Updated about 2 months ago on . Most recent reply
Wholesaling - Does, Don'ts - Cautions, Successes
Wholesaling is a common entry point for new investors.
First understand, the guys on You Tube that are popular, state in their YouTube videos that they spend between $25,000 and $50,000 a MONTH to get the numbers they are talking about. As a long time investor and trainer myself, I would agree with their comments. Obviously that is not what you are thinking about during the start up process.
Second, when your wholesaling, keep in mind that you are not selling houses to flippers, you are selling contracts. There is a legal difference. if you mess that up, that will get you sued.
Third, in the last couple of years, new restrictions have been added in certain states. You have to follow those laws to not get into trouble. Some restrictions are pretty easy but they are still necessary or you'll get into legal trouble. Some restrictions include, that in some states, you now have to be a licensed real estate agent to wholesale. Not everywhere, but some. Check the state you want to wholesale in for details.
Fourth it will get you into real trouble if you record a memorandum of interest against a property and not properly release it when you should.
Generally the guys on YouTube say they spend $2200 to generate a solid lead and make between $5000 and $10000 ON AVERAGE for those leads. That means they may get 3 leads in one month and be dry for the next 5 months. Now keep in mind, these are the guys that have been trained and are not starting up "cold turkey"
Have at least 6 months of reserves on hand for living expenses etc to cover the slow months.
Going into winter is not a great time for the market in most places.
Wholesaling is one of the highest taxed jobs you can have.
Does it work, yes. When properly trained.
Is it legal and "safe", yes. When properly trained.
Is it a "landmine" Yes, for people who don't follow the law.
It has low entry costs *generally* but you have to know what to spend that money on and what not to spend the money on. You need to know what works and what is a waste of time. Does "joining a community" work? For some, but you don't get good, legal advice from a community. You get "General ideas" that may get you into trouble.
I suggest you either work for one of the companies first, to see if you like the game or get personal "one on one" training.
Is it profitable, yes - is it "Easy" not really, Does it work, Yes.