New at Wholesaling and NOTHING is working....

43 Replies

I'm totally new to Wholesaling and I have heard it was a challenge, but I just spent over $400 at yellow letters.com and listsource.com for direct mail marketing, I'm putting up bandit signs, I'm driving for dollars, and nothing seems to be working. I went to a Real Estate Meetup and the speaker said "Are You having trouble getting your phone to ring" - I just didn't think I would have to spend hundreds of dollars and have no results. 

I literally have tons of buyers...asking me for houses....but no leads. 

Does anyone have any tips on how to get more leads as a Wholesaler? 

@April S. I would agree with Jay on this.  You have to spend way more money to get results which is why I don't wholesale at this time.  I don't have the money to spend on marketing.  Your particular area also may not have very good leads compared to another state, county or market altogether.  For instance I'm not investing in my home state of Georgia because I have found far better deals in Indiana and Ohio.  The wholesalers I've worked with tend to go into the ghetto or low income neighborhoods that are older and have more success there because there are more desperate sellers there.  If you're targeting areas where most of the residents are on solid financial footing, have good jobs, and don't need or want to sell then you'll want to switch to a different C or B class area of the country.


Also, while I know having a real estate license can have negative consequences for investors (that's a whole other argument), getting your license could help in some cases because the individual selling knows you are reputable and know what you're doing.  Sometimes the unlicensed wholesalers can come off as cheap, unreliable or just downright shady.  If you don't have our license, consider getting it.

404-405-2792

The gurus promise EVERYTHING..including taking your money for their courses:)

John Thedford, Real Estate Agent in FL (#BK3098153)
239-200-5600

You're definitely going to need to up your budget. Most guys spend anywhere from 2500-5k+ per deal they're getting. This is akin to saying you couldn't find a good reliable car and were prepared to spend $400. 

If you're short on cash you can door knock, call FSBO, and dig through the depths of craigslist.

Ryan Dossey, Real Estate Agent in IN (#RB15001099)

@Dave Felts   I don't subscribe to the license hurts you camp.. .I have been for 42 years now and have bought literally thousands of distressed assets.. not a nary of a worry.

what the liscense allows for those starting out. is to have two ways to help.. if the person does not want to take a quick discounted cash sale.. instead of blowing all your dough to get no where you stand a good chance of listing it and at least making a listing commission.

and if they are hoody type properties or low value assets you simply charge a higher fee to list.. I did this with great success starting my career I only sold land.. and my fee was 10 to 25%  ..

the folks that say license is a hinderance are usually worried about unconcenable  profit claims but you can get those being unlicensed as well if someone brings that claim license or no licesne they can still sue you if you tell them their 200k house is only worth 100k..

Unfortunately wholesaling isn't easy and most of the time to get results you have to spend a lot of money over a period of months.  It seems to be a common misconception that wholesaling is a good way to get started with low money, but what a lot of people fail to realize is that you will have to spend a significant amount of money and there is no guarantee of return.

If everyone could spend $400 on marketing and get leads for distressed and cheap houses, there wouldn't be a need for a wholesaler, as all the flippers and landlords would simply pay $400 and get houses. I read that it takes 6 mailings to the same property to get any kind of response. Also if one of your avenues is door knocking or cold calling, check local laws.

If you can only send $200-$400 worth each time it will just potentially take you longer to get your first deal.
It is also important that you have knowledge of what deals are worth and in what areas to mail and concentrate on.

PM me and I can help you identify some of these characteristics. Then when you send mailings they will be to the right areas to help you have a better chance of success. In a nutshell you want to find good rental areas then send. mail to out of state owners of those houses. The distance gives you a better chance of getting motivated sellers from your mailing.

It will also allow you to send smaller mailings for better results. example of good rental area criteria could be year built between 1950 and 1970, single story(landlords like low maintenance) and an ARV less than 200K (to single out the most inexpensive and therefore more likely to turn a profit. I would start with SFH but send duplex lists when you get going.
The year built number helps you to target houses that are not too old but that are likely to be high percentage rental areas. These are just a few tips and hopefully your next mailing will be more on target.

I would have to agree with the other previous posters. Sure their are people who land a deals within a month, but I think it's a volume game. They say every campaign should last 6 months, so I would consider raising your marketing budget to at least 2-3k a month for 6 months. 

Hi Everyone thanks for the comments. I definitely didn't assume all I needed was to spend was $400 to get quality leads. I was not aware of the average marketing budget with wholesalers. 

@Andy Rumple I will message you, my first direct marketing list targeted Absentee Owners in three different counties,  but you're right finding the right areas can make a big difference. 

Originally posted by @Andy Rumple :

If you can only send $200-$400 worth each time it will just potentially take you longer to get your first deal.
It is also important that you have knowledge of what deals are worth and in what areas to mail and concentrate on.

PM me and I can help you identify some of these characteristics. Then when you send mailings they will be to the right areas to help you have a better chance of success. In a nutshell you want to find good rental areas then send. mail to out of state owners of those houses. The distance gives you a better chance of getting motivated sellers from your mailing.

It will also allow you to send smaller mailings for better results. example of good rental area criteria could be year built between 1950 and 1970, single story(landlords like low maintenance) and an ARV less than 200K (to single out the most inexpensive and therefore more likely to turn a profit. I would start with SFH but send duplex lists when you get going.
The year built number helps you to target houses that are not too old but that are likely to be high percentage rental areas. These are just a few tips and hopefully your next mailing will be more on target.

 Very Generally speaking your targeting failed and burnt out land lords.. then you sell to guys like Oceanpointe or Morris and the cycle repeats..

April,

I've been wholesaling for a long time. Everyone thinks doing it is easy. It's one of the most difficult jobs you'll ever have! However, if you stick to it, the rewards are definitely there. It's very frustrating and expensive sending out mailers, putting up signs etc. It's a lot of work. But let's be positive for a second. What you need to know, is that all it takes is one good hit. That's it. But that one good hit might take 100 phone calls from the signs and/or sending out 1000 mailers.  Don't give up. Andy is right. You need to figure out your target area and what kind of homeowners you're targeting. Then focus on that group. This business is about repetition. But targeting your audience will definitely improve your chances of hitting. I'm currently mentoring a newbie. One thing I told him when we first hooked up was: " If you don't have buyers, you don't have a business." You said you have plenty of buyers. That's an excellent start. You're already way ahead of other newbies.  Just don't give up! The market is tight and great deals are tough to find right now. But they're out there. You just have to dig deep. Best of luck to you. If I can help you, feel free to PM me. 

@Scott Steffek You are so right, all it takes is one good hit. I'm definitely not giving up! Wholesaling is not for everybody but I'm going to stick to it and work really hard. Thanks for giving me some insight as a Wholesaler. 

@April S. You are playing defense using this approach. What you need to do is get on the phone. Everyone is sending out mail. Why? I have no clue why people think that this is the way to go. I have never sent out mail and we close a ton of deals in the mid-west month after month. And you want to know the best part? I live 750 miles away from the market LOL!!!! They key is to get on the phone. develop what you are going to say to a seller. Build rapport, See how you can help them in their situation, tell them what you do and go from there. It's really not that complicated. You have to zig when everyone zags. Find a target demographic i.e. tax delinquent, code violations, recent evictions etc....Go on the public records site i.e. assessors website(Taxes), Building department (Code violations), Court records site( Evictions). If the public record in your market does not offer the sellers phone number use TLO, Been Verified, Skip Genie etc... and skip trace the sellers info. AND CALL. You can also hire a VA down the line once you get the hang of things. My VA works for $6.45 an hour 9-13 hours per week. If you want to jump on a live call with me and one of my new sellers we can put it on the calendar just give me a heads up with your availability. I wish you much success in the future. Always remember to persist and you will WIN!!!!

I’m going to have to disagree with everyone here a little. As a first time investor my first deal was done off my first round of direct mail campaigns. I mailed off about 1500 pieces to non owner occupants and got back about 50 calls so about a 3% response rate. Not the worst but not bad for my first time not knowing what I was doing. Of those 50 about 45 were just tire kickers and of the remaining 5 I made offers and got one accepted. So 1500 mailers got me 1 deal. Since I printed and mailed the letters myself I only shelled out about 750 dollars total for the mailing list from list source, the postage, and the paper and envelopes (obviously not counting the time involved in printing, folding, and mailing each envelope which took about 3 weeks) so yeah it is possible and doesn’t take 5k a month in spending but it does take a little hustle. Obviously my perspective is more from a buy and hold point.

Buying a list of absentee landlords from list source is not filled with motivated sellers. Sure they could be older with a lot of equity and live out of town or out of state . Many landlords have well managed properties that cash flow. No motivation

Now a owner that has a city boarding lien is a different story. Property. Is vacant and was not secure. That is a seller with an issue Add to the fact that the owner died w out a will and kids can’t pay the taxes nor figure out how to sell the house. Now you have some motivation. They have a real estate problem.

400 of these type sellers and your odds go up But wait everyone chases city liens or estates or tax delinquents. Isn’t that the secret sauce the gurus teach. Yes they do but most are one and done. Get a good list and stick with it. Consistency is the key.

I’ve just sent out 4200 cards this month. I have had some success in the recent past. This month not so much. I spent 1600 this month and will spend 1600 next month. I’m gonna stay with it because it works.

I’m curious how did your buyers list.

210-573-3560

Just keep mailing and you land a deal 100%. It usually takes at least 4 mailings

@April S.

Like the others have said, it takes a much larger volume, (i.e. budget) to get a hit. It also takes time and good personalized outreach. Personally, I'm not a fan of yellow letters as they are what a lot of investors use and thus don't stand out and end up in the bin. If you're serious about direct mail marketing I would hand write some letters from your driving list and make them more personal. If you can get 1 good deal that way, then you can use that cash to re-invest into a broader more extensive direct mail campaign. 

The other thing I would do is make sure you tell everyone you know or encounter that you're looking to buy, (family, friends, hair salon, nail salon, literally anyone you can engage in small talk). You would be surprised where a good deal can come from. Everyone you talk to has a chance of knowing a friend or family member who wants to sell their house. 

Lastly, I would target higher than $5k on a wholesale. I would make sure you're at least targeting 5% of the purchase price. Just make sure there's enough room on the deal for whoever is ultimately going to buy it. You should be able to leave 10-15k of room if you're buying houses in the 100-250k range. 

You have to learn how to spot a deal. Learn your market and learn how to market. There are deals all around you but you have to know your market well enough to know. There are tons of people that wholesale off of the MLS, off of Craigslist, bandit signs, postcards etc.

@April S. Congrats on your foray into the fascinating world of REInvesting! 

Since there is no value in beating the spend-more-money-on-marketing dead horse, I think we should take a different look April and let's think this through.

Why do some people quickly jump on the wholesaling bandwagon? I think some people see wholesaling as a natural start to their REI journey, perhaps, their first seminar on real estate was a charismatic speaker giving a seminar, sorry meant sales pitch, on how he/she has made thousands by simply assigning contracts and making a quick 20k 🤑🤑🤑

Naturally, as humans, we almost instantly think "I can do that", so our knowledge illusion goes into overdrive, tricking our brain into action so, I guess, we forget to even spend the time to research other aspects of real estate and/or even stop to think, wait, "am I willing to do this real estate thing for the rest of life?" or is this just a side hustle I believe I can make a quick buck from while I keep my day job? When we don't start to take note, we end jumping in with very high expectations and we get disappointed rather quickly. 

To conclude, I think you should stop to take reflect and ask why am I doing this again? [Life Audit🤔

As Brandon says, there are many ways to skin a cat.

Your answers (no right or wrong) to this questions should help you determine your next course of actions. 

Hope this helps, April. Goodluck. Thanks! - Ola   

Originally posted by @Ryan Dossey :

You're definitely going to need to up your budget. Most guys spend anywhere from 2500-5k+ per deal they're getting. This is akin to saying you couldn't find a good reliable car and were prepared to spend $400. 

If you're short on cash you can door knock, call FSBO, and dig through the depths of craigslist.

Ryan maybe you can comment on why you have a licesne and why you think it does not hurt you !!! 

Originally posted by @April S. :

I'm totally new to Wholesaling and I have heard it was a challenge, but I just spent over $400 at yellow letters.com and listsource.com for direct mail marketing, I'm putting up bandit signs, I'm driving for dollars, and nothing seems to be working. I went to a Real Estate Meetup and the speaker said "Are You having trouble getting your phone to ring" - I just didn't think I would have to spend hundreds of dollars and have no results. 

I literally have tons of buyers...asking me for houses....but no leads. 

Does anyone have any tips on how to get more leads as a Wholesaler? 

 Legal issues aside being a wholesaler is a poor business plan. What you want to do is become a Realtor. Many more ways to earn a check connecting buyers with motivated sellers that way.

On top of that you'll want to drastically increase the marketing budget. Many people starting out do what you have done. They spend a nominal amount of money & expect immediate gratification. That is not how marketing works. Marketing is a slow grind of exposure & multiple touches. You shouldn't even aim to make a sale on that 1st touch. It's the repeated touches & long term exposure that brings in the business. Set up a marketing budget for at least 1 year & stick to the process.

James Wise, Real Estate Agent in OH (#2015001161)
216-661-6633

April, sorry for sounding a little harsh, but this is coming from a caring spot. Now if becoming successful was just those very very few things you did, then everyone would be successful. 

Understand that the principle holds that 10,000 hours of "deliberate practice" are needed to become world-class in any field. Read Malcolm Gladwell "Outliners." 

So you have a buyers list, but no leads. Do me a favor: STOP sending money and start putting in the hours.

Action: Find all the properties that sold this year in your target market and that were bought in ALL CASH deals. Why All Cash? Cause they are usually Real Estate Investors and wealthier people who can afford to help you. Now, do 100 calls a day for 6 months straight and ask the following question:

"What can I do to help you, so that one day you will think of helping me sell one of your deals?"

It's that simple, put in the hours. Money is only for awareness campaigns, you need everyone to know what you want.

Btw, this will cost you NOTHING and provide you will all the results you need, it's just 99% of people would rather complain and do nothing about it.

*Tip: If you are still questioning the 100 calls a day for 6 months straight, then you already failed at being successful in your craft.

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