4 Reasons Why Real Estate Wholesaling Doesn’t Work for Newbies

4 Reasons Why Real Estate Wholesaling Doesn’t Work for Newbies

3 min read
Marcus Maloney

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. Marcus has been named the “Equity King” for his impressive ability to find real estate opportunities with massive amounts of equity.

Experience
Marcus, a high school dropout, went from G.E.D. to M.B.A. Although his education has a major impact on his investment philosophy, the real impact came from his upbringing.

Marcus thrives on completing successful transactions. As a young kid, his parents and grandparents faced many challenges; as a result, it made him think of ways he could help. His mother and grandmother were avid investors—not in the market but in people. Marcus was a recipient of those investments. And his early years were hard work growing up on a farm.

Marcus was a strategist at an early age. To relieve the burden of his family buying him clothes when it was time to return to school, he decided to make a small investment that paid big dividends. Marcus decided to purchase a small piglet at the beginning of summer, feed it until it became fat, and then sell it to a local farmers’ auction before the school year started. This was one of his first transactions and the beginning of his adventure of finding equity in every opportunity.

Marcus’ hard work continues today: He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who wholesales virtually in multiple states while building his investment portfolio. Although wholesaling provides great money, he saw the opportunity to buy some of the deals he found and convert them into cash flowing rentals.

Marcus currently holds seven rentals, two of which are commercial units. He’s also done the unimaginable and purchased a school, which was converted to a daycare center. Again, he turns what is a marginal profit into a significant equity position. He leverages the equity by using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy to increase his portfolio without any money out of pocket.

Marcus has been featured on numerous podcasts, such as the Louisville Gal Podcast, the Best Real Estate Investing Advice Ever podcast, FlippingJunkie, and many others. He’s currently a featured blogger for BiggerPockets, the largest community of real estate investors in the world.

Along with completing transactions and working to build his portfolio, he provides mentorship to aspiring investors. This is done through one-on-one interactions and through his successful YouTube channel and blog.

Marcus does utilize his M.B.A. for more than real estate. As a consultant for a successful non-profit institution south of Chicago, he uses his expertise in the development of human capital. His philanthropic efforts help existing stakeholders develop in their capacity to serve those in need of assistance.

Education
Marcus completed his M.B.A. in 2011 from Olivet Nazarene University.

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I have been giving of my time by having phone conversations with newbie real estate wholesalers. In speaking with them, I’ve noticed theses recurring themes that speak to why they are either unsuccessful or can’t get started. I would like to share these with you — especially those of you who are new.

If you’re new and haven’t truly started, or new and are not having success, you may find yourself in one of the following categories:

  • Your skeptical
  • You’re afraid to make a mistake
  • You’re misinformed or over-informed
  • You’re Inconsistent

Let’s briefly dive into each one of these. At the end, evaluate yourself and see if you are hindered by one or more of these categories.

1. You’re Skeptical

Something very common in real estate wholesaling: You start to believe it’s to good to be true. You’re truly right, everyone talks about the glitz and glamour of being a real estate investor and wholesaler, but the harsh reality is it’s a very demanding job in the beginning.

You find yourself skeptical because it’s explained to be so easy. You watch a few YouTube videos. Read a few blogs, and you think you’re ready to rock and roll — until you dig a little deeper.  Once you start digging, you understand that there are more intricate pieces that you need to know.

Then you become a skeptic. Everything you hear, see, and believe about real estate investing (and wholesaling in particular) you view through a skewed lens of doubt and disbelief.

The end result for skeptics is that they never do anything because they don’t believe, no matter how many testimonials they see on social media sites.

Related: The Ultimate Beginner’s Guide to Real Estate Wholesaling

2. You’re Afraid To Make A Mistake

This is all psychological. People who are afraid to make mistakes can talk themselves out of doing anything.

Trust me. It’s OK to make a mistake. You will bounce back from it.

If you’re trying to invest perfectly (find the best deal, create the perfect marketing piece, trying to find the perfect situation) guess what? That only happens by luck. Seriously. By not being afraid and doing the little things consistently, you will luck into perfect deals. Luck only happens when you’re doing something.

So be prepared. Look at mistakes as teachable moments. I had an epiphany one day; I was making a phone call and dialed the wrong number. The computer-generated operated said, “If you made a mistake, hang up and try again.” This is the approach I take. If I make a mistake (after doing my research of course) and the end result is not what I planned, then I find where I went wrong and try again.

You will learn best by doing!

3. You’re Misinformed or Too Informed

I hear this to often. I just heard this today: “There’s so much information out there about real estate wholesaling; how do I know what is valid?” I say a lot of it is valid, but is it applicable to you and what you want to do?

There is a lot of information out there, and biggerpockets.com is a great resource to gather information. But the information is not the actual problem. The issue is that the new investor is not focused on what they want, and then it becomes too much information.

When there’s too much information, newbies begin focusing on all the information — and not application. Guys, remember: Focus is a real thing, and you have to know what you want to do before doing anything. It shouldn’t take you a year to figure out what you want to do in real estate.

Related: The Newbie’s Guide to Wholesaling in 7 Simple Steps

4. You’re Inconsistent

This is a major momentum killer in real estate wholesaling. You get started doing something and then stop. You get started again and then stop.

You have to decide, either you’re going to invest or you’re not. We all have things that happen. It’s called life. You have to decide no matter what, I am going to be consistent and not stop.

A lot of this is dealing with the psychology of change. With wholesaling, the mechanics are not the difficult part. What stumps most people is muscle right between their eyes. Don’t talk yourself down. It is possible. It is doable.

Remember the majority failures happen before you get started.

Do you struggle with getting your wholesaling business off the ground?

What do you need to move past information into action? Leave me a note below!