Question to veteran wholesalers

13 Replies

hello, my name is Ryan and I am a new investor and I am in the wholesale business.  Currently I am in the beginning stages of the process and have a few questions. First, how many houses can I expect or plan on buying and selling in a year starting out, and then also how many can I expect to buy and sell later down the road.  I know that you can't predict due to the many factors in place, however a rough estimate would be appreciated so I can have a foundation for my goals.  Thank you

Ryan

It all comes down to how you're going to acquire the properties and do you have a system if any in place... Wholesaling is one of the hardest entry points into RE. You can EXPECT to do 20 but realistically only do 1 or none. You see what works in my market or NY doesn't mean it will work for you in PA. You need a strategy and a system in place to do multiple homes annually. 

Here's you're answer in short. Pick the type of wholesale deals that perk your interest and start working it hard. Shoot for 20 deals and maybe you'll get there or maybe you get to 18 I'm sure you'd be happy with those results... You need to take action now you're already 6 months into 2015.

The frustration deepens Ryan, listening to gurus or to those who believe they have learned from gurus and systems and programs will more than likely cause failure and can also get you into trouble in real estate. Real estate is NOT like some production line frying hamburgers and tossing them to customers through a window. 

In wholesaling you need to know the seller's and buyer's needs, you need to know how to value real estate, what repair costs might be, what your market is in flipping and as to leasing, understand closing costs, title issues, the flow of different transactions, contracting, and certainly what is deemed illegal in your state! 

I need to get some techie type to build in a function key into my computer so I don't need to retype the same thing over and over......

Learn real estate before trying to deal in real estate. Good luck :) 

Bill, thank you for the response and you gave me a lot to look into. Like I said, I am just getting started and haven't even worked a deal yet. I know that I have a lot of homework still to do before I can even think about working my first deal. I hope I didn't frustrate you too much with my "newbie" post hahah. 

I still consider myself a newbie, I've been wholesaling since January 2015. I had quick success and closed 5 deals but am now dealing with the frustration of almost no good leads. I found a local mentor and there is no possible way I would have done as well as I did with out him. To answer your question, reading BP you will see everyone states the amount of deals is directly related to the money you spend on marketing. IMO it also depends on HOW you spend your money but for example you spend $1000 to get one deal and $20k to get 20 deals this is an average of course. You could spend 10k and not see any deals for 6 months then get all of your deals at once, which is sorta what happened to me. I spent $1500 and landed 5 in 90 days but now my dollars spent is averaging out since I haven't had more deals. That is why SO many people say you have to pick a budget, be consistent on marketing and stick to it for 6-12 months. You will always need to spend money on marketing to continue to get deals, so it's a balance. As far as the frustrations Bill talks about, yes I agree. There are a lot of moving parts and points for frustration that I wasn't prepared for. If I had not had a good mentor I would have given up. I tried to back out of a deal and it was my first and easiest deal to close with a $4,500 fee. Not everyone needs a mentor so you need to decide if you can stay motivated on your own and pick your budget and marketing effort. Good luck and don't get analysis paralysis.

Listen to podcast 37, it may help to understand what Nathan is saying. To me, theoretically, wholesaling makes the most sense when you're looking for deals to flip or hold yourself and your deal flow becomes so good that you can pass off, or "wholesale" some of them to other investors. I stole that POV btw but it makes the most sense to me.

There's a lot of gray area involved, and the line between wholesaling and brokering can get blurred. If you only want to find people who want to sell their houses in your market then you might consider just getting your license and selling houses retail. 

The issue to me is the intent, i.e., I position myself, as a wholesaler, as someone who is looking to buy houses when I have no intention of closing on them myself. The justification is that I'm providing a service to the market place and everyone is getting what they want. The real problem for the wholesaler is that the seller doesn't know what wholesaling is so that can be tricky how you handle that. The issue isn't honesty, the issue is relevancy, I'm trying to get the seller what they want, what do they care for a dissertation on wholesaling. 

The problem I have with people who get too high and mighty against wholesalers is this: Yeah, when a wholesaler gets an agreement signed he or she needs to go find a buyer (this seems to bugger the heck out of some people). However, when most investors or even homebuyers sign an agreement they themselves have to go find financing. Now they might have great financing in place and feel very confident they will be able to close, but a wholesaler may have a great buyer and feel every bit as confident. Yes, there are some differences but anyways that's how I see it, a wholesaler may be taking all his skin out of the game at closing but he's also passing off most of the profit potential.

This post is way to long, so to wrap it up I'll say that while I have zero interest in judging what other people are doing, the issue of intent is something that I'm taking very seriously in my practices and actually caused me to quit all real estate activities while I took some time to reposition myself in this industry.

@Ryan Hardaway

We are here to network, learn, and to be of help in some way, so your posts are appreciated.

Ryan, do all that you can do that is free when it comes to investing.

1) Read about re wholesaling online, at your local bookstore in the re section, on YouTube podcasts, and any other place that you can think of. ( You will get some knowledge, along with different perspectives to "stir your ideas.")

2) Decide why you want to invest in real estate. (These answers will come in handy when things get tough for you, and you think about giving up.)

3) Leads are all around you-get creative! Look for For Sale By Owner signs in your local area, then call the numbers on the signs to get basic condition of the property, owners name, and why they are considering selling the home. "Ask them if they were in your shoes and looking to buy their property, what are some of the things that they feel need updating-or what would they want to update?" Be sure to get their asking price, even though you are going to be looking at the condition of the property along with the owners circumstances. Search fsbo and your city, state to get a list of leads. Practice calling and getting information, until you are comfortable- you do not need to put an offer in on these properties, unless you want to. This exercise is to get you familiar with obtaining information. ( Note: Being uncomfortable is normal with any endeavor - so stay with it.)

4) Find a local attorney who specializes in real estate transactions. Call and ask to speak with the attorney-this saves on time. Tell attorney you were looking for an attorney who specializes in re transactions and their name came up on your search list. Tell attorney you will need their expertise on Closings as well as their real estate knowledge of contracts. (Write down any questions, statements before your call to create smooth conversation).

5) Note: As a wholesaler, learn to fill out your state's re contracts. See if they are available online or at your local office store. ALWAYS PUT "and/or assigns" after your name at the top of the contract. (Your local re attorney can tell you about laws in your state governing this.) You will be utilizing a Purchase Agreement contract, Sale and Purchase Agreement, or Offer To Purchase Agreement.

This is enough information to get you stepping forward. Keep learning. We will never know all there is to know. Get re professionals on your investing team- look for an investor- friendly Realtor in your area. Let them know what your game plan is-and what your needs are.

The amount of deals that you can expect are up to you. The amount of deals that you close on is up to you, because they will be based on your workload, your investing team, and your seller and buyer leads-all developed by YOU.

This is your information nugget for today.

May Your Efforts Be Rewarded,

Anthony Davis

thank you everyone who has commented. It is all very good advice that I will definitely be utilizing and learning more about. Thank you all for taking the time to respond. 

I would go to a REIA or real estate investors assoc in PA

Ask these  questions of wholesalers in your area

You want to get experience with an experienced wholesaler and bird-dog,  or look for properties for the experience wholesaler

Getting your real estate license in Pennsylvania might help

Creating an option to purchase on the property, recording that option, and then getting an option release fee probably will be better than assigning the purchase agreement for a fee

@Josh Caldwell is in Pittsburgh

@Ryan Hardaway

Hi Ryan, I would agree with @Brian Gibbons as to attend your REIA (Real Estate Investors Meetings), and network with other real estate investors in your area. Also, find some members from bigger pockets in your local area to network with. I would personally find a successful wholesaler and ask him to be your mentor for the first year. You might have to give up some of your profit from your deals (Usually 50/50) in that first year (but you need to be thinking about years 2-whenever you want to stop. I think this will help minimize your mistakes in the beginning and will give you confidence.

As far as #'s go, I agree with @Michelle Zarlengo as it depends on how much you spend on marketing, & it depends on how hard you work at it and how determined that you are to make it work. It is a #'s game. The more people you talk to, the more offers you put in, and the more you put yourself out there, the more successful that you will be.  I think it's possible in your first year to be doing 1-2 Deals per month (12-24 for the year).   After that, if you build a good team and system, I think that you can do 10+ deals per month. Right now we are getting about 1 deal per $1000 we spend on marketing (Direct mail campaigns). So, I know that if we want to get 5 deals per month, I need to spend $5000. If I want to get 10 Deals per month, I need to spend 10,000 on marketing. You just need to make sure that you, or you have a team that can handle the calls, the offers, and work involved to weed out the junk, to find the treasure.  I wish you luck, & have a blessed day.

Brett

Ryan

The answer to your question largely depends upon your actions.  If you putter around and occasionally call a seller then you will do one deal occasionally.  If you really ramp up the marketing, build a team to field leads and market your deals then you can get as high as 20-30 per month but that is really rocking and rolling.  Starting off you wont have the skill set to do that many deals.  In fact it will likely take you years of hard work to build to that level. 

How about this, instead of thinking in terms of how many, how about you look at all of the steps involved and start assembling a machine to work the wholesale deals.

It all starts with marketing, what is you plan to market?

Then once you have some cash, you can look at call centers, virtual assistants, and acquisitionists and even personal assistants to move your business forward for you.

The end goal is to you out of the way. the more people you have doing your work the more work will get done. You only have 40-60 hours that you can work, however, you and 2 VA's and an acquisitionst can do lot more than that in total

I hope that helps

Josh

my journey is funny i read alot and did a free seminar  (no names than Merrill ) so feeling motivated i paid for a 3 day boot camp but being a quick read i had 3 deals by the time i got to the boot camp i was proud  and i showed up at the boot camp with my new friends from the free seminar but i did have an assignment cluase in my contract but this was my result for showing what happened i was almost thrown out of the boot camp i also didn't close the deals and i didnt know i agree to a price that was only 15000 dollars over my best offer so i learned due your research on the area  comps and stay away from gurus and marketing marketing marketing its mandatory to generate leads

Originally posted by @Melvin Owens:

my journey is funny i read alot and did a free seminar  (no names than Merrill ) so feeling motivated i paid for a 3 day boot camp but being a quick read i had 3 deals by the time i got to the boot camp i was proud  and i showed up at the boot camp with my new friends from the free seminar but i did have an assignment cluase in my contract but this was my result for showing what happened i was almost thrown out of the boot camp i also didn't close the deals and i didnt know i agree to a price that was only 15000 dollars over my best offer so i learned due your research on the area  comps and stay away from gurus and marketing marketing marketing its mandatory to generate leads