BiggerPockets

The Wholesale Process

So you want to wholesale properties. I'll tell you that now is the time to do it. You can make so much money wholesaling properties in this real estate market it's not even funny. Think about it. No tenant headaches, no borrowing other people's money, no credit needed, no money needed at all. You get to buy properties and sell for a profit without ever taking title in your own name. No rehabbing, no working with contractors and the list goes on.

Sounds easy, huh? Well, the truth is that it is almost as easy as it sounds. But, if you don't know how to find those deals and negotiate with sellers then you will be wasting your time. If you don't know how to sell those properties fast, then you are just kidding yourself if you want to be a wholesaler.

So what are some steps that you need to take in order to run a successful property wholesale business?

Advertise: First and foremost you need to advertise. Advertising is key in any business. Run a continuous newspaper ad, put up some bandit signs, get a website, send out post cards, hand out business cards every where you go. Train your bird dogs so that they know exactly what you are looking for. Meet some realtors in your local area that can help you find some good deals. If you explain to your realtor what type of deals you're looking for, then using realtors can be powerful. Use your creative mind in your advertising and you will be successful.

Negotiate: Next, what you want to do is find the right property at the right price. The ideal home has 3 bedrooms with 1.5 baths. Grant it, we can't find those types of properties all the time. But try and get as close to it as possible. Now when your negotiating with the seller your goal is to buy the property 50 percent less that the after repair value. If you can get the property even cheaper than that's more money in your pocket. Make sure you create a win-win situation for everyone involved in the transaction and you'll be ok.

Investors: Now it's time to sell that puppy. Place an ad in the newspaper that says something along the lines of the following:

House for sale… Cheap!
Needs TLC. Must Sell
Call xxx-xxx-xxxx

When the investors call (trust me they will) take their names and phone numbers as well as their email address. Taking their email address is the key because when you get the next property all you have to do is push the send button. Make sure you let the investors know that you find those types of deals all the time and that you will email them when you have something.

Copyright © 2008 Jamel Gibbs
All Rights Reserved

Comments

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  Jason Bentley — about 3 years ago

  Jamel, I appreciate it when others take the time out to share insights that help others work towards their goals, so thank you for that. Your article leads me to think of a few questions though that have been a sticking point for myself and perhaps some others. Please also realize though that I ask strictly for informational purposes, NOT to dispute anything that was written. Initially, you mentioned that wholesaling takes no money at all, but follow up by saying that first and foremost we need to advertise. Wholesaling is one leg of my company that we're pursuing to build capital so that we can buy and hold. What we quickly found out is that wholesaling often DOES take money. The advertising methods you mentioned all do: newspaper ads, websites, postcards, and even business cards. To a relatively new investor or company, operating funds can be an initial barrier A.K.A. : limited. With that said, which marketing strategy or advertising avenue would you say could generate the highest likely return in quality and quantity of leads? I've heard newspaper ads don't return much for the money and am currently doing a direct mail campaign to two different types of categories. My response rate is at about 4% but capturing those willing to dump their property for even 70% ARV has been far from easy. If this process SHOULD be easy, I think myself and a few others would be happy to make some changes to make that true for ourselves as well. Sorry for that question being so long, I'll try to keep this next one short. With the "buy and hold" strategy seeming to dominate most investor purchases currently, are you finding that there are more investors out in the market willing to buy at 70% After Repair Value, and even up to 80% on a deal? Thanks, and thanks to those of you reading this comment. I'm sure adding any of your constructive insight will help those in our networking community.

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  Jamel Gibbs — about 3 years ago

  Jason, Thanks for asking such a great question. To answer your question, wholesaling IS an easy way to make money in real estate with very little cash needed. When I mentioned that investors can buy houses with NO MONEY I am speaking in reference to money on the deal itself. Obviously, being an investor yourself you would understand the concept of O.P.M. The same is true when it comes to advertising. There are many ways to use joint venture partners and have them pay for your advertising so that you can market with NOTHING out of your pocket. Flipping houses is easier than alot of people think. The idea is to take MASSIVE ACTION. You have to be consistent and market tremendously. For example, in my business I know that on order to get 5 deals a month, I have to view 100 houses. And in order to view 100 houses I have to get 500 leads a month. You have t do the same in your business. KNOW YOUR NUMBERS! That is vital is ANY business. The ol' saying, "It's a numbers game" is very true. Motivated sellers are everywhere. You just have to find them. ------------------------------------------------- House Flipping Made Easy www.HowtoFlipforProfits.com

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  Susan McCormick — over 2 years ago

  True, true and true! Thanks Jamel!