Real Estate Wholesaling

Three Pitfalls to Avoid When Getting Started as a Wholesaler

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Wholesaling houses is a great way to make quick cash in real estate with very little risk or upfront investment. Like any other money-making niche in the real estate arena, there is a learning curve that you will need to work through if you want to become a successful wholesaler.  Following are three pitfalls that many wholesalers make while working through the learning curve, and that you should avoid at all costs.

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  • Jumping in Without Studying the Market First

If you’re serious about becoming a successful wholesaler, you absolutely need to take the time to study your market and find out what a deal is before you go out and start putting properties under contract.  Many people want to skip over this step because it can be quite time consuming, and as a result, end up with properties under contract that they are not able to find buyers for.  Do yourself a huge favor and commit to spending as much time as is necessary studying your market and determining what constitutes a good deal.  Doing this will take you more time and effort upfront, but will pay off huge dividends when you hit the streets and start making offers.

  • Information Overload

While it is certainly necessary to get a proper education before you jump in and start taking action, many beginners get caught up in a vicious cycle: buying course after course and never actually putting the information to use.  Once you get the basics of wholesaling down pat (and after you have done your market research), it is imperative that you start taking the information that you’ve learned and putting it to good use.  We all know that there is a never-ending stream of real estate education products hitting the market, and you don’t want to get caught up in the cycle of buying each and every one of them in search of the magic pill.

  • Taking Advice From The Wrong People

If you want to become a successful wholesaler you should be getting your advice from and modeling yourself after other successful wholesalers.  Ignore everyone else.  Many beginners make the mistake of approaching Realtors, mortgage brokers, or other real estate professionals and asking them for advice about wholesaling.  This usually leads to a conversation that ends with the wholesaler being told that what they are trying to do is illegal.  Save yourself the headache, and get your advice from wholesalers who are out there doing deals and cashing checks.

So there you have it, folks- three pitfalls to avoid if you’re just getting started as a wholesaler.  Now it’s time to get out there and start making things happen!

Good luck, and Happy Wholesaling!

    Nnanna
    Replied almost 10 years ago
    Everything here sounds reasonable, but as per information overload, how do you know when you have enough information?
    Stephani
    Replied almost 10 years ago
    I suppose it is different for everyone, but I’d say as a general rule of thumb that if you’re on your 3rd or 4th wholesaling course, it’s time to stop spending money on education and start taking action. I know people who have been buying courses for over five years and still have yet to make an offer.
    Nick
    Replied almost 10 years ago
    Those are the same ones who swear up and down they know absolutely everything 🙁 Experiencing a deal in action teaches so much more than any course could ever provide, wouldn’t you agree?
    Stephani
    Replied almost 10 years ago
    Without a doubt. There is absolutely no substitute for getting out there and taking action. It’s scary, though, especially in the beginning, and unfortunately most people are never able to get over that fear and jump in . So they keep buying courses…
    Neil Uttamsingh
    Replied almost 10 years ago
    Hi Steph, I especially like your last point, “Taking advice from the wrong people.” One big mistake people can make with real estate money making strategies is to listen to the wrong people. Personally, I am glad that I learned some time ago to only listen to those who had d proven track record in whatever it was that I was trying to achieve. If they do not have a proven track record, and they are offering you advice on what to do and what not to do, don’t listen to them. What do they know? Only listen to those that have blazed the trail before you and have achieved the results that you too are trying to achieve. Onwards and Upwards, Neil !
    Stephani
    Replied almost 10 years ago
    Amen, Neil! Thanks, for commenting. 🙂
    Stephani
    Replied almost 10 years ago
    Amen, Neil! Thanks, for commenting. 🙂
    Nnanna
    Replied almost 10 years ago
    Stephani, what are the 1 or 2 courses you would recommend? In general I’m a little leery of ‘courses’ that cost hundreds or thousands of dollars. My theory is that if I can learn a new programming language with a $30 book, no topic should be complex enough that I need to spend 30x that amount of money. Pls don’t let my rant detract from what you think are the 2 best methods/courses to get started
    Stephani
    Replied almost 10 years ago
    Well, if you don’t want to spend any money on your education, you can always learn by asking questions and searching through the archives on forums like BiggerPockets. It will take you more time to sift through all of the information, but it’s free. It’s hard for me to recommend a course if I don’t know what niche you are looking to get into. That’s something that you have to decide for yourself, as it will vary depending on what your own personal situation is, and what you are looking to accomplish…
    Nnanna
    Replied almost 10 years ago
    Hi Stephani, I was talking about getting started in wholesaling. That’s the area I was hoping you could make recommendations for books/courses.
    Stephani
    Replied almost 10 years ago
    Oh, OK. Sorry about that. I thought when you asked what method was best, you were referring to which niche to get into. The only wholesaling course I ever bought is Steve Cook’s Wholesaling for Quick Cash. I highly recommend it. I think it’s a few hundred bucks, but well worth the money if you actually take the info and put it to good use. If you’re interested in REOs specifically, I wrote an eBook last year that is available on my blog. It’s $47 . It’s not anywhere near as detailed as Steve’s, but it gives you the information you need to do a deal. I’ve also heard good things about Vena Jone’s Cox’s wholesaling course, but I haven’t reviewed it myself, so I don’t know for sure.
    Carter
    Replied about 7 years ago
    Hi Steph, Great article! I have also thoroughly enjoyed your website and all of its helpfulness regarding wholesaling. I am less than two weeks away from going to settlement on my first wholesale deal. However, I am stressing majorly! My attorney just called me today and said that I may be liable for a 2nd real estate transfer tax. Have you ever heard of this? How did you find the settlement company that does your closings? I assume there are ones that are more friendly and understanding of assigning contracts, as well as ones that aren’t. Any help and guidance you can offer at this point would be greatly appreciated. Thank you!