What are the things you need to know about wholesaling?
Check out the education section on Bigger Pockets. They have a whole section on Wholesaling. Plus check out the articles on Wholesaling. I am new to it as well and I currently have like 11 open web pages of articles I'm waiting to read in my downtime.
Thanks for the information. I'll check it out!
Can we keep in touch?
There's way too much to know on wholesaling to give you a quick post that'll have you on the road to succeed in a day.
Regardless of what anyone says, wholesaling is the hardest way to start in this business. Yes it's the cheapest but it's not easy. I stayed a month ago and it's like a second job. The funny thing is I am getting into real estate investing so I can get away from working but that days not here yet.
Back to it being hard....I have been at it a month doing about 10-15 hours a week on, plus working a 50 hour a week job and raising a baby. On top of that I haven't closed a deal yet. I only got 3 leads so far too.
To your question, the easy answer is, you have to learn how to
1. find distressed/motivated sellers
2. Approach them, convince them to sell you their house for cheap
3. Get it under contract
4. Sell it to a buyer at a mark up so you can make your fee.
But you have to know a ton of other things in between all of that like
-what areas are investors buying in
-where to find leads and how to get in touch with them
-how to find buyers
-how to recognize a deal
-how to understand the numbers do you can actually come up with a selling price that makes sense
And on and on and on.
Start reading and start asking questions. It'll fall into place enough for you to start but you'll never be a whiz. Everyone is always learning.
Benjamin has some great points. The one comment that stuck out for me was: "Regardless of what anyone says, wholesaling is the hardest way to start in this business." He's absolutely right. I've been in this business a long time. All of these books and gurus tell you how you're going to make millions wholesaling. Yeah.....right. Wholesaling is extremely difficult, time consuming and frustrating. I'm in no way attempting to be negative. I'm just being realistic! I see so many people come and go that started as wholesalers. It's very difficult. However, it can be learned and you can make money. Just don't expect to quit your job within the next couple of years. There's so many things to learn. Just expect to put in long hours. Even though you're new, start finding buyers immediately. To me, it doesn't matter what anyone else says, but without "true" buyers you have no business. Not a "drop" of business. Once you've learned the business and/or you've found good properties, you can always hook up with reputable wholesalers in your area, to sell the property. Negotiate some type of split on the commission. That's a good way to put some money in your pocket, while you're learning. Just be very careful who you trust and whatever deal you have going, make absolutely certain the terms of your fee, are in writing and signed. Don't take his/her word for it, that you'll get paid! If they have an issue with putting it in writing, there's a major problem at hand. I could go on an on, but don't want to take up the whole forum! I wish you the best of luck and I hope things go well for you.
If you really want to succeed at wholesaling and make money at it, hire a mentor that will come on-site to your town and work personally with you to attack and dominant the market.
What you learn on the "free" stuff here is what everyone else is doing. Do you want to be one of the pack or lead the pack?
I agree with your comment about wholesaling being "extremely difficult, time consuming and frustrating" but if it fits your personality type (meaning someone that is a self-motivator and enjoys wearing many hats) it is a lot of fun. I have days I feel like a private-eye, hunting down home-owners and there's days I feel like I'm a underdog fighter up against an undefeated world-champ without a prayer in the world.
If you want to make the BEST money, find a way to buy and hold. The returns will be substantially higher than working as an unlicensed broker. Consider a few things before you decide to start in either arena:
1. If you write a contract, can you CLOSE on them? If not, that is wrong. Don't go into it being deceptive and dishonest. There are thousands of those people on BP.
2. Do you know enough about your market and values to be able to spot a deal? Whether you want to buy and hold or assign, buying right is TOP priority.
3. You will find thousands of people that never made a dime operating as unlicensed brokers. That is a TOUGH way to make a living. One BP poster stated it took them SIX months to do their first deal and they made a whopping 6K. LOTS of work and time...for little money
4. Do you have other options to get into RE? Get licensed? Work for a PM company? Become a private money lender? There ARE options.
If you have access to money, learn your market, make offers, and start building a portfolio. It isn't fast BUT over time you will have true financial freedom. The fact is, most agents or unlicensed brokers never become investors and will always have to complete the next deal to have income. Now, compare that to having a dozen rentals with 170K a year in rents coming in. Which one would you choose? Once you hit that goal, you aren't truly "rich" but you NEVER have to work again if that is your goal. Can that REALLY be done? Absolutely. Lots of investors make LOTS more than that! It all depends on what you want to accomplish, how much you are willing to invest (time, money, effort, education, etc), and what your goals are.
With these ideas, the ideas from other posters, start with a goal, develop a plan how to reach that goal, and give it 100%.
Take a look at John Thedford's post above this one. He's absolutely correct. if you don't begin to buy & hold for yourself, you will ALWAYS be fighting for the next deal, to make a few grand. I work with investors that I have personal relationships with. I don't consider myself a wholesaler, even though I probably am. I don't throw things out on the internet and hope to the good Lord, that someones buys it! I tailor my business to buyers I know and talk to. It works well and we all enjoy the personal side of it. Don't get too frustrated. You will definitely have some bad days....maybe even a week or two in a row of bad "days". Just keep plugging away. It will happen if you stick to it. One piece of advice. Find buyers buyers buyers. You might have 20 incredible deals, but if you don't have a buyers pool, or know someone who does, you have no business. Someone told me this long ago and I believe it: "You have to be uncomfortable to become comfortable". Think about that. Best of luck to you!
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