Don’t Start Wholesaling Until You Read This: Wholesale Advice from a Fix and Flipper
Have you ever wondered how Google knows exactly what information you’re looking for after typing 2-3 words in the search box?
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How did Steve Jobs figure out the American consumer would go nuts over a little portable device that stores and plays our favorite music?
Who knew combining a pickup truck and a station wagon to make an SUV would be so popular?
And what genius at the Girl Scouts of America decided even the most health conscious individuals on the planet would be incapable of resisting eating an entire box of thin mint cookies in under 30 minutes?
Some might say that the creators of these products just got lucky. Others may chalk it up to intuition. Perhaps Steve Jobs had a “gut feeling” that the iPod would take off. It’s been well documented that he was a visionary. However, I suspect the answer is a little simpler than that.
Maybe, just maybe, the most successful companies and entrepreneurs today are doing something even more revolutionary than relying on a hunch to create new products and services for consumers.
I suspect they’re actually asking their customers “what do you want?”
The First Step to Becoming a Real Estate Wholesaler
Before you run out and buy a CD set from a guru, or pay $4,997 for a weekend boot camp, or spend $20 for a book about it at Barnes and Noble, or stress out about whether or not you have the right purchase contract and disclosures, find a real estate investor in your area that might actually buy a property from you.
Now I’m not talking about building a “buyers list”. What I’m suggesting you do is figure out where the buy and holders and fix and flippers are in your market and ask them “what do you want?” Explain to them that you want to get started in wholesaling and are looking for some direction. You need to know their preferred acquisition price, rehab budget, desired rate of return, tolerance for risk, etc.
Where can you go to find these prospective buyers? Here are a few places:
- The courthouse steps – bidders there are usually looking for deals.
- A title company – chances are their escrow managers work with at least 1-2 real estate investors.
- Realtors – some may have clients that are investors.
- The tax assessor’s office – search the tax records in your area and look for buyers that purchase more than 10-15 properties a year, or more. Contact them by mail, phone, etc.
As a fix and flipper, I have buying criteria in place and a formula for calculating my maximum offer/bid price for a property. I share this information with wholesalers, Realtors and anyone else that can bring me a deal because I want them to know exactly what I’m looking for in a deal. I even give them the contracts, disclosures and language I use to put the transaction together. I offer this information and feedback for free because I want a good deal. So do most buy and holders and fix and flippers I know.
Can you imagine McDonalds creating a new sandwich without doing market research and taste tests to make sure the buying public would eat it? Of course not. So why would you build a website, start sending out direct mail, door knocking or cold calling before determining what the buyers in your market are looking for?
Don’t get caught up in the mechanics of structuring a wholesale deal. Stop making excuses for getting started. Go find a few willing buyers, and then find them a deal.
Photo: Fey Ilyas