Real Estate Wholesaling

The 6 Most Common Newbie Wholesaling Questions, Answered!

Expertise: Personal Development, Real Estate Wholesaling, Real Estate Investing Basics
96 Articles Written
wholesale-question

Welcome to 2017. I'm sure most of us are excited about the new year, along with the new opportunities it will bring. Since it's already the second week of the year, many already have their goals outlined. This is great. I took a little time over the break to read many of the post from newbies looking to start their career as real estate wholesalers, and I've found some recurring questions that often get asked.

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6 Most Common Newbie Wholesale Questions: Answered Now

I want to make sure you get off to a great start in 2017 by answering these questions. You will generally find these questions in the forums; however, they either go unanswered or the answers vary tremendously.

First, you maybe asking yourself — is Marcus legitimate enough to answer these questions? To remove any questions about my legitimacy, I will just say this: I’ve been where you are, and I remember the pressure I put on myself to get started. Still, I did not know where to start and who to depend on. I remember the anxiety when asking a question, thinking to myself, “Is this a dumb question? Why is no one willing to help? How can I put all the information I’ve learned from hours of YouTube education into practice?” I remember those feelings like it was yesterday. I am not here to tell you how many deals I’ve done or anything like that because it’s not about me. It’s about getting you started in the right direction.

Now, since we have all the preliminaries completed, let's get started. Here are the 6 most common newbie wholesaling questions according to my research on BiggerPockets.com. These are in no particular order.

Question #1: Is wholesaling illegal?

This is normally the first hurdle we have to jump. You may think to yourself, this can’t be legal because it sounds too good to be true. To answer the question, YES, it’s legal. Many people question this because they say you are brokering a deal without a license. I am licensed now, but when I got started, I was not licensed. I will discuss the license in a later question.

Wholesaling is legal, but you will need to be strategic in your verbiage on your contracts. Remember, this is not legal advice so you should consult legal counsel yourself. It should be noted on your contract the buyer’s name as ABC Wholesalers and/or Assignee. Also, feel free to have an open discussion about this verbiage with your seller. Keep in mind, you want to do everything in the highest level of integrity. At no point do you want to hide anything from them. Your goal after having a fully executed (signed) contract is to then market your agreement to potential buyers.

If you are unclear about question #1, feel free to ask questions in the comment section. You have to have a clear understanding of this before you can proceed.

hire-a-contractor

Question #2: How do I find a mentor?

This question is asked so often that I believe it goes unanswered in the forums now, so let me help you with this. I'll answer like this — in the Bible it says, "Ask and you shall receive, seek and you shall find." Lao Tzu states, "When the student is ready, the teacher will appear." You will only find a true mentor when you are ready. How do you know when you're ready? When you're taking massive action.

Many newbies are looking for mentors, but they are not looking for deals. A true mentor will not acknowledge your request unless you provide some value. You need to ask yourself whether you’ve been consistently driving for dollars (emphasis on consistently), whether you've started a small direct mail marketing campaign, whether you've put out bandit signs, and whether you're knocking on doors or cold calling. What are you doing? If you are just trying to learn from YouTube, turn the computer off, beat the streets, and talk to people.

How do you find a mentor? Start taking action on some of the things you’ve learned. I swear to you, once you start doing this, you will find your mentor — or better yet, they will find what they are looking for in you.

Question #3: How do I find motivated sellers?

Reread question #2. I put some great actionable tips you can use to help you find sellers in there. Again, you have to tell everyone you know what you are doing — I know you may be ashamed to tell anyone because you haven’t done a deal yet. So what? You won’t do a deal because a lot of times, you find deals in the most unexpected places.

Here, let me give you an example to prove my point. I had someone refer a newbie to me. They knew I’d been closing transactions and could help sellers. This person gave the newbie my number, and we began to talk. He told me how he spent nearly $30K on one educational seminar, but still didn’t have anyone he could contact to help him navigate his way through a deal. To make a long story short, I asked him, “Who in your circle knows what you are trying to do?” He stated, “Just a few people.” I told him to go back and tell those people he was seriously looking to buy property. He did that — and I’m being honest — his brother said, “Well, why not buy my property? I want to sell it but have not told anyone.” We are under contract right now on both legs of the transaction, and he is finally getting hands-on training.

You find motivated sellers by taking action, by cold calling, starting a direct mail campaign, putting out bandit signs, and calling "for sale by owner" listings. You have to get out there and beat the pavement.

Question #4: What should I say to a seller? (I have no money to buy their house.)

You are absolutely right — you have no money to buy their house, but you will have the money by the end of the inspection period. Stop second guessing yourself. You have to speak to sellers with confidence. A seller can smell rookie fear. Before speaking with the seller, build your confidence. Whatever you need to do to become a bulldog, do it.

When speaking with a seller, you need to do more listening than talking. Ask the necessary questions, such as:

  • Is there any particular reason you’re looking to sell?
  • If everything was perfect, how would you want the sale of your house to go?
  • As a buyer, is there anything I should be concerned about with regard to the house?
  • What are the repairs that are needed?

Always ask open-ended questions and then shut the heck up and let them talk.

Again, you want to find out about the house, but more importantly, you want to find out as much about the situation as possible. What are the motivating factors that drove them to speak with you about selling?

Question #5: How much do I offer for their house?

OK, now this is a science, and it varies from market to market. Most people use the rubric ARV x .70 – Repairs -Wholesale Fee = Max Offer. This is a great starting point, but again, each market is different and some markets are more aggressive, so you can push the envelope a little. Please use that as a starting point.

Normally, the next question is how do I estimate repairs? I discuss that in another post, “Wholesalers: Having Trouble Estimating Rehab Costs? Try This!" When making your offer, be confident. Even though you may be shaking in your boots, kick those boots off and make the offer. Who cares if they don't accept make the offer? Studies show that only 1% of those you market to respond, and only 1% of those may lead to a deal. So the the numbers are stacked against you regardless.

Question #6: How do I find buyers?

There are two ways to answer this question:

  1. If you have the property under contract, work with a local wholesalers that have experience. You can find them by Googling “sell my house [your city]fast.” They will have a buyers list, and they will be able to handle the disposition for you. It is my experience that finding a buyer is not the issue because as long as you have a nice deal, anyone will either buy it or help you sell it.
  2. Now, if you’re looking to build your buyers list and you do not have any deals, create ghost ads on Craigslist. Also Google your city again with the same verbiage because a lot of cash buyers are trying to find houses like wholesalers. There are also products out there to help find cash buyers. You can review all the real estate sales in a certain area that sold for cash, and there is your cash buyer. Send them a letter letting them know you would like to offer them off-market properties first.

Bonus Question: Should I get a license?

My suggestion is yes, if you are looking to become an investor with longevity, you need to have a license. It opens up other avenues for income. You can do traditional sales and property management, you'll have access to the MLS, and it provides a level of credibility.

Conclusion

I wanted to write this post because I see these questions go unanswered. Please, if you still do not have your questions answered, feel free to ask. No question is dumb if you don’t know the answer. I’m sure there are many other questions I could have attempted to answer, but again, if you have questions about contracts, assignments, or anything else, please ask.

Any other wholesaling questions?

Ask them below!

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who ...
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    David Todd from Lake Forest, California
    Replied over 3 years ago
    Hi Marcus, Great article. I appreciate the tips you have provided. I like the idea of using the “sell my house fast” google results to find someone to help with the beginning deals. Take care, David Todd
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    David, Thanks for reading I’m glad I could be of help. “Enjoying the Journey”
    Mike Ismail from Frederick, Maryland
    Replied about 3 years ago
    Hi Marcus, Great info. Very helpful. Do I need an attorney to draw up the contract? Assuming the seller has agreed and we’re taking the next step. Any advance is much appreciated. Thank you Mike
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied about 3 years ago
    Mike, I have a contract that you can use as a rubric but it is always good to have an attorney for your state review your contracts this way you know you have support in the event litigation may occur. You can get the contract here http://equityrealestateblog.com/ its free no upsale or anything like that.
    Jason Frabotta
    Replied over 2 years ago
    hello Marcus, this is great . I have a question. what self education material do you recommend for someone who dose not know anything about wholesailing
    Sam White Rental Property Investor from Dallas, TX
    Replied over 3 years ago
    Marcus, for mail campaigns, can you elaborate on where you buy your lists, what date filters you use, and how many letters must be sent to generate workable results. My experience in sales tells me 1% rule. 100 letters = 10 call backs = 1 closed deal. But I am not sure if my B2B sales is the same formula.
    Sam White Rental Property Investor from Dallas, TX
    Replied over 3 years ago
    Marcus, for mail campaigns, can you elaborate on where you buy your lists, what data filters you use, and how many letters must be sent to generate workable results. My experience in sales tells me 1% rule. 100 letters = 10 call backs = 1 closed deal. But I am not sure if my B2B sales is the same formula.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Sam, You are right Sam when it comes to direct mail you will get similar results to B2B sales with your results. However in some markets you may even less than a 1% response rate. It all depends on the market because some are more competitive than others. Check out this blog post https://www.biggerpockets.com/renewsblog/direct-mail-wholesaling/ it should help clarify your mailing list concerns. I am doing a small A/B test for the year I am currently doing a 2000/month testing to check my letters and envelopes to see what is pulling the best. I normally do about 6000-8000 pieces a month. If you have additional questions PM me and we can discuss it. Hope this helps “Enjoying the Journey”
    Vaughn Smith Real Estate Agent from Verona, NJ
    Replied almost 3 years ago
    Another great article! Thanks again
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied almost 3 years ago
    Thanks for reading Vaughn, I have other articles that I’ve written and resources at equityrealestateblog.com. Teaching videos as well and everything is free, again thanks for reading
    Randy Phillips
    Replied over 3 years ago
    I’ve been wholesaling RE for about 4+ years now. Some of your suggestions are right on and things I do. However, I don’t advise anyone to become a realtor. Dealing with the laws and restrictions and all the BS is not a good way to enjoy your life. I’ve had a lot of bad experiences with know it all realtors that have ruined my deals by telling sellers what I was doing was illegal. Most are know it alls and believe they have the equivalent of Real Estate law degrees because the did a 3 day class and got a re license. I also wonder why newbies believe they need a mentor, because they don’t. I got my education by reading a few books and taking action. Wholesaling RE is so easy a monkey could do it. Selling my deals to my surprise is the easiest part of wholesaling. If you have an insane deal at 40-60% of ARV a simple ad on Craig’s List will have hoards of investors calling and that’s how I got my cash buyers list. I have done a lot of deals and made a ton of money. I get my deals from direct marketing to absentee owners, bandit signs, door knob hangers, partnering with other wholesalers and my favorite, I recruit bird dogs and pay them $2,000 I actually wrote a book called “Big Buks Junk Houses” It’s on Amazon Kindle. It’s only $2.99 It is all you need to know how to make some serious money wholesaling Real Estate and change your life. Rando
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Randy, Thanks for reading. The reason why I’m an advocate for getting your license is because it gives you an opportunity to diversify your investment strategy. Yes there is additional rules and guidelines you have to follow but as long as you’re doing everything according to the letter of the law you should not having any issues. It does make a big difference what brokerage you get with. Similar to finding a investor friendly title company this is the same with a brokerage. If you have the license you can provide an additional option for the sellers. If they do not accept your offer you can offer to list the property and still gain a commission versus not closing the deal. Thanks again for your input. “Enjoying the Journey”
    Denise Brown-Puryear from Julian, North Carolina
    Replied over 3 years ago
    Great article Marcus! But I also agree with RANDY PHILLIPS regarding licensing. I’m a licensed RE Broker in NY and am investing in NC where I now live. I’ve looked at the licensing requirements in NC and find that too much liability is on the realtor. Plus, the realtors that I’ve used to do my 1031 purchases were not as competent or on top of things as I felt they should have been. However, I do find that in NC it is easy to do assignments, wholesaling, etc. as compared to the NY where an attorney is required to close on any deal. Which is why I’ve jumped into the wholesaling aspect of investing at this stage of my RE life. Again, thanks for such a clear and simple article without the ego! :c) Thanks.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Denise, thanks for your input regarding the license. I know this is a split topic for many wholesalers however I have found it to be a benefit. Many times I speak with sellers and they inform they’ve spoken with other investors that were not licensed and they did not feel doing the deal with them even though they were offering more. It provides a level of credibility and comfort for the skeptical sellers. As I stated in response to Randy it also gives you another strategy to close the deal where you can list the property and still gain a commission versus not gaining anything and it becoming a dead lead. You are absolutely right there are some horrible Realtors in the industry but you’re normally not working with the Realtors you’re working directly with the sellers. I do know there are times when you do have to work with Realtors and during them times there is a mutual level of respect. Again its up to each individual, I rather have another tool in my tool box. Thanks again for your input. “Enjoying the Journey”
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Rando, Thanks for reading. The reason why I’m an advocate for getting your license is because it gives you an opportunity to diversify your investment strategy. Yes there is additional rules and guidelines you have to follow but as long as you’re doing everything according to the letter of the law you should not having any issues. It does make a big difference what brokerage you get with. Similar to finding a investor friendly title company this is the same with a brokerage. If you have the license you can provide an additional option for the sellers. If they do not accept your offer you can offer to list the property and still gain a commission versus not closing the deal. Thanks again for your input. “Enjoying the Journey”
    Melissa Guthrie from Mount Pleasant, Michigan
    Replied about 3 years ago
    Hi Randy, I am going to check out your book on kindle but can you give me the names of the other books that you read as well? I am very new to this I just learned what wholesaling was last night and am SUPER interested in making my first deal I just don’t know where to start. I almost signed up for a 1000 dollar program but stumbled on this site. I’m glad I read your comment because I was actually considering becoming an agent. Do you have any tips for someone who is starting off like me I basically have zero dollars to sink in to this to start as I am a single mom but am looking at changing my life with wholesaling! From what I understand wholesaling IS legal as long as in the contract you add verbage that you can assign the contact to someone else is that correct? Do you have tips on how I could draft my contract? Thanks so much for your help!!
    Joe Taddonio
    Replied over 2 years ago
    How Much money do you make on average per month?
    John Mathewson from Schererville, Indiana
    Replied over 3 years ago
    Love the information. Great for those looking to get started in wholesaling.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    John, thanks for reading. Learn all you can then take ACTION.
    Aaron Dibble
    Replied over 3 years ago
    The contracts are the only thing stopping me from pounding the pavement. I have a contract to purchase I got from myriepro. I have access to assignment contracts threw the software as well. My only concern is are these legal to use in CA? Every one say ask a lawyer. I don’t exactly have the cash to do that.
    Rando
    Replied over 3 years ago
    I provide you with the contracts I use in my book, and I’m in California.
    Rando
    Replied over 3 years ago
    I provide you with the contracts I use in my book, and I’m in California.
    Melissa Guthrie from Mount Pleasant, Michigan
    Replied about 3 years ago
    Where could I get a copy of this book? Thanks!
    Aaron Dibble from Bakersfield, California
    Replied over 3 years ago
    AWSOME! Thanks RANDO! my email is [email protected]
    Aaron Dibble from Bakersfield, California
    Replied over 3 years ago
    RANDO, I hate to be a Bother, but I am still I need of the contracts. I put my LLC together and am actively seeking deals could you please email the contracts you used in your book or possibly provide me with the link to your book so I could purchase it? Thanks. ([email protected])
    Alex Montgomery
    Replied over 3 years ago
    Hello Marcus, Great Article! I have many questions as I am just getting started, and am very new to real-estate. I have been doing a lot of research from youtube videos to reading lots of blogs and checking out websites referenced in articles just to see what they look like. I have contacted a couple of listing websites to get a quote on yellow postcards and such. 1) Before buying a home as is, what does the inspection process look like? Is there one? And how involved do I get to be in that inspection? 2) How do you go about selling the house before you have to make your first payment on the house? In other words in case you can not find a buyer right away? 3) How reliable are those “sell fast” websites? any recommendations? 4) Can I find a wholesale agent at my local realty company? Those are just a few questions I have for now. Always looking for someone to talk with to further educate myself in real-estate investing reading blogs and listening to youtube videos only gets you so far. Thank you for any feed back.
    Alex Montgomery
    Replied over 3 years ago
    Hello Marcus, Great Article! I have many questions as I am just getting started, and am very new to real-estate. I have been doing a lot of research from youtube videos to reading lots of blogs and checking out websites referenced in articles just to see what they look like. I have contacted a couple of listing websites to get a quote on yellow postcards and such. 1) Before buying a home as is, what does the inspection process look like? Is there one? And how involved do I get to be in that inspection? 2) How do you go about selling the house before you have to make your first payment on the house? In other words in case you can not find a buyer right away? 3) How reliable are those “sell fast” websites? any recommendations? 4) Can I find a wholesale agent at my local realty company? Those are just a few questions I have for now. Always looking for someone to talk with to further educate myself in real-estate investing reading blogs and listening to youtube videos only gets you so far. Thank you for any feed back.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Alex great questions, 1) As a wholesaler the inspection period gives you the opportunity to market the contract you have on the property to find your end buyer. This inspection period is used to inform your seller that you will have your contractor or partners (Cash buyers) come through to view the property to see if they are interested in purchasing it. 2) Your basically getting the property under contract and then assigning that contract to your end buyer so there isn’t any payments to be made. 3) Sell fast websites are good for finding other wholesalers to jv agreement. Those sites are good to market for motivated sellers if you are on the first page of google or if your doing google adwords. I’m not following why this is important at this moment especially when getting started. 4) When wholesaling the name of the game is marketing, using a Realtor is normally not the way you want to go. You need to do some marketing directly to the sellers and cut out the middle man (Realtor) Check out this video https://www.youtube.com/watch?v=YG5AAWk78pU
    Alex Montgomery
    Replied over 3 years ago
    Thank you Marcus for the timely response and feed back! One more question if you do not mind? If you cannot find a buyer for your contract before inspection period is over can you just as easily back out of the contract and suffer no loss? Making it very little risk?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Alex, That’s correct you have to make sure you have the correct verbiage in your contract
    Becky
    Replied about 3 years ago
    What would be the correct verbage?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied about 3 years ago
    Becky, You have to have a provision in your contract where you have an inspection period. This will give you an out clause if you have in the contract where you have 10 business day inspection period then you can back out of the deal. We normally have the IP (inspection period) contingent upon partners approval. Also you want to have in your contract as the buyer: Company and/or assignee. This allows the provision for you to assign the contract to another buyer. You can get a copy of the contract we use for our out of state deals at equityrealestateblog.com let me know if it downloads we’ve been having some glitches due to the high download demand.
    Angelor Montlouis from colton, California
    Replied over 3 years ago
    Hey, Marcus thank you sir for your advice on wholesale. I needed that motivation, cause I’m a newbie. I really I didn’t know how and where to start. What you put together really helpful once again thank you.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Angelor, thanks for reading I glad I could help. “Enjoying the Journey”
    Tiffany Dumond Investor from New Braunfels, Texas
    Replied over 3 years ago
    Marcus, great reading. I am currently working on my first flip which I hope to have on the market next week. I also want to get into wholesaling because I want to get better deals for myself but also be able to diversify and get income from wholesaling on deals I can’t or don’t want to rehab. I also have gone back and forth on whether or not it makes sense for me to get my real estate license. I took the classes but have not taken the exam yet as I have read that a license can hurt you when wholesaling. My question is, if you are a wholesaler and also a licensed realtor, are you sending out drip campaigns similiar to a wholesaler or are you sending out marketing material as a realtor to get the cash deals you sell to investors? How does your marketing change or play a role since have gotten the license? Or if anyone else has insight on my question…. Thanks!
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    As a Realtor you can do the same campaigns as a non-licensed wholesaler. You only need to comply by the laws of a Realtor which you want to do regardless. For marketing you can do drip campaigns you just have to make sure at the bottom of the letter you add that you are a license agent and you need to have legal info such as your brokerage, and all picture insignia. This has never stopped me from marketing directly to sellers. Hope this helps….. Enjoying the Journey
    Ray Alvez from Redlands, California
    Replied over 3 years ago
    Thank you sir! You are very motivational and very helpful!
    Jennifer Webster Wholesaler from South Lebanon, Ohio
    Replied over 3 years ago
    Marcus – Very nice article. I’ve been trying to wholesale for about three months now. My focus has been on probate leads, but I’m finding that all of my incoming calls are from people who are just trying to find out how much money they can get from a cash offer. They are actually not motivated enough to sell for my offer price, even though they have a house they need to get rid of. I feel like I’ve wasted a lot of time visiting properties and talking to people with no results. My question is – do you recommend cutting to the chase while on the phone with these folks and letting them know your offer is only going to be in the 30 – 60% of ARV range before going out to meet them and see the property, so as not to waste both their time and yours?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Jennifer, I vet the sellers by finding out what they absolutely have to get for the property to get a gauge on what they need. After having a conversation with the seller and getting the dynamics of the situation. I inform them I will do a desktop evaluation and then present them a verbal offer over the phone. I make sure I inform them this is a ballpark and i can sure up my numbers AFTER viewing the property. If you make the ballpark figure (60-70% ARV) and the conversation is still engaging then go view the property. This means they are truly motivated because they know your ballpark offer and still entertaining the offer then this is a hot lead. I do not view all the properties only those who I’ve vetted and are entertaining the offer. If they are not interested in the offer I make sure I follow up with them next month
    Paloma Hernandez from Monroe, GA
    Replied over 3 years ago
    hi Marcus, thank you for the helpful post. Do you always tell the seller that you will be making a profit from their property? If they know that you’re making a profit, why do some investors choose to do a double closing?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Yes the sellers are aware you are going to make a profit. They understand that you are a business and in order for a business to continue you must be profitable. Double closing are normally not to disclose your profit to your end buyer. Some buyers hate to see a large assignment fee. Thanks for reading
    Paloma Hernandez from Monroe, GA
    Replied over 3 years ago
    ok thank you
    Geoff R. from Cumming, Georgia
    Replied over 3 years ago
    Great info! I’m exploring all of the avenues to RE investing and wholesaling has been a mystery until now, thank you so much for the detail. I think the big catch is really, how do you have those convos and not sound like you’re trying to scam someone but from this info, its a pretty simple situation to work with it sounds like.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Geoff, Thanks for reading, the conversations are fairly simple. You have to focus on what problem you will help them solve. Keep your view on solving the problem for the seller and you shouldn’t have an issue. “Enjoying the Journey”
    Ade Juwono from Renton, Washington
    Replied over 3 years ago
    Hi, Marcus. Is flipping law in Washington different than most other states? Double escrow or assignment contract for Washington state? What leads works better for you Divorce or Tax default? Thank you.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Ade, I’m not sure about the laws in Washington you may want to ask a wholesaler that works that market, but I know its possible but I’m not sure if you need a license in Washington to wholesale. I’ve had success with both tax and divorce both are time sensitive. I market to both list and so far I would say that divorce is a little more profitable for me. However again tax is time sensitive and if the seller receives your marketing during property tax season you may find you’ll have better results. Hope this helps. “Enjoying the Journey”
    Randy Phillips Wholesaler from Clovis, California
    Replied over 3 years ago
    My most recent deal with a realtor. I met the seller at his burned house & after a walk thru we agreed on a price of 37K He was a friendly guy about my age, I took the time to hear his story and we had a good rapport. I handed over the purchase contract for his signature and he then informs me the house actually belongs to his wife who is a realtor but works at the local hospital as a nurse. I told him I’ve done a lot of deals and they always go smooth unless a realtor is involved. He promised there wud be no problem and said he wud have the contract signed that night. I had a bad feeling and I almost grabbed my contract and ran for the hills screaming like a banshee. Soon his wife emails me the contract and it had been completely butchered and re written. Now I couldnt assign, I had to have a $3,000 earnest deposit and I cud not do an inspection & had 5 days to close & I had to use her Title company. I emailed this crazy woman back that I needed to assign the contract to my partner and I had to get my partners into the dwelling to do their inspections and 3K earnest deosit and 5 days was ridiculous & I had my own Title company. We went back and forth for almost 2 weeks and I admit I was losing my cool. Finally she sends me my original contract back and it’s signed. I think her husband must have somehow got her in line. I was still being harassed by this woman while in escrow asking why I hadnt deposited the 1K earnest deposit we had agreed on and why it was taking so long to close. It only took 3 weeks & I never did deposit the funds. I got a check for a $6,000 assignment fee, I paid out $2,000 to my bird dog. I felt like taking a shower afterwards to get the realtor funk off of me. But it really wasn’t that bad,I enjoyed going toe to toe with this bossy know it all realtor and it made for a good chapter in my book. Let’s make some Money…. Rando
    Sarah Bessler from Sunman, Indiana
    Replied over 3 years ago
    Hi Marcus, My question is about selling a wholesale deal through an agent. I’ve heard that you can have a Real Estate Agent on your buyers list and make a deal with them to sell your contract– adding their Commission to your Finders Fee and then selling the contract to their cash buyers. Do you have experience with this type of transaction or know how to go about something like this?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Sarah, That is true you can have a Realtor bring you a buyer. When you market make sure you have what ever your price is NET to the seller. So is you have the property under contract for 100k and you want to make 10k, then you market the property as 110k NET to the Seller. Let the Realtor know that you expect 110k net to the seller and they can add their commission on top. So they may send it to their buyer for 113k. “Enjoying the Journey”
    Keri
    Replied over 3 years ago
    SERIOUSLY?!?! That’s the best way to start, is to start finding properties?!? Why do some investors find it so necessary to hmm & haw around rather than just being honest. “Find me a money making deal & then we will talk!” Thank you for finally providing a direct, no bullshit answer. I can’t even begin to explain how helpful you have been! Thank you so very, very much!
    Lauren Brown from Memphis, Tennessee
    Replied over 3 years ago
    Great article, Marcus! You have put a great deal on my mind. I was considering becoming a real estate agent in my state (TN). I just started researching the issue. I will definitely take to heart your comments as well as others in this discussion. Does anyone have knowledge or experience with being a licensee and investor in TN?
    Devonte Skrebes from Minneapolis, Minnesota
    Replied over 3 years ago
    Hi, I am young entrepreneur who is trying to get his feet wet in the real estate industry. I own my own social media business and doing this to build some capital. Let me know if you want to network!
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Devonte, thanks for reading as a newbie make sure you ask tons of questions no matter how common they may seem. You can go to equityrealestateblog.com for additional information to help you get started.
    Randy Phillips
    Replied over 3 years ago
    Guess who Made 10 Frikin Grand today? I did, only because I sent a cheap ass 37 Cent post card to this seller saying I wanted to buy his house. How Insane is that? But yet I’ve done it many times. This house is a rat hole near Belmont and Cedar.. This house has been completely gutted to the studs. The seller said a half dozen people have looked at it and all took off and never called back. Congrats to Patrice, who is making 2 Grand for finding it. That only leaves 8 Grand for me, damn. Can you imagine how motivated Patrice will be to find more. I’ve offered a few of my finders a 50/50 split and they still wont get motivated. If you people only knew how easy this is. You might partner up with me.  
    Paola Villa
    Replied over 3 years ago
    So for question #4, I’m still a bit confused. Am I supposed to straight up tell them I have no money to buy their house? Also, what is the inspection period and who determines how long that period lasts? Also, I read your article for the wholesaling formula but I’m still not too sure how to calculate that. Please help, I’m so eager to get started! Reply Report comment
    Paola Villa
    Replied over 3 years ago
    So for question #4, I’m still a bit confused. Am I supposed to straight up tell them I have no money to buy their house? Also, what is the inspection period and who determines how long that period lasts? Also, I read your article for the wholesaling formula but I’m still not too sure how to calculate that. Please help, I’m so eager to get started!
    Vadim Zhenar Wholesaler from Los Angeles, California
    Replied about 3 years ago
    You are the one who should ask all the questions and set the inspection period. Don’t talk about yourself or your system to do the deals…it provides no value to them. What’s important to them is the result, the amount you agree upon in your contract. Ask the questions about their property and their situation, then shut up and listen. Try to establish that you are not the final decision maker and your business partner does the finances if they really ask (even though you might not have a business partner, it’s necessary to build trust between you and the seller)
    Paola Villa
    Replied over 3 years ago
    So for question #4, I’m still a bit confused. Am I supposed to straight up tell them I have no money to buy their house? Also, what is the inspection period and who determines how long that period lasts? Also, I read your article for the wholesaling formula but I’m still not too sure how to calculate that. Please help, I’m so eager to get started!
    Andrew Pappas Investor from Trumbull, CT
    Replied over 3 years ago
    Marcus, I’ve been told by some experienced BP Pro members that wholesaling without a license is illegal, because you are selling real estate you do not own. Can you elaborate on this and if it’s true? Thank you!
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Andrew, Great question its semantics, this is why most say you are marketing the contract you have on the property and not the property. To alleviate all the questions this is why I am a strong advocate for having a license.
    Charles
    Replied about 3 years ago
    Just wonder how I approach a broker looking to get sponsored as a person who just finish my RE coursework/state licensing but have no desire to pursue a RE agent career. The purpose of getting licensed was to help my investing career. I have approached six brokers already and have been completely transparent as I feel is always best. Offered to pay a monthly fee etc… I don’t want to be dishonest with my potential sponsor. How can I establish this arrangement? To be honest I never though this would be a issue as I never really see this issue pop up in BP Thanks in advance for the feedback.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied about 3 years ago
    Charles, being transparent is always the best practice. Most brokerages only have a few rock stars and the majority of the agents only do a few transactions a year. You are aware the average income for a full time Agent is only 10k. You can approach most brokers and inform them you are interested in working primarily in the investment arena and they should not have an issue.
    Joe Taddonio
    Replied over 2 years ago
    Marcus a few questions please #1 how does closing work? Do i have to be there #2 rough estimate on how long this takes on average from start to finish to have the cash in my hands #3 how to find a title company and what there purpose is
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 2 years ago
    Joe, PM and I’ll show you where you can get all the answers to these questions, and much more. Ill look for your message
    Jennifer Diaz
    Replied over 3 years ago
    When answering question number one you added in comments about how a contract should be written. I’ve also found contracts written up under the tools tab. Could you give a sample of a good contract or use one that’s on the site and break down the meaning so that it’s helpful in our process of explaining it to a seller?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 3 years ago
    Jennifer, Go to equityrealestateblog.com for a contract download, thanks for reading
    Thang Nguyen Real Estate Agent from Shreveport, LA
    Replied about 3 years ago
    Hey Marcus, I was wondering what do your contracts and/or assignment contract look like? Is it a purchase agreement that you can get from being a realtor in the state you live or do you have a specific contract that you use? Thank you for taking the time to write this article! T
    Jason Mills from Detroit, Michigan
    Replied about 3 years ago
    When they say get licensed are they referring to a real estate license?
    Robert Freeman Flipper from brooklyn, ny
    Replied almost 3 years ago
    How do i determine my profit from an wholesale assignment deal?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied almost 3 years ago
    Robert, so sorry I overlooked this message. Title company will send you a settlement statement and that will have how much you will make on the transaction. However before that you will be able to add that up easily. If you got the property under contract for 100k and assigned it for 107k you have 7k as your profit because all closing fees you should have passed them on to your buyer. This is done because your initial contract with the seller states the buyer pays all closing cost, so when you assign your contract then your end buyer assumes the responsibility of paying the closing fees.
    Anthony Robles Real Estate Investor from Port Saint Lucie, FL
    Replied almost 3 years ago
    Thank you . It’s as if your in my head. I am a newbie that will be taking this journey by the horns and will NOT take failure as an option. I am driving for dollars Making offers and have very little capital I am cold calling , and soon direct mailings. We have found a mentor And will continue until we have reached out goals Thank you
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied almost 3 years ago
    Anthony, thanks for reading sounds like your off and running on the right track. Remember to listen to your mentor and remain positive no matter what life throws at you. The beginning is the most difficult normally but once you get over the hump you will begin to expand. “Enjoying the Journey”
    Nick Peraino Rental Property Investor from Pensacola, FL
    Replied almost 3 years ago
    Excellent guide Marcus thank you! I have a Verbiage question. Do I tell the seller “I” want to buy their property? Or is it more of an “I can help you sell it.” I just keep running the conversation through my head. I’m a newbie and definitely fearful but it’s certainly not going to stop me. Thanks!
    Mark Lopez
    Replied over 2 years ago
    Hey there :)! You are never supposed to let the seller know you are selling the property. You’d likely spook them. Technically, you are buying the property…you are just using someone else’s money to do it. You are acting as the buyer and putting the property under contract to purchase. Then you will later sell those rights to purchase to your end buyer. So to answer the question, you just tell them that you want to buy their house or property, either way works 🙂 ! Stay blessed!
    John Smith
    Replied 6 months ago
    In Utah you couldn't do that without the risk of getting sued. The state approved purchase contract has a no assigns clause. Unless you put "and/or assigns" you wouldnt be able to assign it without the seller calling you in default, cancelling the contract, taking your earnest money and possibly suing you. Adding "and/or assigns" will tell the seller you're a wholesaler
    Randy Phillips Wholesaler from Clovis, California
    Replied over 2 years ago
    Marcus, I checked out ur you tube videos and I was very impressed. I’ve been wholesaling for a few years and I learned some things. Do you do any wealth training and self hypnosis and such?
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 2 years ago
    I am working on becoming a certified trainer for NLP this is one of my goals for this years. We have an awesome coach here and a close friend of mine been through the program already. I am in the midst of putting together some training material but nothing formal yet…Give me your honest opinion how was my delivery in the videos (not the editing working on cleaning that up with my new editor). I need some feedback on some things I can improve. Also what did you learn??? Curious to know
    Randy Phillips Wholesaler from Clovis, California
    Replied over 2 years ago
    Wow, that’s great. I am also learning self hypnosis and affirmations and goal setting and reading books on creating wealth and oh man the videos on you tube w the Binaural beats and audio books, I’m just sucking it in. Must be working cuz I just slammed 2 deals for a 35K payday. Of course taking action is the main reason I’m doing deals. Direct mail to absentee owners is working. Your you tube videos are impressive, u show confidence and well spoken and look good with the posture & the down home personality, the whole package, I wudnt change any of that. I wish I cud present myself that well, I just go with the big friendly smile and it seems to kill em.
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 2 years ago
    Congrats on knocking those deals down for big pay-days I tell people just do it and it will work. Thanks for watching the videos what market are you in?
    Randy Phillips Wholesaler from Clovis, California
    Replied over 2 years ago
    I learned to follow up on old leads from watching ur video on the meth house, I always move on when my price is rejected and never look back, big mistake. Also I shud look into the MLS. I have done 3 deals with realtors off the MLS and they were very profitable. But the competition and realtors almost always are unrealistic on the prices, the repairs always cost more than the house will be worth. I’ve told several sellers that after several price drops and the listing is expiring, I think you shud give me a call. I am over here in central California, Fresno, however some of my best deals are in these one horse farming towns within 1 hours drive.
    Daray Olaleye Real Estate Investor and Business Coach from Houston, Tx
    Replied over 2 years ago
    Great Article!
    Marcus Maloney Rental Property Investor from Queen Creek, AZ
    Replied over 2 years ago
    Thank you for reading Daray, I try and provide useful content for those that are novice and the experienced investor. I remember getting started with a $200 credit card, and leveraged that to currently 4 SFR, 1 Commercial Unit (school) and now working on a duplex. It’s the power of implementation and persistence. Also man, I love your podcast, hopefully me and my family can be a guest at some point. We’re currently running a multimillion dollar non profit for kids we built from the ground up. In the Chicago area. Let’s chat
    Cyriaque Klao
    Replied about 2 years ago
    How to know that a deal is good or bad by comparing the MAO and the asking price. For instance, what to conclude if MAO and asking price are equal, if MAO greater than asking price, or if asking price greater than MAO?
    Trabian Norville
    Replied almost 2 years ago
    First and foremost thanks for all the great advice you’ve put out on this amazing site. My name is Trabian and I was wondering how to: 1.) Get and an LLC 2.) How to choose an accurate “Title Company” that specializes in wholesaling in your local area 3.) Virtual Wholesaling as a starter
    John Smith
    Replied 6 months ago
    In my market fixer uppers sell for about 70% of ARV. I sold my parents house that hadnt been updated since the 70s for $385k as is. Fixed up it would sell for about $510k. Thats putting about $80k in....margins for flippers is very tight and yet fixer uppers here have multiple cash offers only expecting to make $25k profit after all expenses