Commercial Real Estate Investing

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Curious about Wholesaling.

Posted Sep 8 2019, 05:11

I recently went to a free real estate seminar that involved wholesaling. I won't use the name as I'm new here. And I don't want to break.any rules. But basically it involved having an inside line on new properties for sale through the company. And you could buy them for cash with assistance from inventors found by the company. And the cap was up to 1Million dollars ( I have a feeling some will know who I'm referring to by that ). It just seemed unrealistic to me. And the service they offered to look up these properties seemed like a search engine not a provided list. The expenses before payout didn't seem unreasonable. But I wasn't convinced enough to fork out the $1000 for the workshop to learn. I'm really interested in learning. But obviously avoid the money grabbers. Insight and advice appreciated. I'm in my mid 40s. So this seems like the time to get going. 

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Greg Dickerson
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Greg Dickerson
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Replied Sep 8 2019, 15:42

This is a typical seminar funnel. The idea is to get you to pay $1000 to get you in, then you will need their $5000 system then $20,000 coaching. I have had several people come to me that have spent $50k - $100k with programs like this and never did one deal. 

There are no secret proprietary lists, special systems or software. It’s all about knowing your market and consistency.

Here is everything you need to know to be successful wholesaling.

First step is to make sure you understand the laws in your area regarding assignments and double closes. They are changing and several states have passed laws requiring a license to wholesale property.

You should talk to a real estate attorney or title company that works with investors in your area to ensure you are in compliance with any laws. They will also have the proper contracts as well.

Next you need to educate yourself on the business and your market. You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers. You want professional legitimate cash buyers so you know you can close on the deal and do what you tell the seller you will do. I can’t emphasize this point enough. You do not want to contract a property unless you know you can close it or take it down yourself.

Different types of cash buyers are flippers, buy and hold, subject to and lease option. You need to find several of each of these types of buyers and learn what they are looking for.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups, Realtors, title companies, closing attorneys, property management companies, auctions, Craigslist, and bandit signs.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase. You can also buy lists from companies like list source and there are some REI software companies that have a cash buyer search feature.

Best way to find motivated sellers is to purchase lists and compile lists from city and county for 60-90-120 days late on mortgage, pre-foreclosure, delinquent taxes, water cutoff, code violation, probate, divorce, high equity, etc. and mail or cold call.

Other methods are driving for dollars, door knocking, wholesalers, craigslist, Realtors, FSBO sites, expired listings, foreclosure sites, put out bandit signs, billboards, newspapers, other offline publications.

You can use pay per click/adwords, facebook, Linkedin, Youtube, and other forms of online and social media.

Bottom line is consistent action, follow up and follow through. It’s all about speed to lead. When the phone rings make sure to answer it.

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Replied Sep 8 2019, 15:49

Thank you Greg! This is great details and very helpful!

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James Wise#2 Real Estate Guru, Book & Course Reviews & Discussions Contributor
  • Real Estate Broker
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James Wise#2 Real Estate Guru, Book & Course Reviews & Discussions Contributor
  • Real Estate Broker
  • Cleveland, OH
Replied Sep 9 2019, 04:39
Originally posted by @Jay Bousquet:

I recently went to a free real estate seminar that involved wholesaling. I won't use the name as I'm new here. And I don't want to break.any rules. But basically it involved having an inside line on new properties for sale through the company. And you could buy them for cash with assistance from inventors found by the company. And the cap was up to 1Million dollars ( I have a feeling some will know who I'm referring to by that ). It just seemed unrealistic to me. And the service they offered to look up these properties seemed like a search engine not a provided list. The expenses before payout didn't seem unreasonable. But I wasn't convinced enough to fork out the $1000 for the workshop to learn. I'm really interested in learning. But obviously avoid the money grabbers. Insight and advice appreciated. I'm in my mid 40s. So this seems like the time to get going. 

Bruh.......Wholesaling as it's taught is a myth. You need a license to Broker real estate. That's all wholesaling is as it's taught in these programs, it's brokering real estate except instead of being up front & telling the distressed seller that you'll sell their property for X amount & take X amount as your commission / fee you are taught to lie to the seller & pretend you are going to buy the property while you secretly attempt to "assign" your contract.

It doesn't work. Nobody has any respect for wholesalers. Whenever a wholesaler contacts me I simply get the information about the property & reach out to the owner myself cutting the wholesaler out of the deal entirely. If you do business above board as a licensed agent that won't happen to you. The only people making money wholesaling are the guys selling you all of that education.

To be successful connecting buyers and sellers you need to have

  • An in depth knowledge of the market.
  • Marketing skills.
  • Sales skills.
  • Negotiation skills.
  • Accurately estimate rehab costs.
  • Understand how to much time it would cost to run a renovation on the properties you are presenting.

 My advice get a real estate license. Way cheaper, no legal issues, more respect and there is a decent chunk of cheap or free training out there from the mega brokerages. Soak it all in while you're trying to get off the ground. It's not an easy job, 90% fail rate but it's better than the 99.9% "wholesaler" fail rate.

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Replied Sep 9 2019, 07:40

There are so many money grabbing groups/people in the real estate and investing community. People that "sell" their ideas as gospel are so bad for the community.

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Corby Goade#1 Tucson Real Estate Forum Contributor
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Corby Goade#1 Tucson Real Estate Forum Contributor
  • Investor
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Replied Sep 9 2019, 12:25

Everything you need to know in order to be successful in real estate at ANY level is available to you for free, a great deal of it right here on this site. Ignore the hype and the gurus- read up, listen to the podcasts and start going to some local meetings, you'll have everything you need at your fingertips and it will just be up to you to act at that point. 

Good luck!