Why Is “Reverse Wholesaling” The BestStrategy For Real Estate InvestingToday?It focuses your efforts on revenue-generating activities,not time wasters.It’s Relationship-driven, rather than transaction-drivenNo major financial commitment or risk on your partIt can be successful done from anywhere, full or parttime, from the comfort of your home or on vacation withyour family.Traditional (aka “Old School”) real estate wholesalingmisses a vital element that makes it much more challenging than it needs to be.Now, in this groundbreaking report by Kent Clothier, heflips the strategy on it’s head and turns frustration intofinancial freedom through the use of “Reverse Wholesaling” where investors will learn a quick and easy methodto finally make wholesaling the lucrative business of theirdreams.Kent Clothier is one of the nations leading real estateinvestors and premiere investing educators. The Clothier family has purchased and sold over 1,500 propertiessince 2005 and Kent has educated over 200,000 investors with his strategies.
What You Are Going to Learn1. How you can make money in this market and ANY market2. How to get started right now – even part time3. How to quickly flip a deal to make a wholesale profit4. How to begin building a business and NOT a JOBThis book is edited and formatted from an exclusive videotraining class hosted by the author, Kent Clothier. This versionhas been edited to flow smoothly as a stand-alone book andguide. But you can also Get The Recorded Video Training For Free!http://www.ReverseWholesaling101.com/bonus1
Table of Contents2Who is Kent Clothier3Introduction5Old School Vs New School Wholesaling155 Key Steps To Cashing In With Cash Buyers19Target and Automate Your Marketing21Finding Properties For Buyers25Focus on Clients Not Deals35Systematize Your Business37Business Rules: Removing Yourself From Your Business453
Who is Kent Clothier?A Proven Track Record in Real EstateKent Clothier is a founding member of the Mid-South REIA, andthe Clothier family’s proven track record in real estate includes:- Purchased and sold (flipped or wholesaled) over 1,500properties since 2005- Manages over 1350 properties under one of Tennessee’slargest property management companies, Memphis Invest,- Owns over 100 rental properties in Tennessee and Florida- Owns several commercial buildings in Memphis, TennesseeKent is also the President and CEO of 1-800-SELL-NOW, one ofthe country’s most sought-after real estate branding companies.This system is now used by investors and Realtors to attract onlythe most motivated direct home sellers through Kent’s finetuned marketing strategies and techniques. It is used by realestate professionals in over 670 markets throughout the UnitedStates and Canada.In 2009, Kent introduced the revolutionary new product, FindCash Buyers NOW, which solved the long-standing problem ofhelping investors find buyers for their homes.In 2010, he introduced Find Private Lenders NOW. Through thistool, Kent Clothier and his team gave investors access tohundreds of thousands of active private lenders in each andevery market in the United States.When Mr. Clothier is not spending time with Seema, his lovingwife of over nine years, and their two children at their beachhome in La Jolla, California, or on frequent family vacations, youcan often find him following his other life’s passion of speaking45
at national real estate, entrepreneurial, or personal developmentevents and trainings.IntroductionI’m going to share some information with you about what we call“reverse wholesaling.” Right now, reverse wholesaling isprobably the single best strategy you can use to earn quick cashwith real estate. I know that a lot of people throw aroundbuzzwords and make overblown claims. But reverse wholesalingis the real deal. If you're smart, deliberate, and strategic, you canmake an unbelievable amount of money very, very quickly usingthe reverse wholesaling strategy.So I hope you came to learn.We’ve been using this strategy for years, now, and it works.We’re the ones who, back in 2005, coined the phrase “reversewholesaling.” We started by earning money. Quickly. Then westarted teaching the strategy to others. Now, it seems like everyguru on the planet is out there promoting his or her own reversewholesaling strategy. As they say, “Imitation is the greatest formof flattery.” So we take a lot of pride in the fact that we’ve beenable to show people a strategic way to make money in thismarket.Let me be candid. If you pay attention, if you stick with us, andgive us 60, 75 minutes, I promise you it’ll be worth your time,and you will see why everybody is excited about reversewholesaling. There's nothing to buy here; not even if you try! It'svery simple. Just pay attention, take good notes, and you willabsolutely see the benefits.Get your pen and paper out. Get all the distractions away. Turnthe TV down. Get the dog out of the room. Get the kids out of theroom. Do everything you have to do, because this is aninvestment in your education. Let me say again, we have somevery valuable information for you.So, now let’s jump into it. Why reverse wholesaling? Why do wewant to do this right now?67
From my perspective, there has never been a better time thannow, because cash buyers are taking over the market. If you’rebrand new to real estate, I want you to understand that this is notsome fad, and it’s not rare. Right now, 38 percent of all realestate transactions nationwide take place with people payingcash. Think about that. Think about how powerful that is.In four out of every ten transactions right now, somebody islaying down a check for 50,000, 100,000, 250,000, or amillion bucks. Whatever the case may be, they’re writing big, fatchecks.Why Does It Matter to You?Well, if you’re taking notes, this is the first thing to write down:“People pay cash for investment property. People do notpay cash for their primary residence.”Cash is not typically the way people buy their own home. Inalmost every case, even with bad credit, you can typically get aloan for your primary residence. So if you’re paying cash, you’rean investor. If you’re an investor, you're looking for return. Ifyou’re looking for return, then that means you’re putting moneyout there to get money back, and you want to keep it going, overand over, and over. And that means, as real estate wholesalers,we have the opportunity to sell to these people multiple times.So not only are they paying cash, but they're buying multiples.They’re buying for investment; so they're going to want to do itagain. This isn’t just a one hit wonder.This is how you build the business. So this is a very exciting time.Why is Reverse Wholesaling the Best Strategyfor Your Business?Why is reverse wholesaling the best strategy right now? Well, letme give you a couple of reasons. First, it focuses your efforts onrevenue-generating activities. If you’re just starting out inbusiness, or if you still work at a full-time job but are trying tofigure out a way to get out from under it and actually build abusiness, then you need to be very aware of those three words:revenue generating activities. This means doing stuff that is,strategically, putting you in a position to win. The more time youspend focused on revenue generating activities, the moresuccessful you will be, and the faster it will happen.Now, reverse wholesaling is relationship driven. This meansit is long-term focused, rather than transaction driven, which isabout quick hits. It allows you to be strategic and selective withyour time. There’s no major financial commitment withreverse wholesaling. This kind of business can be done fromanywhere. You can do it from your home, or you can open anoffice location, if you prefer. You can do it remotely. You can doit while you're on vacation. It really doesn't matter. Also, itrequires no experience in real estate.Isn't that fantastic? You don’t need to have ever done a deal. Youdon’t need to know how to figure out what a property is worth.You don’t need to know any of that. The market is going totell you everything you need to know. That’s how you can getaway with not having any experience.And very soon, I'm going to show you how to read the market.So what else are we’re going to learn today? Well, I put thistogether to break things down for you, and to show you, step-bystep, exactly how to do reverse wholesaling. So this is all aboutthe following:89
What You Are Going to Learn184.108.40.206.5.6.How you can make money in this market and ANY marketHow to get started right now – even part timeHow to be more strategic and effectiveHow to quickly flip a deal to make a wholesale profitHow to begin building a business and NOT a JOBHow to get going right NOW doing all of thatNow, first and foremost, let's talk about what wholesaling is.Wholesaling is very, very simple. Bottom line, wholesaling isbuying real estate at a deep discount and immediately selling toanother investor. You don't try to sell on the retail market; youdon't try to fix it up; and you don't invest a lot of money. Yousimply buy it, sell it, and don't ever touch it. You just flip thatcontract or property to another buyer for their investmentportfolio. That’s all wholesaling is. Buy it really cheap, and sell itreally cheap. You don't try to get retail prices.Does This Really Work?Does it work? Yes, it absolutely works. How do I know? Well, Igot started buying and selling houses back in 2003, in SouthFlorida. Ironically, my father was also flipping houses inMemphis, Tennessee, at the time. And my brother, Chris, begandoing it in Denver, Colorado. And none of us were workingtogether.I started 1-800-SELL-NOW down in Florida a couple of yearslater, to get sellers ringing my phone. Then I had people callingme to ask me to buy their house from them. As I said, I startedthat company so I could get my phone ringing. Then, we startedMemphis Invest as a full-on real estate company that bought andsold houses at a much bigger level.I guess you could say that my family and I started off each doingour own thing; we were spread out around the country and notworking as a cohesive unit. But we made a decision to start beinga little more strategic, and to start working together. We tried to10become more efficient, to bring our buyers into one location. Andwe chose Memphis because my family and friends were inMemphis. I went to high school in Memphis. So we already had apowerful network in place, there. It wasn’t because Memphis wasa great market; it was just because we had resources there we feltwe could tap into. Then, in 2007, our business developed to apoint that we needed to make some changes. In addition towholesaling, we started adding more services, and these took off,and the business boomed and grew much, much bigger.But then, the market crashed, and in 2008 the banks allretreated. They stopped loaning money to investors, and thisnearly crippled us. To remain in business, we again had to makechanges. That’s when we started working almost exclusively withcash buyers. We automated the entire system, and got prettysavvy with it. Now we can look into a database and see who ispaying cash, anywhere in the country, in a matter of seconds.Once we figured that out, we made that available to the publicand started selling that service on the real estate market.And that’s how I got into the online education and informationbusiness. Because between the 1-800 numbers and the websiteswe'd developed, people wanted to do what we were doing. Wequickly automated the way we raise private money, as well, andbrought that system out in 2010. We call that “Find PrivateLenders Now.”At this point, Memphis Invest has sold over 1,500 properties,and that number is growing like wildfire as we speak. Seventypercent of our buyers are from out of state; twenty-five percenthave never been to the state; and ninety-five percent of ourbuyers have referred a friend to us.So I ask you, do you think we might be doing something right?Consider what I said: We get buyers from other areas to investwith us in sleepy, little Memphis, Tennessee. And a quarter ofour buyers have never been here, yet almost all of them of refertheir friends, family, and colleagues to us. I mean we’ve11
discovered something, and I think the key is to learn from it.Hopefully, that's why you’re reading this.We have just recently moved into the Dallas market, and we’vegot some other markets on horizon as well. But this absolutelyworks; the numbers speak for themselves:Back in 2008, we flipped 208 houses; in 2009, we flipped 221; in2010, we did 211; and in 2011, we flipped 301. As of now in 2012,we’ve done 352. So we’re well on our way to flipping 600 thisyear. So I don’t care whether you’re trying to do 1, or 10, or 20, or100, or 500. I promise you, we can teach you somethingworthwhile.How Do We Do It?How do we do it? Well, we are very, very focused on the clients.As I said, it’s a client-based business, not a transaction-basedbusiness. And this is what I mean by that: we focus 80percent of our efforts on building relationships withbuyers. I want you to think about that. Everything you’ve everheard before is, “Go find a deal. Get a deal on the contract, andthen you can go flip it to anybody.” I’m not going to say that isuntrue, but I will tell you, if you're trying to build a business, andyou use a reverse wholesaling strategy, and you’re trying to do itin a very sensible way with little or no risk, with very littleinvolvement and little experience, you’re going to find it’sextremely beneficial to focus eighty percent of your efforts andrevenue-producing activities on finding buyers and building arelationship with them.You want to target and automate your market to buyersand sellers. You want to do what we call “shopping versusselling.” This means we go shopping for what buyers wantversus selling them what we have. And then, we tie all thecompensation around us to client satisfaction. Everybody that’s apart of our team, they’re just performing for the clients.12Old School Wholesaling Vs.New School WholesalingNow, let’s get started, and I'll tell you exactly what I mean by“performing for the clients.” You see, this is what I call “oldschool wholesaling” right here. What we do is this: we go out andget a property under contract. Now, many of you have heard ofthis before. Many of you have been to other training seminars, orperhaps you attended an event.You’ve heard gurus talk about wholesaling, or about any kind ofreal estate transaction. And in general, they say, “Go buy it, andthen sell it.” They say, “Go get it on the contract. Go find it. Gofind somebody. Go find a great deal.” I know that’s kind of anopen-ended comment. There’s a million different ways to find agreat deal. But the point is that the old way to do it was to go finda deal, and make a crazy, ridiculously low offer, and hopefully itwould get accepted. If it was accepted, then you'd start trying toget it sold.Then, once all the numbers indicated that you had a good deal,then you'd move to Step Two. Step Two of the old way was tostart marketing it to the client.Okay, I said “client.” But let’s be honest here. It’s not really aclient. A client is somebody whose needs you serve. In the oldway, you just kind of find somebody out there to buy your stuff.You don’t care whether they are client or otherwise. You aren'ttrying to serve their needs. You don't care if you are helping themin any way. You're just trying to find somebody to buy theproperty.I know many of you have some experience with this. I knowyou've gone out there and posted ads on Craigslist, and you'veposted about it on Facebook, and you've posted it on every singlereal estate marketing site that you could possibly find. You'vetaken out classified ads.13
You'd go to the local media meeting. You'd hang up bandit signsaround the neighborhood, looking for buyers. You'd hand outfliers. You'd do everything that you could possibly do to get itsold. And while you are doing all of this, you find out it isunbelievably nerve-wracking. You have all kinds of crazypressure on you, to the point where you're having sleeplessnights and butterflies in your stomach.You're going crazy trying to figure out how you're going to get thething sold and get to that payday.Old-School WholesalingThe following 4 steps are how most investors have been taught towholesale property and the reason many of them face crushingfrustration in their business.phone and call us. When they call us, we start interviewing them.We talk to them. We build a relationship with them. I’ve alreadytold you, eighty percent of our efforts go right into building arelationship; we build rapport.We’re just people hanging out with other people that happenedto have cash, and who want to buy real estate. We’re just gettingto know them. Once we understand who they, what they’re allabout, and what makes them tick, then we start identifying whatproperties they want to continue to buy.Remember, cash buyers are investors. They always want to buymore. Always. So we talk to them, we interview them, and we getto know them. We start figuring out through a series of questionsexactly what it is that they want to continue to buy.Then, once we understand what it is that they want to buy, onlythen do we go shopping.Step 1: Discounted Property under ContractStep 2: Actively Market to ClientsStep 3: Sell to ClientStep 4: Close on SaleHow “Reverse” Wholesaling WorksStep 1: Interview ClientsStep 2: Identify Items that Clients DesireYes, you can do that. It does work. But it's stressful, and risky,and I don’t want to discuss it too much. That's not what you'rehere to learn. You're here to learn about reverse wholesaling.Step 3: Locate Items that Clients DesireNew “Reverse” WholesalingWe grab our shopping car, and we start walking down the aisleand finding the items they want. They’ve told us that they want aparticularly type of house, and a particular type of neighborhood,with this amount of return-on-investment. They’ve told usexactly what's important to them, whether it’s schools orsecurity, or rental income, or no-hassle, or no repairs. We knowwhat they want. So now, we just go out and locate it for them.Once we locate it, we put it on the contract, and we turn aroundand flip it right back to our cash buyer. It’s nice and easy.Reverse wholesaling is a pretty basic concept. It all starts withnumber one, the buyer. We get out there and market to cashbuyers. We go find active cash buyers that are active in themarket. Make a note of that. Active Cash Buyers.We find active cash buyers that are in the market, that arealready buying. We market to them, and get them to pick up their14Step 4: Connect A to CStep 5: Close on Sale15
Everybody gets paid. We close on the deal, and we move on.5 Key Steps to Cashing In With Cash BuyersThis is how we do it.You may ask, what are the advantages to doing this? Well, thinkabout the old way. Imagine putting something on the contract,and hoping, crossing your fingers that you found the right kind ofproperty, in the right neighborhood, and at the right price. I sayhoping, because in the old way of doing things, you don’t have itsold. You just have to hope you run into somebody that wantswhat you have to offer.However, using our reverse wholesaling system, I have alreadytalked to the buyers, so I know this is what they want. I don'thave to hope. I know. They’ve told me exactly what they want topay. Therefore, I can quickly back into what I am willing to offerto the sellers I find. And that is how “no experience necessary”comes into play. It’s just very simple. If I know my cash buyersare willing to pay 110,000, and I know I want to make a 10,000 wholesale fee, then I absolutely know the most I can payfor the property is 100,000.That's just simple math. Without ever looking at a house, if itdoesn’t fit my budget and my buyers' needs, then I won't moveon it, period.So now let’s talk about how it all comes together. What are thefive key steps to cashing in with cash buyers? Clearly, I am ahuge proponent of cash buyers. And the reason I'm such a hugeproponent is this: because they are no hassle buyers.They make life easy. When I'm dealing with cash buyers, I don'thave to deal with any of the normal problems I encounter inother real estate transactions. And the reason I don't have thoseproblems is because there are no banks involved.There’s nobody between me and my buyer to screw up mypayday. There’s nobody to make it complicated. Cash buyers areinvestors. They’re paying with cash, which means they closequickly. Moreover, they want multiples, and this means I can sellto them again, and again, and again.Step 1: Find Active Cash BuyersStep 2: Target & Automate Your MarketingStep 3: Build Relationship with BuyersStep 4: Find Properties for BuyersStep 5: Close Deals Cash ChecksMost people don't fully understand this. If the only house you’veever purchased is your own home, then you probably don’t fullyunderstand how banks and loan officers interfere in a real estatetransaction. But when there are no banks involved and it’s justcash, you can close on a deal (buy it, sell it, and get paid), and thewhole deal can take less than 24 hours. It can certainly happenwithin seven days.I know that seems crazy. It’s almost like buying a car. You write acheck, you exchange the title, and boom! The car is sold. That isalmost exactly how it is for a property transaction, when a loanofficer is not involved. As long as you exchange a clean and1617
conveyable title, nobody cares. Nobody needs to wait. Here's themoney; let's go!can find them. You can see right on the screen. It returns thisinformation to you in a flash.What makes it complicated are the banks. So if you’re looking toget paid fast, if you're looking for quick payday, and you want toget paid within the next seven days on a deal, then you need acash buyer, because a cash buyer can close a deal that fast. Again,we focus our efforts on cash buyers, and that is one of the bigreasons why.For example, in Broward County, there were 11,627 buyers thatall paid cash for properties over the course of a summer. If youlook at these a little closer, you can see the city itself paid cash fora property. And a gentleman named William Mora paid cash foranother one. It lists every buyer that paid cash. The point is thatthere are thousands and thousands of buyers, just in that onecounty.So find active cash buyers. Target and automate your market intothem. Build the relationship with the buyer. Go find theproperties, and then close on the deals.Now, I’m not here to advertise for FindCashBuyersNow.com.That is not what this is about. I told you I'm not here to sell youanything, and, in fact, there's nothing here to buy, even if youwanted to. But I am going to show you exactly how it is that wefind cash buyers, fast.This is what we do to find cash buyers. We log in to our system,and we look up the state in which we want to find cash buyers.Then we look up the county, and we search public records forpeople who paid cash for real estate. Then we search for othercriteria, like whether they bought residential or commercialproperty. These criteria change, depending on the type of buyerwe want. But, instantly, our system searches and pulls the namesof cash buyers from public records.Pay attention to that. This data comes from public records.When you buy a house a property, it gets recorded and becomesa public record. When that happens, the software we developed(which has taken the industry by storm over the last three years),can pull your name out for us to look at. This is a system wherebywe can find every single cash buyer in the country, instantly.So there's no need for you to spend a lot of time hunting forpeople paying cash, or for the best buyers in the market. We’veautomated that for you. It’s all right there in front of you. You18And you can see a lot of other information, as well. You can viewthe property they purchased, the Zip code where that property islocated, how many properties in our database that they’vepurchased based on your search criteria, what the buyer’s phonenumber is, what the buyer’s mailing address is, the date ofpurchase, and the sales price. It is all in there.The software is extremely user friendly. To be perfectly honest, ifI can do it, anybody can do it. It’s designed for me because, quitefrankly, I’m not that computer literate. I just need it to work.Now, the next part is really important. It's the reason reversewholesaling works, and it lets you stay in control. What I meanis, you go and find buyers, and then you automate yourmarketing to them. Because what we want is for buyers to call us.Cold calling is usually what freaks new investors out. They say,“Oh, my gosh! I can't call a buyer! I don’t know what the heck I'mtalking about, right? I’m brand new to the business. I don’t haveany experience yet.” That kind of reaction is very common.So, what you need is a marketing piece that positions you assomebody worth talking to. You need a piece that positions youas somebody who can help a cash buyer, and in turn, make thecash buyer actually pick up the phone and call you. Because ifbuyers call you, you, the dynamic is different. If you call them,you come off kind of as someone who needs their business. Onthe other hand, if they call you, they need you. They areresponding your marketing because you have something theywant.19
So that is the next step: target and automate your marketing.Certainly inside of our system, we’ve already done this. So, forexample purposes, I’m going to show you what we do. If you haveor develop your own system, that’s great. My point is, do notspend a lot of time, effort, and energy trying to reinvent thewheel. If it’s already been done for you, take advantage of it anduse it. But you definitely need to have marketing pieces thatposition you as the market leader and the go-to company. Youhave to be very strategic about that, and using very powerfullanguage is important.I can’t even tell you how much we spent developing thesemarketing letters. If I had to guess, I would say we probablyspent somewhere between 110,000 and 115,000 testing andtrying out different things to perfect this particular marketingcommunication. We finally got one that works flawlessly, everysingle time. We haven’t changed this letter in over two yearsbecause it just continues to work. Why fix it if it isn’t broken? Itis effective, the language is very powerful, and we call it our“challenge” letter.With our system, we make it really simple for you. All you haveto do is plug in your logo. All you do is go input your basicinformation and add your signature. Again, I’m not trying to do acommercial. I really just want to talk about big picture stuff.So, automation: All these letters are generated for you instantly.That’s the kind of automation you want. If you’re going to sitdown and hand-type every single letter to every single cashbuyer, individually, then you're doing it wrong. That is not arevenue-generating activity. That kind of activity simply drainsthe life out of you, especially when there are systems in placewhere you can have it done for you for 97 a month. So don’twaste your time doing it; make sure processes like these areautomated. Send this off to a mail house to do it. Again, that’s allbuilt into our systems. If you’re not using our systems, and you’reusing some other system, please make sure that it’s built intothat. If it’s not, then you need to be talking to us.20Target & Automate Your MarketingThe Secret Challenge LetterThe Most Effective Marketing Piece for Having ACTIVE CASHBUYERS Contact YouPosition Yourself as: The Market Leader and The “GO-TO”CompanyBuilding Relationships with CASH BUYERSNow let's talk about how to build relationships with buyers. If itsounds like we're working backwards, that's partly true. We’restarting with the end in mind. We’re planning on building ourrelationship with the cash buyer, and that is the entire point.Once we have developed that relationship, we’re simply going togo shopping for what they want. This is a very effective strategy,and it all starts with the relationship.You have to know exactly what questions to ask. You need toinstill credibility, trust, and desire in your buyers. Those arethree very important issues that you must address with yourclients. Take it from someone who's done this for a long time.Those three emotions, credibility, trust, and desire, are thetriggers you have to hit and address.How do you do that? Well, first, you have to use objectionscripts. This means that you must understand what a buyer’sobjections potentially would be, and you must have cannedresponses ready and understand exactly what you should say. Know what questions to ask Create credibility, trust and desire from your buyersUse objection scriptsQuestion Based Selling TechniqueDetermine Your “HOT ZONE”21
Honestly, though, in most cases you will hear very few objectionsbecause, again, they’re calling you. If you call them, they’ll haveall kinds of objections, because you’re calling them as a solicitor.Consider how you feel when somebody cold calls you whenyou’re sitting down, eating dinner with your family. You get a callfrom a phone solicitor, and you're ready to throw the phoneacross the room, aren't you? Are you ready to do business?Of course not. That’s the reason why you don't want to be thecaller; you want to be called. You want to be hunted. You don’twant to be hunter. Again, that marketing piece makes thathappen.But when you actually get to the moment of a phone call, youshould understand that certain things may happen, and theremight be some objections. You need to understand what thosemight be, before the call happens. For example, a buyer mightask, “Why should I do business with you rather than somebodyelse?” You need to have a good answer for that. Moreimportantly, you need to have a series of questions prepared. I’mg
reverse wholesaling. Right now, reverse wholesaling is probably the single best strategy you can use to earn quick cash with real estate. I know that a lot of people throw around buzzwords and make overblown claims. But reverse wholesaling is the real deal.