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How to Start Wholesaling: Getting Past The Education and Into the Field

by Brandon Turner on January 25, 2013 · 47 comments

  
How to Start Wholesaling

Today in the forums there was a question asked that I thought was so great I want to share it here on the blog for everyone to read. Do you struggle getting started? Have you read the books, conversed in the forums, commented on the blogs, and listened to the Podcasts – only to be stuck? Do you hear the gurus talk about how easy wholesaling is? Do you wonder why you can’t seem to take the first step? This was the issue one BiggerPockets member brought up today. In summary, he said:

“I want to get into wholesaling, at first. Why can’t I begin the process? I keep getting overwhelmed…somethings missing. dont i need an attorney for the forms? shouldnt i just come out and let the investor (buyer) know i am a wholesaler?? where do i get the forms?? sigh. I will keep reading. i will keep posting. but i dont know if ill ever “get it”. I have a feeling I am going to foul up a couple of these before I get it right. Anyone know this feeling??? i want to take cruises and be financially free. i want to get out of my cubicle (yep, im in it right now!) and work smarter! help!”

Does this sound familiar? The following is my answer to that question. If you have any thoughts – please add them to the comments below AND head over to the forum post and leave your comment there as well.

How to Get Started Wholesaling: The True Story

The following is my response, taken directly from the forums:

Hey… I feel for ya! I think the problem is trying to jump into a system that you didn’t grow organically. It’s like trying to instantly have a business with 50 employees and millions in sales when you never ran a business before, or getting a truck-load of materials delivered to build a house when you’ve never done construction before. Sure – there is a pile of materials, the blue print is there, there is plenty of advice, but it wasn’t gained organically so it doesn’t always make a difference.

There are a million guru guides and programs that will give you the exact, step-by-step, process for talking with sellers, what to write on your bandit signs, etc. Yes – this stuff will probably work, but these are just the building materials delivered to your job site. The gurus claim “all you need to do is this simple 10 step process” but in reality – no two deals are the same. If all you do is follow the steps outlined by a guru – you’ll be lost in no time. You have to grow your knowledge, skill, and business techniques organically

So, How Does One Grow Organically?

Well, I think you are starting out right. Being involved in the BiggerPockets Forums is a great way to get connected with guys who know what they are doing. I think it’s important to decide fully what you want to do – which it seems you have. Asking questions in the Forums – answering when you can – and just being a common face helps people to like you and get to know you.

Second – I think it’s vital for a wholesaler to FIRST get connected with some local buyers before worrying about bandit signs, scripts, or anything else. I don’t mean “build your buyers list” (that will come with a good deal) but just get to know some local guys who are buying property. This could be buy-and-hold guys, house flippers, or whatever. They are the ones who are going to buy your deals eventually. They need to become your best friends, your mentors, your partners.

Whatever it takes – you need to become friends with these guys. Offer to work for free to help them out. Provide value to their business. Tell them you want to bring them deals – and you want to learn the business by doing so. If someone earnestly came to me and said that, I would take all the time in the world to explain exactly how to do it, step by step. Funny thing is – no one has ever approached me out here to offer me deals. Maybe wholesaling isn’t alive in my area – or maybe there is no one willing to do the work.

These mentors (or even just one mentor) will tell you what they want and how they get it. They will take you under their wing and help you get started – because both of you will make money. It’s a win-win. Yes, this relationship might be hard to start – but real estate investing is hard work.

Be sure to listen to the first episode of the BiggerPockets Podcast also, cause Marty talks about the best way for a wholesaler to succeed. It’s really amazing.

The Truth About Wholesaling

A final note on wholesaling: I don’t know the numbers, but I would estimate that 90% of people who try to get into real estate investing start with wholesaling because it seems that it’s quick, easy, and cheap to get into. Of those 90% – I would guess only 10% of people actually ever do a single deal. Which means – for every 100 people who want to get into real estate through wholesaling, only 1 person ever actually makes money.

So what am I saying?

Wholesaling is a J.O.B. It’s a job that takes money to start (yellow letters, postcards, bandit signs, direct mail, postage, etc) and a lot of sales ability. The payoff MIGHT be worth it – but it might not. The Gurus make it seem like the end-all best thing ever – but in reality: it’s tough.

So – be sure that wholesaling is the JOB you want.

  • If your dream job is to wake up in the morning and be a math teacher: then go be a math teacher.
  • If your dream job is to wake up and rescue poor animals: go be a vet.
  • If your dream job is to approach hundreds of people in rough places in their life, convince them to sell their property to you for much less than its worth, and find other investors to buy it: Then be a wholesaler. There’s nothing wrong with it – but it is a JOB.

Whatever your JOB is – make your investing separate. Begin with your house. Do you own your own? Can you buy a duplex, triplex, or 4-plex to live in and rent out the other units, gaining experience in landlording? How about finding an extra job delivering Pizza, saving up the 20% needed for a down payment on a small investment property? That is true investing, and that’s going to give you wealth – not a script from a guru.

Thoughts? Leave your comments below AND also be sure to leave your suggestions on the actual forum thread!
Photo: Vincent_AF

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{ 46 comments… read them below or add one }

Travis Daggett January 25, 2013 at 11:49 am

Great advice, Brandon!
It’s important for people to separate active vs. passive real estate investing. Wholesaling is definitely and active strategy. In other words, “you” are the business. If you don’t work, you don’t make money.
Passive investing=you don’t work, you still make money. Seller financing, holding rentals (using a property manager), private lending, etc. fall into this category.
So, unless your last name is Kennedy or Hilton, you’ll have to start active and move into passive.

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Brandon Turner January 25, 2013 at 3:18 pm

Thanks Travis,

I agree completely. There is nothing wrong with wholesaling or flipping as long as people understand that this is active income. Thanks for the comment!

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Brian Gibbons January 25, 2013 at 12:11 pm

Quote:
So – be sure that wholesaling is the JOB you want.
If your dream job is to wake up in the morning and be a math teacher: then go be a math teacher.
If your dream job is to wake up and rescue poor animals: go be a vet.
If your dream job is to approach hundreds of people in rough places in their life, convince them to sell their property to you for much less than its worth, and find other investors to buy it: Then be a wholesaler. There’s nothing wrong with it – but it is a JOB.” end quote

Brandon I love this. Reminds me of “What Color is Your Parachute?” A book about how to find your real passion.

I like the idea in principle of wholesaling, but its like the car business: finding someone really desperate and taking less than wholesale price so you can add value (detail and clean) and sell retail with financing.

I like instead to find sellers of pretty houses (no rehab) that can not sell (why? usually bought at top of the market 2006 – 2008) and convince them to let me lease option as a principal and then assign the deal for fee. They get full retail for their beautiful home and no seller’s concessions, no closing costs, and no agents’ fees.

Advantage with LOA (Lease Option Assignments) vs Wholesaling.
No buyers list needed. I can fill a house in 1 week.
No rehab knowledge needed.
No Greedy RE Investors that want to pay me $250 for a finders fee so I make a tiny profit. No transactional funding.
No fear of not finding a buyer.
No complicated marketing.
And little competition really.

Wholesaling is challenging.
The money is made in the Simultaneous Closing (flipping) to retail buyer.

IMHO being a rookie in REI is tough, and the reason why so many people do quit is they try wholesaling and do not like it for a multitude of reasons.

Your comment about finding a mentor is fine in theory, but many mentors aren’t great either.
If you just go to the library and check out books on real estate investing, learn local property management laws, and attend your REIA, you will invest your time shrewdly, and not pay alot.

And read everything on Biggerpockets! Its f R E E!

Btw, REI Rookies, Have you seen all the free stuff here? http://www.biggerpockets.com/rei/

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Brandon Turner January 25, 2013 at 3:20 pm

Killer comment Brian! I’m intrigued by the lease option idea, so question for ya:
What do you do when they owe more than it’s worth? Nothing?

Thanks!

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Brian Gibbons January 27, 2013 at 12:36 am

“What do you do when they owe more than it’s worth? Nothing? ”

If a seller has a pretty 3-5 bed in a great school district, has a fixed note and not an ARM, we look at PI mortgage paydown. Where is the break even point?

When people bought at the top of the market, say 2006-07, they paid too much for the property to have any equity in 2013, esp with 3.5% down and costs rolled into loan.

Most people understand that the 1st 10 years on a loan is mostly interest, see http://20smoney.com/2010/03/09/how-much-of-your-mortgage-payment-goes-towards-loan-principal/ . So if I get an 30 yr amoritized loan started at 2007, the tipping point is dependant on the interest rate.

But to get to the point that the house that is “underwater” by -10% to be 0% can be 5 – 10 years, the RTO Buyer would need to rent for that time.

One of the strengths of RTO to help mildly underwater sellers is rent out for market rent and get more in the form of an option payment.

Here is an example.
House bought at 2007 for $550K with 3.5% down, 6% 30 yr note
House today comps at $500K
Balance on loan is $530K
Estimated monthly payments are $3,177.62 (including taxes, insurance, and PMI if applicable), and you will pay $613,942 in interest over the life of the loan.

But what if market rent is $2000 and PITI of the loan is $3,177.62? Are the sellers going to feed the $1,177.62 a month difference?

What if a Tenant Buyer would pay 2 payments, $2000 market rent and $1,177.62 a month Option Payment? for 7 years? That would help the seller alot to decrease the underwater amount.

There is a risk that the comps/appraisal value will decrease, but there is a risk in everything in life. Chances are this deal will help both parties:

- Sellers will get a Tenant Buyer to live in their home, keep it pretty, and pay their PITI in the form of rent and option payment to negate their underwater status to zero.

- Tenant Buyers will have a long time to build up a history of on time payments, build a position in the property to get an excellent loan, especially if they get a great FICO coach to increase their FICO score, and enjoy a quality home in a great neighborhood and a wonderful school district.

There are safeguards for the Buyer I insist on, such as a 3rd party payee service to have the payment go from the buyer to the 3rd party payee to the PITI directly, then the excess goes to the Seller. This prevents the PITI not being paid.

3rd Party Payee
http://allservicing.com/Contact_Us.html
Contact: Melissa
$25 set up, $15 per month PI to bank
Taxes and Insurance – ask her

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Jason Pulley February 28, 2014 at 12:12 pm

Thanks for information Brian, and for the phone call followup. The website you refrenced helped explain many options.

Karen Rittenhouse January 25, 2013 at 1:27 pm

Brandon:
You said it so right, “wholesaling is a j-o-b.” One reason the commenter may not have done one yet is that so many definitions make wholesaling sound easy. It’s not. We would LOVE to pay people to bring us deals. “Wholesalers” come into our office on a regular basis and typically start the conversation with “what will you pay me?”

We will pay a lot if someone brings us a deal. But here’s the thing – a “deal” is not a “lead.” We can find plenty of leads. The wholesaler must find good leads and negotiate with the seller until they reach a deal. Now, the wholesaler can come to us — with a great deal AND an agreed to great price. Most don’t want the hassle of negotiating (which drops it back to a “lead”), and most don’t want to spend money on marketing to find deals in the first place.

We are perfectly willing to buy wholesale deals if any of you out there are actually wholesalers who can bring the deal to us. Why people expect wholesaling to be easy and profitable is beyond me. You still have to find the deal, negotiate the deal, and be willing to turn it to the next guy for very little profit.

Happy wholesaling!

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Brandon Turner January 25, 2013 at 3:21 pm

Hey Karen – I’m the same way -I’m willing to pay well if someone would just bring me a good deal. I spend too much time writing these days to find good deals! Where are all the real wholesalers around here!? :)

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Royce Allen June 5, 2014 at 11:57 am

Wholesaling is hard but I am actively looking for deals every day. I am new to the business so I am lacking a solid buyers list. My strategy is to wholesale and make the capitol I need to invest in rentals and flips.

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Nichole January 25, 2013 at 11:38 pm

Man! I wish you folks were in MY neck of the woods, because I’m WILLING to bring the deals AND treat my business like a business (which means marketing among other things!) I dont’ understand the whole lead thing.. where the fun in THAT! HA! The whole point it to go as far as I can into the process without using large dollar amounts that I don’t currently have! Hoping I can find some ready investors out this way.. Love this blog and the forums and all the info. I’m learning! Brandon, you rock! Thanks for taking me through this journey – step by step! See you on the other side! :D

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Nichole January 25, 2013 at 11:40 pm

ps: Would love to learn more about the LOA! Maybe that’s a future blog post or podcast?? :)

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Brandon Turner January 27, 2013 at 6:04 pm

Thanks Nichole! I bet there are investors just like me in your backyard- they just don’t publicly announce themselves in front of hundreds of thousands like we do :) A great way to find them is through real estate agents.

Yes – lease options assignments are a very interesting avenue. Brian Gibbons (above) is a pro at those things. Also check out “Making Big Money Investing in Real Estate: Without Tenants, Banks, or Rehab Projects by Peter Conti and David Finkel – which does a nice job explaining.

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Nichole January 27, 2013 at 11:01 pm

Thanks again, Brandon!! I’ll definitely contact a few tomorrow! And I’m also gonna get my hands on that book! Thanks so much! :)

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LaKesha Raynor January 27, 2013 at 5:16 pm

Brandon, I am so glad that you shared this blog post. This is so how I feel. I am wanting to get started in investing but I am limited in monetary resources and knowledge. I began looking for a way to get started and thought that wholesaling would be a great entry. I went to a seminar held in my area this weekend and they basically put it the same way as you did…I would be basically a dealer or (worker) not an investor. I, like Nicole, wish you were in my area. I am willing to learn what is necessary to get started. I also loved the other blog post that I got in my email this week by Marty Boardman “Don’t Start Wholesaling Until You Read This: Wholesale Advice from a Fix and Flipper”. It reiterates what Brandon is saying about finding a buyer and figuring out what they want. So that is what I plan to do. I gave myself until my birthday, about one month from now, to get started. I don’t want to have analysis paralysis. :)

BTW, I am so glad to have found this site. It was during my search on one of the guru’s that I found a lady that had a 3 year forum post that gave me more knowledge than I would have ever thought possible. Kudos to you all on such a great resource!

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Joshua Dorkin January 27, 2013 at 5:56 pm

Hey LaKesha – I just wanted to jump in to welcome you to the site. Please be sure to jump in and set up an account on the BiggerPockets social network so you can jump in and start connecting on the forums.

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LaKesha Raynor January 27, 2013 at 6:05 pm

Thanks Joshua! I signed up after reading the forum post that I spoke about in my reply earlier. After finishing my last post, I went and updated my profile. I plan to be a permanent fixture around here! Thanks again for the welcome!

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Brandon Turner January 27, 2013 at 6:06 pm

Thank you LaKesha! Like a said to Nichole – those investors are all around you, so finding them should be your goal! It’s great you have a deadline for beginning. I’d now recommend you have a “Next Action Step” which basically means “what is the single next step you can take to get to your goal?”

I’d suggest, as Josh said above, making your next action step joining BiggerPockets and begin reaching out to people in your area and really nailing down exactly what you want to invest in.

Thanks for the comment and keep in touch!

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LaKesha Raynor January 27, 2013 at 6:09 pm

I plan to do just that Brandon. Like I just said. I just finished my profile and I am about to try to make some connections. I want to start pulling the trigger! I will continue to read the blogs and forums. I am loving the education. My next step, find an investor in my area this week!

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C.J. Jones January 31, 2013 at 4:45 pm

That’s my problem also.I am currently getting all this information from all these gurus of real estate,yet I just can’t seem to just jump out there!For one thing I don’t have a buyers list,an attorney,a title company,an agent,and all the other stuff you need to succeed and close a deal.I vowed that if I just successfully close my first deal,that would get my juices flowing,and get me pumped up,and pretty much just rinse,and repeat.

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Brandon Turner February 3, 2013 at 9:15 pm

C.J. – definitely jump into the BiggerPockets forums and start dealing with REAL investors, who are actually doing it everyday. It’s a world of difference – and a whole lot cheaper! (free!) Thanks for reading and commenting!

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Samantha February 3, 2013 at 8:14 pm

I strongly disagree with your comment on wholesaling as a “job”. I am a real estate investor in Dallas and have numerous rental properties in the area, some of the best deals I have found have come through wholesalers, real wholesalers who operate a real business.

The most successful wholesalers I know treat this as a BUSINESS not a job. There is no get rich quick, no money scheme in wholesaling. Its a business, ask the guys spending $4,000+ on marketing every month, but consistently close on 4+ houses every month as well. The most difficult part in wholesaling is like any other business, when you first start your journey. Ask the restaurant owner who operated in the red for 2 years. When you starting from nothing, it takes awhile to build momentum. Similarly, wholesaling, like any other BUSINESS, takes awhile before your target consumer is familiar with you and your service. Which coincides nicely with what our very own Sharon Vornholt. Showing how the first time you mail a motivated seller the average response rate is about 2%, but as your BUSINESS builds momentum and you mail them for the 4th or 5th time, the response rate really starts to pick up, in the neighborhood of 60% plus. But like any good BUSINESS putting yourself out there and having a consistent message, month to month, with a consistent budget, the momentum will begin to build. Thats why most wholesalers fail, they go in with the get rich quick scheme, if you approach it like a business, and hang in there you will succeed.

Here is Sharons blog post im referencing.
http://www.biggerpockets.com/renewsblog/2012/12/04/how-to-use-direct-mail-successfully-in-your-business/

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Brandon Turner February 3, 2013 at 9:14 pm

Hey Samantha, I actually agree 100% – we are just using different words. A job, for me, is something you do every day to earn money, but ends when you end (this could be working for McDonalds or owning your own business – it’s still a job.) An investment is an action you do once and create income whether or not you work. So wholesaling is a job (and a business) because it’s dependent upon trading time for dollars. There’s nothing wrong with that, at all, and I do it everyday. BUT there is a distinction between jobs and investments, which was my point. Some people think that wholesaling is a way to passive income, which it isn’t. So we agree, I think :) Thanks for the comment!

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Brittney A. August 14, 2013 at 12:52 am

Hi Samantha!

You’ve just made me SUPER excited! Just joined BP and one of my goals is to find as many people from Dallas to network with as I can. Guess what Miss Lady, you’re my first one!! So, hello, it’s nice to meet you, you’ve given me hope, I’m so excited, yay!!!

Phew, now that I got that out of my system, I am pretty new to this website so I am not too keen on its functionality. Is there a way I can message you directly? Or could I please have your email address? I have so many questions and I am so eager to get started, I just need a little direction.

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Joshua Dorkin August 14, 2013 at 7:32 am

Brittney –
Why don’t you start with our Start here page? It should help you get going…

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Jennifer April 11, 2013 at 12:50 am

Brandon,
It’s funny because getting started is the hardest part. I was Realtor for a while years ago. Moving back to Portland I have found myself getting back into it. I can find the houses, I just can’t fund them. I get the principles I am just not so sure of how to present them. I believe having the ability to convince people into selling, investors into investing and buyers into buying is the largest factor. I don’t consider myself a salesperson the only part of this equation I am missing. I am starting a unique service for investors, and real estate professionals that will help me build organically.
The key is creating benefit for all parties involved and delivering it.
That being said I guess I should to throw this out there… I am willing to throw you some deals for some subject 2 mentoring. :)

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Brandon Turner April 15, 2013 at 12:47 pm

Thanks for the comment, Jennifer! Yeah, I’ll look at deals all day long, though I bet Portland is WAY above my price range!! :) And I’ve never even done a Sub-2 deal yet (I worry about them…long story!) But let me know how I can help you out anyways! Be sure to check out my post “How to Invest in Real Estate with No Money

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Jennifer April 18, 2013 at 3:15 am

Brandon,
Well for starters I’d be interested hearing that story. :) I don’t want to do anything stupid. Just getting out there and talking to people who are in distress is the hardest part for me. I can find properties and crunch numbers all day long but until I actually talk to them I will never do any deals.
So I am working with a couple people, we are (hopefully) off to a good start.

Jenn

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Junior Salters May 3, 2013 at 10:44 am

Very insightful words as usual Brandon! Yea I read the post from Marty explaining that you first need to really build not all connections but friendships and mentorships through people who have been through what you’re trying to succeed in. I agree that will be the best place to start!

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Brandon Turner June 11, 2013 at 11:23 pm

Thanks Junior!

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Ruth June 11, 2013 at 9:23 pm

Thank you….so …much… I thought it was just me! I thought I was doing it all….wrong! I work hard and spend more money than I want to with wholesaling, and I have not closed a deal yet; close but no cigar and after two years this is more that a job; because I am paying out and nothings coming in.

The gurus lead you to believe that its so easy…. I have five or six different wholesaling programs, thinking one may be better than the other, then I started returning them. They are all the same; they just copy each other; sometimes word for word.

This is NOT the job for me, however, I will find my niche.
Thanks
Ruth

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Brandon Turner June 11, 2013 at 11:23 pm

That’s excellent Ruth! Keep plugging away. Wholesaling is just another Job. Some might love it but for others, it’s not right. Let us know how we can help!

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Lashinda July 12, 2013 at 6:23 pm

Hello,
I am a new wholesaler in Houston and would like more information on forms/contracts needed and where I can find them? I have partnered with a couple of other experienced wholesalers and investors helping them find deals and learning the business. I’ve begun marketing my own company and would like to be prepared with forms when the time comes. I’ve emailed the wholesaler I work with but would like to know where I can get it myself as well.

Thanks!

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JimTx July 22, 2013 at 1:42 pm

But you never told him where to get the FORMS! lol :)

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Angela Himmelreich October 3, 2013 at 11:13 am

Wonderful blog post Brandon. My husband and I are just starting out and it’s posts like these that will point us in the right direction. Thank you!!

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Alisha February 8, 2014 at 11:59 am

Hi Brandon and Joshua,

I listened to your pod cast with Lisa Phillips & loved it. I decided to sign up with BiggerPockets.

I’m a newbie in REI and this article is a great confirmation for me. Ever guru I listen to kept saying its easy just Find Buyers, Find deals, Make Money. WHATTT!

I began setting aside time each day to actually become familiar with the RE market.

I work full time and realized this path is not going to happen over night. Thank you for this article.

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Joshua Dorkin February 8, 2014 at 12:32 pm

Hey Alisha –
Thanks for reading and listening to the podcast. I strongly recommend listening through to the rest of our shows and I hope you’ll check out our Ultimate Beginner’s Guide to REI — that’ll get you off to a good start! If you have questions, just ask on the forums — we’ve got the largest and most active FREE community of people helping one another online. We’re here to help!

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Alisha February 9, 2014 at 5:06 am

Awesome, Thank you Joshua! I’l be sure to check it out.

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Bilal February 21, 2014 at 6:44 am

Dear Brandon thank you very much for the direction to this post it’s good info the most informative part about making relationships with buyers I’ve been bird dogging for years which made me know I wanted to be a investor the problem with this is I was only bird dogging for one investor whom I’ve sense name greedy GUSS!!! Because GUSS!!! Made an agreement with me if I bring him the house or the buyer I’ll get 25% of the profit if I bring both I’ll get 50% sounds good I’m in made up flyers start getting calls I’m, bringing both some times just house, buyer or both remember I know nothing about nothing now this relationship goes on for years and every Singal deal I get paid the exact same amount common sense told me NO WAY!!!!! But I didn’t want to mess up the money I was getting not only was I not getting the agreed amount but GREEDY GUSS!!! Wouldn’t teach me the business and I understood why because greed is blinding he didn’t understand that the more knowledgeable the people are that work with you the stronger and more successful your business is so I confronted GREEDY GUSS!!! And of coarse what came next is what I feared most GREEDY GUSS!!! Then said If that’s what you think this will be our last deal needless to say I stayed and this went on and off for years finally I broke it off went back to a job meanwhile I’m still getting calls from buyers again don’t know what to do with them other than GREEDY GUSS!!! So I’ll call GREEDY GUSS!!! Every now and than to put a deal together ask him to teach me the business you already know it never happen so I start going to seminars which brings me to brings me to bigger pockets A GREAT THING!!!! I need to know exactly how to tie up the properties what I can or can not do in New Jersey wholesaling AND HOW TO FIND MORE PROPERTIES CHEEP thank you advance please HELP HELP HELP!!!!!

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Chloe April 8, 2014 at 11:48 pm

Brandon – I thoroughly enjoyed this article! It is very informative and encouraging. I agree 100% with Angela about how helpful I found it.

Brian, Karen, and Samantha – Your response posts were enlightening, educational, and somewhat comforting.

Bilal – Your post was amusing while I sympathized with your situation. I hope you will find an empathetic mentor in your area soon.

Joshua – I received your welcome email when I joined and I’ve started my journey to fully benefit from BiggerPockets (currently via a free membership and migrating to a paid membership by end of year).

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Brandon Turner April 9, 2014 at 12:29 am

Thanks Chloe! I appreciate it! And I look forward to you joining the Dark Side of a Pro membership soon :)

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Marie May 2, 2014 at 1:32 pm

The first house I bought to rehab and sell I bought while I was a full time practicing attorney. My sister and i (we were law partners) decided we were going to invest in real esate too. Without taking a single course in anything related to real esate and without knowing anything about renovating houses I said to my sister the VA is having an autcion today on a peice of propeorty in the nieghborhood we grew up in. Take this cahsier’s check for the deposit and go bid on it. She said ok and went to the auction.
I went about my business doing a million other things and when I saw my sister later in the day I asked her what happned at the auction. She said we won the bid. I was shocked.

I went over and looked at the house. It was four blocks from where we grew up. i arranged for the finanicing went to settlement and closed on the house. The house needed substantial repairs. I hired a handyman/carpenter with no plan. He did a few reapirs.

I knew nothing about how to develop a plan to renovate the house. I kept the grass cut and the yard neat and I paid the note of $1,000 a month for a year. I then decided to sell the house as is. I took a loss because I sold it for enough to pay off the mortgage but not get enough money to get back the closing costs and the mortgage money I had paid.

So the first moral of the story is to do something other than just read. The second moral of the story figure out how to do something that will make some money. I have purchased 6 houses and a small apartment building. I taught myself how to be a general contractor and renovated the apartment building inside and out completely.

There is too much information now. Find one or two sources of information that seem complete. Read them. BiggerPockets is one of the most straight forward real esate teaching sites that I have seen. Develop a business plan for your real estate business using some inexpensive software. Develop a daily, weekly and monthly plan for taking action and take action.

All real esate investors make mistakes and life goes on. If you don’t want to make a mistake go into another line of business. If you must figure something out and you will. Real estate is wonderful. jump right in and figure out something aspect you want to do and take action. I am now teaching my daughter how to invest in real estate.

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Richard May 14, 2014 at 10:42 am

Wow so much info, brain can not take the strain argh!!!! Sorry just had to put that in lol, thanks for the heads up Brandon, I was going to do fix and flips but I actually do have a J.O.B. where I actually do some work, sigh, and getting tired of getting nowhere fast. I am working on trying to close my first deal on a Fixer-Upper and its basically a converted Duplex, Wife’s idea is to live in the Downstairs part and rent out the upstairs part to pay (or partially pay) on the mortgage which will make it cheaper for us. And seeing I work for, gasp, 7-Eleven making 10 cents above minimum wage (been there for almost 5 years) and yes I have been getting raises, when the minimum wage standard raises I get a raise lol keeping it at 10 cents above. The young man who owns the franchise can not pay us anymore then that, the store is not a high volume store and he is lucky if he can pay all the bills on the sales the store generates including Payroll. The only person that is saving any money in my home is my son (we live in a Low-Income Apartment) and its mostly pennies. Everytime I find a penny either on the floor when I clean the store or in the parking lot out in front, sometimes even walking home (yes I walk home, don’t own a car and I owe on fines which made my license suspended) I put it in a 5 Gallon Water Bottle. Couple of years ago my son decided to donate his collection of pennies to help less fortunate children for Thanksgiving/Christmas (not realizing he is one of those considered less fortunate). His 4th grade class was having a contest to see which classroom can raise the most money (don’t know what the prize was). I had to carry those dang pennies to his classroom so he can donate them, let me tell you those pennies where heavy as all get out. It took 4 students to count all the pennies and it came to a total of $81.16 to say the least his class won the contest. Ok, I am rambling on here so sorry, my point though one of the members here contacted me the other day basically offering to be my mentor so if I have any questions about Fix and Flips I can contact him meanwhile seeing I am seriously strapped for cash myself, my wage just don’t cut it, he highly recommended that I do wholesaling, so besides this wonderful gentleman I am currently looking for investors in my area to see what they want, what is the magic number for them to purchase a peice of property (Residential, Commercial, etc) and yes its not easy. In fact I find it easier as a REI to do the same thing but when one lacks transportation I have to go for the Wholesaling aspect of it, and yes again I agree it is hard work and its even harder when one is limited on income but I will succeed. I gave myself 3-4 months to get my BUSINESS going, at least strong enough to where I can cut my Graveyard hours back to 2 days a week (no I am not quiting my J.O.B., the young man needs all the good help he can get with what he is paying and IMHO I feel I am one of his strongest workers there with the exception of the Store Manager) so I can devote this BUSINESS Full Time. I did it before (see my other posts) and loved it, my wife loves it as well, the money aspect of it lol and again yes I know its a lot of hard work, you can not succeed without getting your hands dirty no matter what those other Guru’s say lol, so thanks again Brandon for your wonderful site.

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Rick June 12, 2014 at 8:14 pm

Hi Brandon,
My name is Rick. I am in the same situation as many of your readers. I have a lot of materials from the geru’s telling me all that I should do to invest in real estate. They all tell me what to do, but no one is telling me how to do it. I am pretty sure of what I must do, but I have no idea of how to. I live in Ca. specifically in the central valley. Is there any one that you know that might be willing to take me under his/her wing and show me the rope. Someone who would be my mentor and actually show me how. I am willing to do anything/everything to learn real estate investing. I will shadow him/her and I would be willing to work for nothing for awhile just to see some actual real estate investment deals. So Brandon if you know of any one in my area of Ca. that is willing to be a mentor to me, I would appreciate if you would contact them or send me their information and I will contact them. Oh yes, thanks for the great information you provide me and everyone who needs it. It really does help, and it also inspires us to go and do it.

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Lutonya August 10, 2014 at 8:39 am

Wow. So deep and very true. As a “new” soon to be investor, I immediately knew wholesaling would NOT ORGANICALLY be a good fit for me. Making money off others misfortunes seems weird, it wouldn’t come natural- Very well written. :)

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Lutonya August 10, 2014 at 8:42 am

Brandon,
Do you have any wholesaling exp. Or just flipps and buy n holds? Just curious :)

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Frankie Law August 21, 2014 at 2:45 am

WOW Brandon!

This is the type of advice that I want and had been looking for the past 10 years in my life! Words that needed to be said, a realistic expectation of what investing entails. You really struck home the whole concept of “What to do” vs “How to do” for me.

Now that I know more about wholesaling, I am more dedicated and motivated to know more about wholesaling. Yes, even if it is like a job, but the trade off is that I get a lot of experiences.

Thank you for this post.

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