Top 3 Newbie Wholesaling FAQs—Answered!
Does wholesaling make you feel stupid at times? If you answered yes to this question, you’re not alone. I respond to a lot of comments on my YouTube channel about wholesaling. Many people are confused and feel lost when it comes to starting. The purpose of this writing is not to delve into the intricacies of wholesaling—because I and many others have done this already. I will answer the five questions I’m often asked.
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The Top 3 Newbie Wholesaling FAQs—Answered!
1. What is the best way to get started?
FYI: You’ve started already, but most people stop without taking consistent action. Yes, by reading this article, you’ve shown interest in wholesaling, and that is the first step. Stop believing this will happen overnight. You have to start with education.
Education is essential to becoming a successful wholesaler.
I am not talking about the quick crash course to $5,000 in 30 days. I’m referring to the education you need about your specific market, trends, and marketing. There are many times I see people buy a course or read a book and try to get started, but they know nothing about their market. These courses try to incorporate a one-size-fits-all approach, but every market is different.
2. What should I get educated on first?
What areas are in high demand? Do you know the average days on market? What is the estimated rehab cost per square foot? What are the buying criteria for a certain area? What are investors in the area looking for—to buy fix and flips, rentals, single family units, or multifamily units?
Educating yourself and being able to answer these questions is step one in truly being able to get started. So, if you’re trying to find deals and you cannot answer these questions, you’re going to have a problem.
It’s OK to be a newbie, but it’s not OK to not have done your homework.
First, do you know what a motivated seller is? Honestly, this sounds like a very stupid question, but I have to inform newbies repeatedly that all sellers who respond to a marketing piece are not motivated. For example, if the seller is fixing the property up and they say they will be ready to sell when they are done, this is not a motivated seller.
Related: A 60-Day Action Guide to Wholesaling Your First Property
Please, I’m writing this so you won’t look stupid. A seller looking to sell $5,000 below market is not motivated.
Identifying motivation is an art; it’s like digging for gold. Not every stone you see will be a gem, but by continuing to dig, you will encounter that rare find.
So what if you feel uncomfortable asking the seller how much they owe on their mortgage? The art is asking open-ended questions without being intrusive. Learning this technique is only done by building repetition. So if you need to make mock calls with a friend, partner, or spouse, please do so.
The key for finding motivated sellers is for you to identify the problem and have them acknowledge it. Some sellers will clearly have a problem but are not willing to admit it. These people may need some coercing before they are ready to be forthcoming.
There are many forms of marketing. You will need to be specific on who you will target and how you will target them. I will not go into depth here because marketing is a blog post in itself. However, I will inform you that whichever form you use, consistency is the key. The number of times you reach out to a seller must be a minimum of six touches. Others may suggest more, but six should be the minimum.
Here are some marketing tools:
- Online: YouTube Videos, Targeted Social Media Ads, Web Page, Blogs
- Offline: Direct Mail, TV Ads, Radio Ads, Newspaper Ads, Door Knocking, Cold Calling, Bandit Signs
Once you’ve identified your marketing strategy, you will need to identify your target population. This will be incorporated with knowing your market like I spoke about above.
You will look like a complete idiot and waste money if you do not identify these metrics before starting. Marketing will be expensive, and I’m sure in the beginning most newbies don’t have money to waste by doing something incorrectly.
3. What resources do I need?
This is a very valid question. Besides money, the most important resource will be cooperative relationships that help you progress. You will look completely incompetent if you’re trying to do a deal and you don’t have these resources and relations at least initiated.
Here are just a few: real estate agent, buyers, title agent, attorney, wholesalers, contract, assignment agreement, conversational skills, positive personality.
Related: 5 Ways to Lose Your Wholesale Deal (After Signing the Contract)
You will not know everything, and each deal can present different challenges. Having solid resources and relationships will help you a lot. I’ve needed attorneys on some deals, and I’ve needed title agents on all deals. Real estate agents are very useful, as well as other wholesalers to bounce questions off of. I am very appreciative of my resources and relationships and work very hard not to damage or neglect them.
I want you to be brutally honest with yourself: Does wholesaling make you feel stupid at times? I can truly say yes. Even though I’ve been doing this for numerous years, I still find myself dumbfounded by some of the deals I’m working on.
If you’re a seasoned investor or a newbie and wholesaling, have you felt stupid at one point?