How to Elevate Your New Real Estate Wholesaling Business
This week, I want to pull back the hood and break down real estate wholesaling into three simple components for you.
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If you’re a beginner wholesaler, you are more than likely balancing multiple roles within your business—from generating leads and qualifying leads, to meeting with motivated sellers and marketing properties, etc.
After a while, handling multiple roles will become exhausting!
Today, I’m going to show you what’s involved in our business every day, and how we structure our team here in my businesses. As your wholesaling business continues to grow, you’ll want to hire a team to help take some of the responsibilities off your plate.
Let’s jump in!
The Business Model Breakdown
Regardless of which wholesaling strategy you choose, there are three essential components within a wholesaling business: acquisitions, dispositions, and transactions.
When you boil it down to the lowest common denominator, this is the skeleton of all things real estate wholesaling. Let’s go into depth on how to successfully do each part!
Acquisitions simply focus on acquiring the property. This is done by generating leads, acquiring new properties, following up on offers, communicating with motivated sellers, and converting leads into deals.
Here are three key skills that will make you successful in acquisitions:
1. Analyzing Deals
You must know how to analyze deals!
One of the very first steps to becoming a successful real estate wholesaler is learning how to run comps and analyze leads correctly. I’ll dive deeper into how to analyze deals a bit later.
2. Building Rapport
Our role as wholesalers is to help motivated sellers get out of distressful situations. In order to get our sellers to open up about these situations, we must genuinely build rapport, which will ultimately give you an idea of how motivated the seller actually is.
Which leads me to my next point…
3. Sensing Motivation
Now, as you begin acquiring leads on properties, you’ll begin to notice that many people interested in selling their properties aren’t truly motivated to do so. It’s critical that you learn how to sense how serious they are about selling a property.
4. Understanding Purchase Agreements
Additionally, you must understand purchase agreements. We have a very simple one-page purchase agreement for our motivated sellers. Once it’s signed, we pass the purchase agreement to our transaction coordinator for processing. I would highly recommend consulting with a lawyer to help draft up a purchase agreement in the state of your market.
Dispositions pertain to disposing or unloading inventory—everything from selling the property, building relationships with buyers, and marketing the property.
Here are three key skills that will make you successful in dispositions:
1. Building Rapport
Real estate is all about relationships!
Like acquisitions, when you’re trying to sell your property, you must sense the type of buyer you are working with. You must be able to get a feel for whether you’re working with an investor who is looking to make a one-time deal, or a long-term investor who will be a repeat buyer.
If you want to sell your property, you must market it to buyers and potential buyers.
We post our properties on our website, our local real estate investing association’s property list, and on Craigslist.
We also send new properties to our buyers through an email marketing software called Aweber.
Additionally, we also place two to three signs in front of each of our properties. We like to keep our signs simple and straight to the point:
•Asking (insert asking price)
It’s super simple and it works!
3. Understanding Closing Procedures
It’s critical that you understand various wholesaling closing strategies (assignments, double closing, the simple close) because you’ll need to communicate them in your purchase agreements with the investor-buyers interested in buying your properties.
Once we receive the signed purchase agreement from the investor, we then load the document into our internal software program and notify our transaction coordinator, who then processes it with our title company.
Now this is where you get paid!
Transactions focus on all things related to closing documents, purchase agreements, and title companies. They involve scheduling all closings between our company, the buyer, the seller, and our title company.
Here are three key skills that will make you successful in transactions:
1. Understanding Closing Procedures
You must understand the relationship between the title company and purchase agreements. Also understand how to coordinate schedules and how to write up closing documents.
We do all of our closings on Tuesdays and Fridays, so our transactions coordinator is responsible for going to the title company each week on those days. Sometimes we conduct email closings for which the transactions coordinator handles all of the coordination for as well.
2. Strong Organizational Skills
Organization is key!
There will be times when you must close multiples deals at a time. Organization will be critical because you’ll be handling all of the paperwork for each and every transaction. If you want to close fast, you must maintain organization to ensure each deal is closed properly and in a timely fashion.
Now, many of us choose wholesaling because we don’t want to deal with tenants and toils, but if you are selling a property that is currently tenant occupied, you will have to handle collecting rent, processing evictions, and other tenant-related issues.
There you have it guys: A full breakdown of the real estate wholesaling business right at your fingertips!
I hope today’s post has helped you begin to think about how you can develop a team within your wholesaling business, because let’s face it, you don’t want to be drowned with handling multiple roles forever!
Next week, I’ll dive into how to get the phone ringing with calls from motivated sellers!
Do you have any additional questions about the real estate wholesaling business? Ask them in the comments below!