In my business, I am asked the same few questions again and again by those who are new and looking to get started in real estate wholesaling.
So, I figured that for this week, I would help all my friends who are new to real estate investing and simply answer all of the common questions out there, so that they can refer back to this post in the future.
Hope you find this helpful!
The Answers to the Top 5 Questions Asked by Aspiring Wholesalers
1. How do I find a mentor?
My advice in finding a mentor is pretty straight forward.
- First, go and set up a keyword alert for your specific market.
- Then you should create a post on the BiggerPockets Forums, stating what market you’re looking to invest in and that you’re looking for advice on how to find an ethical mentor in your area. This will help promote you with other people who have keywords set up for your area, but make sure you don’t say, “I’m looking for a mentor in my area. Any takers?” That will get you kicked off for solicitation.
- After that, I’d be on the lookout for established wholesalers and investors in your area who pop up from your keywords.
- Once you find a few that look interesting, send them a private message suggesting that you’d like to take them out to coffee. Look for keys of their ethics and integrity, making sure they aren’t scammers and looking to rip people off at any given opportunity.
- If you like them and they seem like a good fit, then ask if you were to find some deals, if you could bring the deals to them for them to buy and then offer a 60/40 split (they get 60%) if they’ll agree to walk you through the process of closing on it/selling it. And state that you’d obviously do a lot of the leg work; you’d just need to be shown what to do. This is a crucial step: You must add value to them. Don’t just go expecting them to hand-hold you through the whole process. They’ll want to know that you’re actually willing to take action and that they have a benefit to working with you as well. It needs to be a win-win, you know?
- Next, you want to offer that if they have any other needs in their business, that you’re really hungry to get involved and to learn the business, so if they need help answering phones, cleaning toilets or whatever, you’d love an opportunity to work with them and help them out.
- Then, if they agree and offer you something, actually do it!
- Once they agree, you now need to begin looking for deals via free resources (here’s a good guide to get you in the right direction). Also, consider driving for dollars, posting signs at coffee shops, etc.
- Some additional tips would be for you to learn how to run comps and analyze deals the best you can (search the BP blog for the 65% rule for wholesalers), and then when you think you have one that might be a good deal, bring it to the investor and ask him to confirm your comps and give you feedback.
- Then if he likes it, boom: You now have a real estate mentor, and you just rinse and repeat moving forward.
2. How do I find a deal with no money?
In response to this, I first want to address a different issue altogether. I’d encourage you to try all you can to get a marketing budget.
Now there are a lot of ways to get started in real estate investing using other people’s money, but there is nothing wrong with the old fashioned way of saving up and paying for things on your own.
That said, I think one of the easiest ways to find deals is to go to Craigslist and filter through all the crappy stuff to find the gold. In my market, at least, there are still great deals to be had on Craigslist; it just takes a lot of time to find them. If you dedicate yourself, create a system, and stick to it, Craigslist can be a source for your first couple of deals until you can save up for a direct mail campaign.
You can also go driving for dollars, post ads at local coffee shops (as mentioned above), go to networking events, and so on.
The key is that you now are a real estate evangelist, so let everybody and their mama know that you buy real estate for all cash.
3. How do I close on a deal with no money?
Well, the easiest way is through tying up a property and then going and finding a buyer to assign the contract to for a fee (though there are a lot of risks with this strategy, and you want to make sure you have a lawyer look over the contract, to confirm that you’re structured properly).
Another great way is to “partner” with someone who has the money. So you can bring the deal (like your mentor you just found in the first question) and have them pay for it.
The best way, in my opinion, is through connecting with a mentor and/or partner who can fund your deals.
If a new person came to me with a potential deal, it would almost be a guarantee that I’d mentor them (just as long as they’re serious and take action).
4. How do I find a buyer?
One of the easiest ways to find a steady flow of buyers is through listing all of your properties on Craigslist.
You won’t have the greatest quality of buyers, but you will definitely have a consistent flow.
Beyond that, go to networking events, and every time the mic is open, go up there and plug your business and your inventory. This is another fantastic way to find buyers.
People are always looking for property. So as long as you have legitimate deals, you’re going to be just fine!
With time, the buyers will add the sellers who are most enjoyable to work with to a list of contacts and will pursue relationships with them.
If you do this last step well, you’ll find yourself having a good handful of consistent buyers that are pretty much always there to buy your property.
5. Should I have my license as a real estate investor?
It has been my professional experience that having a real estate license has done nothing but helped me in my business. The biggest advantages are that you get full access to the MLS and can save a ton of money on brokering your own deals instead of having to pay out commission fees on each deal you buy or sell.
The disadvantages I hear people say in my opinion don’t hold that much weight. Having to disclose everything in your transaction is a GOOD thing, and having a higher standard of professionalism over your head will only help you serve people better. If it was up to me, I’d say get your license it’s far worth it!
I hope this post helped you today Are there any other pressing questions you may have?
Drop them in the comments section and I’ll do my best to answer them for you.