. I say, hey Dave can we close next Friday?

David: I say, hell yeah.

Mike: So my A-B contract we amend, we say we are going to close next Friday. We have a contract with our audience here, or I have a contract with our audience here, close next Friday. I bring them both to my title company. Hopefully I have done this a little bit earlier... than next Friday. They are going to need a little bit of time to do due diligence, the title company need to do. They sort the details out and everyone goes next Friday, signs their closing documents, I am going to sign two sets because I am buying it from Dave, then I am selling it to you the audience. So I am signing two sets of documents. Dave is going in there, he is selling his property, he is signing one set. You as the audience are going in and singing one set of closing documents. You are bringing $120,000, the price we agreed to, a great deal on the house. I am bringing zero dollars but signing two sets of closing documents.

David: I like that; Mike is bringing zero dollars in.

Mike: That's right. Dave is walking away with his $100,000 so he's happy. He was able to get rid of his property that needed a lot of work.

David: True, a win:win.

Mike: I am walking away with $20,000 as a wholesaler.

David: Me, Mr. Seller I am motivated. Let's say I am going through a divorce, inherited the house and don't care about it. I don't really care that Mike is purchasing it and re-selling it. Now the benefits of a double close are; nobody in the transaction other that Mike being in the middle knows all the figures. So me as Mr. Seller, I don’t know that mike is turning around and selling it the same day or even later, in the case of a double close it would be the same day, and making the 20k, I don't know that. If I did I really wouldn’t care.

Mike: Correct. So let's talk about the same situation...

David: Just real quick though. The audience that is buying it for 120; they also don't know that I am selling it to Mike for 100. So again, that is the benefit of a double close.

Mike: Let's talk about the assignment.

David: Protects the fact that... you are buying it and selling it. Essentially it is two different transactions.

Mike: So let's talk about the assignment. So similar situation, I will be the 'B', Dave is going to be the 'A', audience will be the 'C' again, we are going to keep the same figures, just for the sake of simplicity.

David: Right.

Mike: Alright I negotiate with Dave I say, hey Dave I am going to buy that house for 100,000, you agree to it, I have the contract with Dave, so I have my A-B contract. I am purchasing it from Dave, Dave says that is great. I am still looking to close next Friday.

David: This is a great example too. This is an example where an assignment would really make sense.

Mike: Let's talk through it. So then I go to the audience, I say I have this contract, this property for... a certain price. I would like to sell you this contract for $120,000 and basically you will be buying a house for $120,000. You say, wow that is a great deal, let's go ahead and do it.

David: Yeah I am going to make 50k in equity.

Mike: So here is how we do assignments. Or at least here is how I like to do assignments.

David: Right.

Mike: I will go to the seller and say, let’s sign this purchase and sales agreement first. So I am going to sign that contract.

David: Yeah.

Mike: Then I have got you locked in to purchase the property next Friday, just like before.

David: It's a great way to do it.

Mike: Instead of doing the double close like we said; then I am going to bring you an assignment contract. I am going to send you my original A-B contract with Dave, with the assignment.

David: Right.

Mike: At that point you can see you are basically taking over that contract; I am assigning all of my interests...

David: The C buyer audience... they are already locked in to purchase this property.

Mike: Correct, that’s why we do that. We like to... with new buyers in particular...

David: Right.

Mike: We are going to do that because we don’t want them blocking at the $20,000 assignment fee, because again audience, you come in and say, wow... I am not going to pay you $20,000 just for this property, that’s not fair. Again, you have already agreed to buy it at 120, so we say okay.

David: We spent a ton of money on marketing; we took 100 phone calls to get to that one...

Mike: As you the audience are well aware if you are doing some wholesaling or trying to do wholesaling; it’s a lot of work.

David: Yeah exactly, we went on tons of appointments to get to the deal, we found that deal, we negotiated that deal, and maybe we were not able to lock it up on day one. Maybe we had to call that individual back and follow up with them for eight months. So it's like yeah we did a lot of work actually, we earned that 20k.

Mike: So our market, at least in my mind anyways... when do you do a double close versus an assignment? Dave was talking about this a little bit earlier too. So my threshold is always $5,000. I think if someone is going to block at paying you $5,000... I just don’t see that happening.

David: Right.

Mike: If you are making over 5000 I think you might want to do a double close just to protect your interest in it.

David: Other markets, other people and other sellers, other buyers, they have different, may have a different threshold on that. Just rule of thumb. But in this scenario though which is a great scenario; if i bring a property to somebody at 120, regardless if I am paying 100 or whatever for it, it needs 30 grand, but they are then going to have a property worth 200,000. 9 times out of 10 they are not going to care that you are making 20 grand, they are happy to get that property at 120... because if they then wanted re-finance that property and get a 70-75% loan... they are into that property for little to no money. That is a killer deal.

Mike: We just described a really good deal.

David: We did. In this scenario, in a 20k assignment isn’t crazy, it is not unheard of. However, like Mike said, typically if our profit margin is between a 5-10 or more than that; we will opt more for doing the double close. Assignments are great way to exit. He is the beauty of an assignment that I don’t think we...

Mike: We didn't even talk about it yet.

David: We didn't even talk about it yet, but when you assign a contract, you are essentially telling 'C' buyer, the audience in this case; by you signing this assignment... you are taking over my responsibility as buyer. So I am essentially still in the middle of htis deal, but I am actually going to step aside, I am going to get out of your way. You are going to show up to the title company, like you would originally with a double close, but I am not. You are going to buy the property directly from the seller, the title company is going to collect all the money, pay the seller the 100, they are going to write me a check for 20. So I am not going to have any expenses, any out of pocket costs, and I am not going to have to pay the closing costs which goes back to your expenses.

Mike: So those are the pros. Here are the cons. So one you are stepping out of that contract, so you are actually relying on the 'C' buyer to perform... so they can actually kind of mess up your reputation if they don’t perform. Again, it should be a good deal, shouldn’t be an issue. The other cons, everyone knows what’s happening. The 'A' buyer may not know about it, but they will figure it out when they get to closing and they see that you are not longer the person on the [00:10:09.04 - inaudible] statement, someone else’s names or a different company, they can put two and two together. So again, it becomes...

David: Usually they don't see that until the day of closing.

Mike: Exactly.

David: But again, if you are working with a motivated seller, they don’t care. Their main motivation is to sell the property and get some money for it. If Mike shows up as House Sold Easy properties as the buyer, or Dave shows up with another company called Available Home buyers or whatever example... and purchases this property, if the seller is truly motivated which is what we are teaching people; they are not going to care. Yes they are going to see that, and yes there may be a scenario where they get upset or something along those lines, but it is very rare. They are motivated, they want to sell their property, they want to get out. So yeah you definitely have pros and cons with assignments. We love doing both obviously but we kind of opt more for the assignment if A, it's less than 5k, because is it not a huge deal, people are not going to get pissed about having to pay that finder’s fee for example. Or if we have a relationship with the buyer who doesnt care that we are making 10 or 20k deal, as long as it is a sweet enough deal that they can walk away with 30-40-50 grand themselves.

Mike: Repeat buyers sometimes... hey we are going to make this on it, is that okay? And just sign it.

David: Really though, if it is a killer deal, like the scenario that we just described to you all, and we say hey... do you have a problem with us assigning this to you? We are going to make 20. They say yeah we do... well that's fine, that's a killer deal. I will sell it to someone else and make 20 or even 25 on that deal. It just depends on the numbers on the deal and how good a deal that you have, and how good of a deal you are selling.

Mike: Absolutely.

David: A lot of factors that go into play. So, those are the differences between a double close and an assignment.

Mike: Let’s talk about another option.

David: Talk about exit strategies here guys, ways to exit the deal.

Mike: Another option then, so let’s talk about this deal a little bit more. Dave you can be on my team now.

David: Okay.

Mike: We are buying...

David: I like being on your team.

Mike: Thanks man I like you on the team. We are buying this $100,000 house, right?

David: Okay.

Mike: And we know it is work 200,000. It only needs 30,000 of work. What is another option? We could wholetail that property.

David: Yeah.

Mike: So again, this one... potentially... what we call a wholetail is just carpet and paint, and let’s just assume that is what this one needs. It needs some new flowing; it needs... maybe some sprucing up in the kitchen, real minor stuff, something along those lines. We buy it for 100, we spend 15,000 and then slap it on the MLS. So again, we are able to sell it to an end buyer instead of selling it to an investor buyer. So they are going to come in... maybe we are not going to get that 200 because we didn’t do the full updates, we didn’t do... granite counter tops, something like that. But maybe we can sell it for 180. So we can sell it closer to that full market value. We are going to put 115 into it, but that is going to leave us a much bigger profit margin, after everything is said and done, $50-60,000.

David: Right, wholetailing is definitely a great way to exit a deal. In order to wholetail a deal, you have to take control of the deal though, that is one of the down sides to wholetailing. You either have to have the cash, you have to have a bank loan, have the ability to get a bank loan I should say.

Mike: You have got to have money.

David: You have got to have a private fund, you have to have somebody that is willing to get you the money if you don't have it to close on that deal, as well as have a little bit more money to fix that property up a little bit.

Mike: I guess we should call it access to capital.

David: Access to capital, that is it exactly what it is.

Mike: You do though; you have to have the money available to spend to... satisfy the seller. They want their 100,000 next Friday like we said, they have to get paid. Then you have to have some money to put into it, put on the MLS and wait to get paid because... the retail consumer, that buying process is a much longer period than a cash close with an investor.

David: Right. Wholetailing is a great strategy; we have talked about it quite a bit in the last episode actually. But it is essentially rehabbing a property, but it is just very lightly. Painting, carpet, landscaping, maybe a couple of other minor things. You don't have to spend a ton of cash on wholetail deal. Sometimes we will essentially buy a property and not put any money into it. Maybe spend a couple of hundred dollars on some maids to go and clean it, then throw a for sale sign in the yard and list it on the MLS. You could also do wholetail deals where... you still have to purchase the property... but you are not spending a ton of money rehabbing it.

Mike: Right because I think the way we like to define it; at least around here... because again it is one of those things... what's a wholetail? What's a rehab? One of the ways we like to define... you don't have to be a general contractor or have a general contractor on the deal, it makes sense. So if you can go in and manage the project with a few phone calls...

David: I love that.

Mike: ... hey guys we need you to dump a dumpster off; I need you guys to get the trash out...

David: Clean it out, then you call the maid.

Mike: Exactly... go to Lowes or whatever and get your carpet guys out there to get it installed, or whoever you are using for flooring.

David: Right.

Mike: Again, just a few phone calls. Call a painting company and have them do the paint.

David: But you are not having to micromanage these people, go over there and made sure you have all these permits... you don't need permits for cleaning a house out, painting it and putting carpet in. It's simple, you can do that whole project in maybe one week, two weeks.

Mike: Two weeks tops, yeah.

David: Very simple.

Mike: Yeah.

David: I do want to mention this really quickly, Mike. I am not trying to get off on a tangent by any means; but there are ways to wholetail deals without purchasing them. You can actually list property’s owner by contract on the MLS... the only catch is you have to have permission of the seller to do so. I could go out... let's say there is a super motivated seller, he is out of town guy, comes in town to meet me... he says, Dave... he calls me up, I go out and meet him. He says, Dave, I want to sell this property, I want to be done with it, this is what I am looking to sell it for, if you pay me this we have a deal. Let's just say that he is asking a really reasonable number... it is a good deal in my eyes. I say, great no problem. Then I get a contract signed with him and then I say hey, I am going to buy this property regardless of what happens. Here is my proof of funds; we close any way you want. Now I am going to turn around and sell this property after I buy it. That’s what I do, I am very transparent about it; I am going to either rehab it or sell it to a landlord that is going to rent it. However, in the mean time do you mind if I start marketing this property? Again if I don't find a buyer between now and close date; I am going to buy it, don't worry about that. But if I can get your permission to start marketing this property now... does that matter to you, do you care? Again, if he is motivated, I am willing to pay him what he is willing to sell it for; he is not going to care. So I will just write in my contract that I have permission to list this property, owner via contract and have him sign his initial next to it, then boom! I can head back to the office, throw that property on the MLS... put a lockbox on it if it is vacant, otherwise I will just have to wait until I have showing periods. I can actually wholetail that deal and have full control of that deal without one penny out of my pocket. So there are ways to do that, you just have to be a little but more creative and a lot more transparent.

Mike: I guess originally our first definition of wholetail was buying off market, then selling retail.

David: That's not completely true. There are ways to do it without buying, without purchasing. But you still have to control the deal, that is the main point. What else have we got, Mike? Exit strategies, J.V's?

Mike: Sure, let's talk about joint ventures.

David: I love joint ventures.

Mike: Again, if you have a property tied up, it’s like... I got a property under contract, what do I do next?

David: Oh no!

Mike: We are trying to sell it, how do you get out? Well you can joint venture with somebody, so go to another wholesaler who is selling a ton of deals and say, listen I have this property under contract, do you have anybody who would be interested in it? Would you be interested in it?

David: If you are new to this business, guys, and you do not have a buyers list or a very small buyers list; here is the two best was to do a joint venture out of buyers list. One, go to REIA's, find guys that are wholesaling properties, find investors that are rehabbing or buying rentals. Those are your buyers, okay? So go to REIA's, you can find these on meetup.com or REIA.COM, those people who are going to those places are investors. There is no better place to find investors other than going to a real estate investing meet up group, guys period. If you don't have REIA's in your town; or you have been there and not had luck with it, go to Google, type in sell my house fast. You are going to see 50 websites that pop up. The people that are paying Google, aka ad words. They are probably spending between $10-50 a click to get you on their website. Those people are wholesaling, they are buying, they are rehabbing, they are enquiring rentals. Those people have capital or have access to capital. Call them up, say hey I’m Dave/I’m Mike, I have a deal. But I don’t have a buyers list, are you interested in helping me sell this deal and/or even buying this deal... partnering with me. Essentially joint venturing, J.V is what we call that. Those people with either help you sell that deal and cut you in... that cut that 30/50/70% whatever it might be; that is something you are going to have to negotiate with them. But they also may just come to you and say, hey... I will pay you 52 grand for this property, if you are into it for 42 grand, that is 10,000 boom! Joint venturing is simple guys, don’t over complicate it. There is probably 50 different days to do joint ventures. But the two I just mentioned at the easiest ways that anybody can do very simply.

Mike: Very good and... so I am... one interjection as somebody who has paid for a lot of Google ad words...

David: Sure.

Mike: If you are doing that; figure out the name of the company... don't click on their ad though, save yourself ten bucks of fifty bucks. Look them up and call them or whatever.

David: Don't even tell them that, they will be happy with you if you do that. Ad words is expensive...

Mike: Yeah it adds up.

David: I think we were paying $25 a click at one point.

Mike: It gets real expensive.

David: It's super expensive. But, those people... think about it though; if you are willing to spend $25 to get somebody to your website... you are really... their eyeballs are important to you, they are valuable to you. You are willing to spend $25 to get their eyeballs on your site. Now hopefully they call you, or they e-mail you. But if they go to the website and then they just leave the website, that is $25 sunk. So you got to think; people spending that kind of money to locate deals, they are buying deals, or they are interested in helping other people wholesale those deals.

Mike: Yeah I was going to say, it is probably not 100% but I would say 9 out of 10 of them that you call are going to be happy to take a look at the property.

David: Absolutely.

Mike: And try and help you solve the deal or have the deal from you. It doesn’t make sense for them not to.

David: Moving on! Exit strategies guys! Lease options are awesome, Mike... we just did an amazing lease option. Tell us that real quick, give us a one or two minute example of the lease option that we just did.

Mike: Sure... this is a relatively low income area here in St Louis.

David: Not a warzone by any means, not a bad area, but a low income area.

Mike: Not a great one. So the seller was super motivated. We had planned to wholesale this property.

David: We did.

Mike: So we tried to wholesale it for a decent profit, and I guess we never ended up finding a buyer... the reason being was that it was occupied. So it was a little bit more difficult...

David: It's harder to show whenever you have somebody living in the property. Often times they don’t want you to put a lockbox on the property because they are afraid people are going to be coming and going when they are not there. It makes sense so you have to co-ordinate with the lease...the lease-ee, the tenant, as well as yourself and you interested buyer. Often that time that can be difficult.

Mike: Yeah, again in our company we have so many moving parts that it just makes it even more complicated... it just slips through the cracks and we just didn't get this one done.

David: Right.

Mike: But we are kind of happy it didn't so here is why.

David: I am ecstatic we didn't.

Mike: So here is what we did. We bought the property for... with all of our marketing fees, and paying out joint venture partners, be bought the property for $7500. This is... probably a property worth $25-40,000. Maybe a little more, probably 40-50,000. When it's fixed up it's nice.

David: But somebody is living in there, so it is going to be very difficult for us to fix it up when they are living in there, nor do we want to fix it up.

Mike: This tenant has been there for a couple of years now... 7500, it cost 7500. So then what we did; we said...

David: That's a killer of the deal right there guys. We got property with a ARV of 40-50k, for 7500 bucks.

Mike: Not a bad deal.

David: How did we find that deal?

Mike: This was joint venture so this was... the girls. So we had to pay them out on it. Anyways, this is a property that is renting currently for $600 a month. In my personal experience when the rent goes below a certain point... it is usually a little bit higher maintenance.... tenant. Usually a little bit...

David: If they are paying less than 5-600 bucks a month guys... you are going to have a lot more problems.

Mike: I would almost raise my threshold to under 800... I just don't want to deal with the tenants at that level. It just changes... everybody has different experience levels with it. So this tenant... low rent, so we don't necessarily want to have that on our portfolio as a rental because... if something goes wrong or that tenant moves out, we are stuck and it is probably going to cost us 5 grand or so to rehab the property for the next tenant.

David: Or we may have to evict... everything else.

Mike: So if you think about that, that's almost four years worth of rent when you take out taxes, insurance, property management. 5000... it kind of eats up all the profits. So out of those really low income areas with lower rents... they look great on paper because you can buy them so cheap, but they are very difficult to make profitable. So here is what we did, we did a lease option.

David: Lease option, awesome!

Mike: We talked to the tenant and we said, hey listen... we just bought this property, are you interested in buying it? Would you want to stop paying rent eventually? She said sure. We said okay, can you afford any money to put down on an option deposit, so basically a down payment on the property. The tenant said yeah I can do that, but I don’t really want my payment to go up, is there any way you can work with me? We said, sure. She proposed putting $3000 down and we said that will be great. What we will do is basically lease this property to you for $600 with the option to buy it if you pay your rent on time for 60 payments... then the option is executed and we will quick claim the property over to you. So it is a lease option that just triggers automatically when she pays her rent on time.

David: Absolutely. You worded it perfectly. It is a lease option that triggers automatically. Other times... you are doing a lease with the option to buy at a certain point in time. We just structured it creatively that says we are going to give you the option to buy, you have to put 3000 down and pay 600 a month, but essentially if you make 60 payments and you are not late or too late, you make all the payments for the most part... at the 60th payment you will own the property.

Mike: Here is how this works though. The payments that she is making are still rent payments. She is still sending us a rent check or we are doing an ACH so it is automatically happens for her. She is still making that payment each month and that is considered rent, until the 60th payment is made, then we credit her $600 per month times the 60 payments...

David: So we are actually selling her this property for $39,000, because she is going to put down 3000, 600 times 60 payments is 36,000. So 36,000 plus 3000 is 39,000. We will be into the property for 7500. Now we will have some additional costs.

Mike: Right, so there are taxes, insurance... here in St Louis you have to pay the sewer bill. If that doesn't get paid they will come after you.

David: Right.

Mike: So we will probably have another couple of thousand dollars in expenses over the next 60 months.

David: But 39,000 minus the 7500 we paid is 31,500. Let's just say we have maybe three grand worth of expenses over five years. We are essentially going to walk away with $28-29,000 in profit on a deal we paid 7500 for. Now we are going to have wait, we are getting paid over five years. But it is just another way to exit a deal, lease option; great strategy. We have some great buddies that own 150 houses almost, and every single one of them...

Mike: One of our favourite episodes actually.

David: Yeah one of our favourite episodes; Liquor and lease options with Jimmy and Bob, great guys. They are great friends of ours now but... those guys have a ton of properties and every single one of home they do lease options. Another advantage of lease options guys... I don't want to harp on it for too long here but... another great advantage of lease options is... all the day to day maintenance is not your problem as a landlord. They are a tenant buyer, so essentially that is their home... you still have the title but essentially you are owner financing it to them. So if something... if the faucet quits working or the toilet gets clogged or... something minor happens to the property; that is their property so they are responsible to fix it.

Mike: Again so you are technology not owner financing, it is a little bit different because... if you were owner financing there are a whole different set of things that happen.

David: Right.

Mike: And also a lot of the times... in this example we are basically just...

David: It's a lease... absolutely.

Mike: Like if it’s a $1000 monthly payment you are going to credit them 200 bucks a month, and they are going to purchase that at the end of that for something else, they are going to get a loan...

David: Right.

Mike: So this example is a little bit different but it works on a very low income area, very low value properties.

David: But the point is though; all the day to day maintenance is... the responsibility of the tenant buyer...

Mike: If you put it in your lease option.

David: If you put it in your lease option, you need to work it that way, right?

Mike: Right.

David: But essentially what we will do is if the HCSV goes out, the roof starts leaking; we will either come in and fix those, or in some scenarios... we will come in and we will split that cost with the tenant buyer, or even loan them money to make those repairs, then they pay us that money back in additional rent payments over 6-8-12 months.

Mike: Right, because you are still the person on the title, so that still is your property, you don't want it going to pot.

David: Don't want it going to shit, exactly.

Mike: You want to maintain the property.

David: Right. Lease options, excellent exit strategy, we got one of two more here, Mike, what is it?

Mike: So... if you are trying to wholesale a property, I got a great story. This is kind of back when I first started. I was trying to wholesale a property and got stuck with it.

David: It happens.

Mike: I had to close on it and basically I wasn’t able to sell it. I thought, shoot! Maybe I was wrong and bought it too high. So here is an easy way to escape that, rent it out.

David: Rent it out!

Mike: It's not ideal all the time.

David: Especially if you purchase it, you purchase it... you got a good deal on it, but for whatever reason all your cash buyers... they may not think it is as a good a deal as you did, you know? But that's okay, it happens.

Mike: So... rent it out, and when I say is; instead of a fast pay you are getting a slow pay. It is kind of the way to look at it. Instead of someone writing you a check today for five grand; you are getting checks for 600 a month for 60 months. I mean instead of getting paid quickly you are getting paid slowly.

David: If you don't ever sell it just lease it out, rent it out.

Mike: You will get your money back; it's a way to avoid taking a loss. I hear a lot of guys say... oh I have never taken a loss on a property. Dave, you actually said that to me the other day, I was like oh it happens. But this is like a great way, or it allows you to avoid that because if your time line on real estate is long enough... you probably can avoid taking a loss pretty much.

David: Unless you are trying to dump a property which happens sometimes, taking a small loss... but yeah, if your time line... what Mike said, if your time line is long enough, it is almost impossible to lose money on a deal because you can rent it out, essentially pay yourself back down to zero, or down below to a point where you could sell that property and make a profit. Timeline has a lot to do with rental properties and the exit of leasing or renting out a property.

Mike: Absolutely.

David: Guys, just a recap; exit strategies, there is more than these, but these are just the main ones me and Mike thought...

Mike: We focus on... trying to wholesale and...

David: It would make good conversation. So if you are wholesaling; double close, assignment obviously; those are awesome strategies, me and Mike do those every single day in our business. Wholetailing a property; essentially you are buying at wholesale, you are selling it retail. You may fund it, you may not, lots of different ways of doing those, wholetailing is a great exit strategy. Essentially whenever you do a wholetail you do it properly, you are going to make a lot more money than wholesaling it via double close or assignment. Joint ventures are a great way to sell the properties. Finding another wholesaler, finding... another individual who can help you sell that property. If you are new to the game or don’t have a whole bunch of cash buyers. Lease options are a great way to exit a deal... essentially you are renting it out, but you are renting it out with the intentions of selling it to somebody down the road. So you at leasing it but you are also giving the option to buy. Then just leasing it, being a landlord, taking the property... getting a loan on it, paying cash for it, cleaning it up a little bit, finding a tenant. Just saying... you can rent this property from me, pay me this much a month and essentially... not exiting the deal, but it is a way to start creating income.

Mike: Existing that wholesale.

David: Exiting that wholesale, that is so true.

Mike: Okay guys, thank you so much for listening.

David: Thanks guys.

Mike: We enjoyed it, hope you guys did. If you are interested in getting started in real estate please check out the freewholesalecourse.com. We will go ahead and wrap it up with a quote, Dave. You want to kick off our quote? Which you guys have heard before.

David: You guys have actually heard this every single episode if you have listened to any of the episodes, hopefully you have listened to all the episodes, but I just really want to re-iterate this guys. "You make your money when you buy real estate". I am going to say that again. "You make your money when you buy your real estate; you get paid when you sell." You are making your money when you, you got to buy at a discount, if you can buy off market it is going to be way easier to get that discount.

Mike: That is the longest quote for...

David: I like to re-iterate it.

Mike: Very powerful though.

David: Make your money when you buy, you get paid when you sell.

Mike: Thanks Dave, thanks guys.

David: Thanks guys.