wholesaling and flipping houses

4 Replies

Help!

Starting out as a wholesaler! What first?

I have a business phone setup already. What is my first move at this point? Look for a mentor? Start marketing by direct mailings.to a designated area in my DFW, Tx location? Get to a REIA meeting? I have read and educated myself on real estate investing for over.6.months. Time for.action!

Stuck in Texas,

Kent Arrendell  

You are in the lead generation business, you leads are buyers and sellers.  Your number one task every minute of every day is to generate leads.  There is no silver bullet to generate leads.  You need to try many different avenues to generate leads.   The key is to take massive action to generate leads.  Placing one or two of anything is not going to work.  There are lots of lead generation techniques that are free on the internet.  You need to blow up your lead generation business and take no prisoners.

@Kent Arrendell ...while I hate Analysis Paralysis, I might suggest that you haven't necessarily spent the time to educate yourself on the right things.  If you have spent 6-months educating yourself, you shouldn't be asking what your first step should be.

I'm really not trying to be harsh or discourage you.  However, wholesaling is a really tough avenue to start out with, and you have the potential to make a mess of things for yourself and the sellers you encounter, if you don't enter into with the right knowledge.

You need a business plan.  It doesn't have to be elaborate, but you need to undertake the discipline of actually writing down...

  • Your goals
  • What strategies (wholeselling) you will employ to meet those goals
  • How you will execute those strategies (i.e. Create a website for lead capture, mail 1000 letters per month, etc.)
  • How you will measure your progress
  • How will you contract on houses you find (i.e. Simultaneous Closing, assignment of contract)
  • What your criteria will be for analyzing deals and what your threshold is for something being a "deal"
  • How will you market your deals
  • To whom will you market your deals
  • How will you structure your wholesale deals to investors (This will be really important as you find deals and develop a "core" group of investors who will purchase the majority of the properties you find.)
  • What types of properties will you target
  • What areas (you need to pick no more than 3 manageable ares to start, where you can become an absolute expert in those sub-markets) will you target for your marketing campaigns
  • How will you facilitate your marketing (internet, direct mail, door hangers, bandit signs, all/mix of the above)

If you had done this, you would know exactly what your next step should be.  Getting a phone number is the slam dunk part.  It takes 3 min on Google Voice.  What would happen if that phone number rang?  Would you know what to do?  Do you have contracts to use?  Do you have any clue how to vet a seller?  Do you have clue 1 about how to estimate potential rehab costs, if you had a chance to view a property?  You better have a clue, and you better be pretty darn good, because if you offer me a property and tell me it needs approx $20k of rehab, then I tour it, and it needs closer to $35k, there's a good chance that will be the last of your properties I bother with.

Again, I'm not trying to be harsh.  That's why I took time to write down the types of things you need to have ironed out, before you start.  There are tools for estimation in the File Place, and Contracts can be found there as well.  There are tons of information to fill in the blanks on the podcasts and in the blogs.  This shouldn't take that long, but you have to lay the right foundation, before you start building the house, or it's going to crack.

I would be happy to talk to you about any or all of the things I mentioned above (and I'm sure I forgot plenty).  Feel free to give me a call or email me using my contact information below.

Hattie

Originally posted by @Hattie Dizmond :

@Kent Arrendell ...while I hate Analysis Paralysis, I might suggest that you haven't necessarily spent the time to educate yourself on the right things.  If you have spent 6-months educating yourself, you shouldn't be asking what your first step should be.

I'm really not trying to be harsh or discourage you.  However, wholesaling is a really tough avenue to start out with, and you have the potential to make a mess of things for yourself and the sellers you encounter, if you don't enter into with the right knowledge.

You need a business plan.  It doesn't have to be elaborate, but you need to undertake the discipline of actually writing down...

  • Your goals
  • What strategies (wholeselling) you will employ to meet those goals
  • How you will execute those strategies (i.e. Create a website for lead capture, mail 1000 letters per month, etc.)
  • How you will measure your progress
  • How will you contract on houses you find (i.e. Simultaneous Closing, assignment of contract)
  • What your criteria will be for analyzing deals and what your threshold is for something being a "deal"
  • How will you market your deals
  • To whom will you market your deals
  • How will you structure your wholesale deals to investors (This will be really important as you find deals and develop a "core" group of investors who will purchase the majority of the properties you find.)
  • What types of properties will you target
  • What areas (you need to pick no more than 3 manageable ares to start, where you can become an absolute expert in those sub-markets) will you target for your marketing campaigns
  • How will you facilitate your marketing (internet, direct mail, door hangers, bandit signs, all/mix of the above)

If you had done this, you would know exactly what your next step should be.  Getting a phone number is the slam dunk part.  It takes 3 min on Google Voice.  What would happen if that phone number rang?  Would you know what to do?  Do you have contracts to use?  Do you have any clue how to vet a seller?  Do you have clue 1 about how to estimate potential rehab costs, if you had a chance to view a property?  You better have a clue, and you better be pretty darn good, because if you offer me a property and tell me it needs approx $20k of rehab, then I tour it, and it needs closer to $35k, there's a good chance that will be the last of your properties I bother with.

Again, I'm not trying to be harsh.  That's why I took time to write down the types of things you need to have ironed out, before you start.  There are tools for estimation in the File Place, and Contracts can be found there as well.  There are tons of information to fill in the blanks on the podcasts and in the blogs.  This shouldn't take that long, but you have to lay the right foundation, before you start building the house, or it's going to crack.

I would be happy to talk to you about any or all of the things I mentioned above (and I'm sure I forgot plenty).  Feel free to give me a call or email me using my contact information below.

Hattie

 Solid gold advice right there! I would also advise you to develop at least two or three more exit strategies (joint venture, rent to own, listing the house as an agent). 

The most important advice I could give however is

1. Start before you are ready. 

2. Make the decision that you will stick with it no matter what happens. Do not let your emotions dictate whether you stick with it or not. 

Thank you for the great advice Hatte.  Is it ok if I contact you about the business plan I created?

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