For a new investor starting out: Wholesalers or Marketing?

Question

Hi BP,

I've done a couple of house-hacks off of MLS deals in the past, but like in most of the country, good deals on the Orlando MLS are drying up and I'm looking for my first off-market deal, non-owner occupied deal.

In your opinions, where would be the best place to focus on first? Should I start marketing with direct mail or should I save the time/money and try to build relationships with some good wholesalers in my area?

Thanks in advance.

Account Closed · Answer

Here in Orlando FL I am an investor/wholesaler & trainer. I also host a monthly Orlando area BP meeting. The next one is Jan 10. We meet with local investors and I teach ways to find deals and make them work for each type of investor.

I use many techniques to find my deals I buy to fix up and sell and I also market other investors properties. You have to pick the best method that works for you. I am working with several newbe investors that don't have much money and I'm teaching them how to find vacant houses, how to do the research to determine if the deal is worth going after, finding the owners, calling them with an offer, looking at the property to see it's condition, making a deal with the owner that works for both of us. That is just the beginning. Then you have to rehab the property to either rent it out or sell it. Then you have to market for either a renter or buyer.

But if you only want to do the first part of finding the property and getting it under contract then wholesale it to another investor.

Justin Silverio · Answer

I agree with Michelle B..  It's difficult to find good wholesalers and when you do find them, they are likely working with established buyers who provide clean offers and no financing contingencies as it makes for an easy transaction.  I'm not saying it's not doable but I think it may be a challenge is you need to purchase with financing or you need someone to inspect the home.

I've had a lot of success networking with RE agents.  Direct mail is my main source of deals BUT if you have limited funds, I would either hold off until you get enough funds to continuously mail marketing OR do it in-house to cut down the costs.

Eric F. · Answer

Do you have a full time job? If so, trying to market for deals AND do rehabs will probably overwhelm you. Wholesaling is a lot more work than people think.

I enjoy the process of getting the deals. Meeting with sellers and making offers is actually my favorite part of this whole business. I could see how for most people it is not their favorite activity. I actually used to hate it and was terrible at it but I learned to love it.

If I just wanted to be a rehabber and not deal with marketing, taking calls, meeting sellers, etc. I would certainly just buy from wholesalers. They are two different skillsets. I am much better at getting deals than rehabbing I have found. I think in 2017 I am only going to rehab properties I intend on keeping and wholesale all my other deals.

Have you marketed directly to sellers in the past? It sounds like you have not. If so you have to learn all these skills

• Source Leads
• Create marketing materials and get them mailed (advice: skip the part where you try to print them at home and outsource from day one)
• Field calls (gather motivation, assess deal, build rapport, set an appointment)
• Go to the seller appointment. (repeat above + present offer)
• Sign the deal

That is a lot to learn. If you are not comfortable talking to strangers on the phone and in person it could take years. I'm not ashamed to admit it took me at least 18 months to even answer the phone without getting nervous. Do you want to learn all that? Does it sound fun?

I'm not trying to discourage you. If that sounds fun I encourage you to give it a shot. Honestly, send a couple thousand mailers just to see how you do with talking to sellers. Maybe you hate it, maybe you are a natural.

Pratik P. · Answer

I've noticed that investors who are managing multiple flip projects at the same time are getting their deals from wholesalers. They rather spend their time and effort to ensure their flips are going as planned rather than worry about marketing and finding deals.

For a new investor starting out: Wholesalers or Marketing?

Most Popular Reply