My first 12 months wholesaling houses in Charlotte! The truth!
Hi BP, I have not posted in a while and I wanted to tell everyone about my first 12 month wholesaling in Charlotte NC. I will tell you it was not easy. There were highs and lows. I did receive a 30k assignment fee and did about 5 other deals! I also lost a 30k deal that I thought I had, which was a big blow. I was doing every aspect of this business essentially by myself this entire year. I want to pull back the curtain and open myself to any wholesaling questions. I feel like I have learned a lot and want to help others in their journey.
I will get things started with the most common question that I get asked which is...How much money do you need to start out as a wholesaler? The answer everyone wants is 0 dollars, just hustle but I can say if you are going to do marketing you need to plan on spending 2,500-5,000 per deal in a competitive market(5,000 seed money will work if spent in efficiently) Hustle alone will not usually scale you fast enough. In my market of Charlotte NC it cost me 5,000 per deal on average. I have spent more than 25,000 in direct mail and we have plans to triple that number this year. At the same time, I am trying to be smarter about what/where we send and tracking areas that may be tapped out or unresponsive to investors at the current time.
OK BP, Ask me anything about wholesaling, I mean anything, Im an open book! I have learned so much from everyone on BP that I am ready to give back. Looking forward to sharing what I have learned over the past year.
Love that you're being honest. I smh when I see newbies say - I'm broke so I want to wholesale as that's a sure path to failure because wholesaling requires knowledge and seed capital to do in a scalable fashion.
What was the biggest lesson you learned in your first 12 months or thing that you wish you did differently?
What's your average cost per mailing - letter or postcard and in your competitive market how many touches before you gave up a specific list.
Sounds like your on your way to greatness.
The numbers worked for all
2 questions. I have read the most important component of a wholesaling business is a good buyers list. Naturally you have to have inventory to sell What do you feel the most important aspect of your business is?
What is the one thing you will not do again? Even something minor that you found was not cost effective or produced no results.
Once again I am glad to see you making it happen and on the road to greatness. May your future success become contagious to all those you know and love
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Cool of you to do this @Ryan Battista!
Taxes. Have you had to file for a full year yet? Do you have to do quarterlies for NC? Itemizing costs of goods sold, mileage, advertising, closing costs, 1099s's received from title co's. I bet it's a lot. Are you acting as yourself or under an entity?
Please share how fed and state taxes - the filing and the amount you have to pay - impact how much you like wholesaling. If not now, please update us in April. Thanks!
@Joe Davalos From what I've heard on multiple BP podcasts is that if you are able to find great deals as a wholesaler and price your deals attractively, you won't need to worry about a buyer's list. If you truly find and offer great deals, people will flock to you. I'm no expert...that's just what I have surmised after listening to dozens and dozens of BP podcasts.
Questions:
1) do you do assignment contracts, double close, or close and then resell?
2) how did you acquire your contracts?
3) what criteria do you use for your list and where do you acquire your list from?
4) which company does your marketing and mailing, if any?
5) how much earnest money do you put down with seller, if any?
6) do you, seller or end buyer need an attorney at any point during the transaction ?
Thank you.
Love the transparency. Everyone wants it to be easy, but it isn't. Good work man, keep it up!
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@Steve Vaughan this kind of reminds me of the golf rush in CA the folks that made the money were the people selling the pots and pans.. that's a lot of money spent on marketing for the return.. I suspect the same amount spent to be a regular real estate agent would be more profitable than the risk of wholesaling..
Just my thoughts.. start a direct mail company no risk of putting the deal together and get paid no matter the results.
Originally posted by @Ray Lai:
Love that you're being honest. I smh when I see newbies say - I'm broke so I want to wholesale as that's a sure path to failure because wholesaling requires knowledge and seed capital to do in a scalable fashion.
What was the biggest lesson you learned in your first 12 months or thing that you wish you did differently?
What's your average cost per mailing - letter or postcard and in your competitive market how many touches before you gave up a specific list.
Ray, one of the biggest things that I wish I did differently at the beginning, is to not take my foot off the gas. Wholesaling is about momentum and deal flow and consistent marketing. At first, I would get a contract and then wait 6-8 weeks for my assignment fee in order to pay for my new marketing. I would create too much down time in between mailings.
I mail a mix of letters and postcards of varying content. Cost all depends on volume but I will say that if I am mailing 2k+ letters I can get the price to about 80 cents ea. If I am mailing postcards you can be around the 40 cent mark for generic ones. We have some custom postcards that cost me around 58 cents as well. I have used yellow letters.com with great success for postcards and also open letter marketing for nice looking letters.
One last takeaway, NEVER buy a list and only mail it once! I give every list a minimum of 3 touches every 60-75 days. Then I review the area and the data to plan my next move from there.
Originally posted by @Michael Bowman:
Love the transparency. Everyone wants it to be easy, but it isn't. Good work man, keep it up!
Thanks Michael, I am looking into doing some wholetail deals as well, so I may need a good listing agent in the future!
Originally posted by @Joe Davalos:
Sounds like your on your way to greatness.
The numbers worked for all
2 questions. I have read the most important component of a wholesaling business is a good buyers list. Naturally you have to have inventory to sell What do you feel the most important aspect of your business is?
What is the one thing you will not do again? Even something minor that you found was not cost effective or produced no results.
Once again I am glad to see you making it happen and on the road to greatness. May your future success become contagious to all those you know and love
Joe, Thanks for the encouragement!
#1, A buyers list is important but in a super competitive market like mine it is not hard to find cash buyers to assign these deals to and I feel like I would rather have a small number of capable CASH buyers rather than 500 people I don't know on an email list. As I branch out to areas not as 'hot' as Charlotte, I will focus more on building the quantity of my list.
#2, ******BP, I cannot stress this answer enough****Read this twice as it is IMO gold!! As for something I would not do again, this is a hard one, as I believe that failure leads to growth, but the one fundamental thing would be to not be timid or a pushover. Be confident!!! Even if your a beginner! Be helpful and respectful but know when to close the deal and get them to sign the contract. I left a couple appointments without getting the contract signed and lost those deals to my competitors. One deal I'm referencing that I lost, the wholesaler made 25k profit.
Originally posted by @Steve Vaughan:
Cool of you to do this @Ryan Battista!
Taxes. Have you had to file for a full year yet? Do you have to do quarterlies for NC? Itemizing costs of goods sold, mileage, advertising, closing costs, 1099s's received from title co's. I bet it's a lot. Are you acting as yourself or under an entity?
Please share how fed and state taxes - the filing and the amount you have to pay - impact how much you like wholesaling. If not now, please update us in April. Thanks!
Hey Steve, I wholesale under an llc based in N.C and am taxed based on my net profit like most other business entities. I have been self employed in the car business for 12 years so I'm used to getting screwed on taxes, lol! I have a local accountant that prepares my taxes and itemizes my expenses. I am going to start filing quarterly returns because the IRS is seeming to crack down on businesses that don't.
Originally posted by @Dan Marzec:
@Joe Davalos From what I've heard on multiple BP podcasts is that if you are able to find great deals as a wholesaler and price your deals attractively, you won't need to worry about a buyer's list. If you truly find and offer great deals, people will flock to you. I'm no expert...that's just what I have surmised after listening to dozens and dozens of BP podcasts.
You are correct but you have to keep adding buyers because they are not all created equal. In my market I would say 20 percent of the buyers buy up 90 percent of the off market deals. Im always on the hint for really good buyers, while many others will fall by the wayside.
Originally posted by @Account Closed:
Questions:
1) do you do assignment contracts, double close, or close and then resell?
2) how did you acquire your contracts?
3) what criteria do you use for your list and where do you acquire your list from?
4) which company does your marketing and mailing, if any?
5) how much earnest money do you put down with seller, if any?
6) do you, seller or end buyer need an attorney at any point during the transaction ?
Thank you.
Ok Steve I will try to answer all of these questions for you!
----guys theres gold in here as well!
1. assign whenever possible, its the path of least resistance! I have done all 3 though.
2. not sure what you mean? Who actually drew up my contract that I use? I found a small online and had my closing attorney look it over and give it the o.k
3.I used many different lists. I acquire mine through list source. My main lists are equity lists of owner occupant and absentee owners that are targeted to certain hot areas/nieghborhoods. I also am getting into probate but thats a process that will take some time to master.
4. A couple different companies but I will give you my 2 favorites, fellow investor Michael Quarles owns a company called yellow letters.com and they are great. Prices are reasonable and they have a good selection of choices. I also use Justin Silverio openlettermarketing.com and they have been great. They offer mainly letters in good looking envelopes.
5. I give sellers a due diligence payment of 50-100 dollars when we sign the contract and then 500-1000 of earnest money that I submit to the attorney along with the signed purchase agreement.
6. I use a local closing attorney here in Charlotte. They handle the entire transaction for both me, the end buyer and the seller. Some sellers will want you to use there own attorney and I try to sway them into using mine. Keep in mind as a wholesaler you want to control the transaction from start to finish if possible.
Hi Ryan,
Greatly appreciate the transparency. I'm looking to start wholesaling, and I'm in a very competitive market. I'm curious what differences you feel a competitive market brings or if it's just more patience.
Thanks,
Kevin
Originally posted by @Kevin Smith:
Hi Ryan,
Greatly appreciate the transparency. I'm looking to start wholesaling, and I'm in a very competitive market. I'm curious what differences you feel a competitive market brings or if it's just more patience.
Thanks,Kevin
Hey Kevin, I feel that in an competitive market it can be hard to build deal flow. Theres a lot of competition to get deals and they can be few and far between. My advice would be to be slightly differentiate yourself from your competitors. **Heres the gold, read this next part carefully*** We for instance, may mix in BRANDED mail pieces to be different from the pack. Also we have decision makers answer the phone LIVE(in most cases.) I can assure you most others are not doing this or they are farming this service out to a VA from a foreign country or a call center, i.e Patlive. BTW I was thinking of getting into the Denver market b virtually, we are planning to eventually have a second home in Denver sometime the future so reach out to me if you want to talk further. Good luck in your efforts!
Everyone thanks for the feedback and questions. Feel free to keep them coming for the next week or so. Also for all the newbies out their that think they need to pay for coaching, please don't do it. Just AMA this next week and also read and re-read this thread! I have thrown out some really good info and want to help you take action and pay it forward because of the help I received when I started last year!
I am a new investor from Brooklyn, NY. I want to start off with wholesaling. What advise could you offer and which path to take; i.e., finding a good mentor or purchasing a good wholesaling program. How did you learn wholesaling? Did you learn from a mentor or from a wholesaling program? I hope to meet you one day when I start doing amazing deals. Thanks for your advice on wholesaling. Mike.
Thanks for the shout out @Ryan Battista and I'm happy you are getting great results.
@ryan battista
Congratulations on your success, I commend your giving back in this manner! I have a quick question for you ~ what was the most effective way to get in front of a seller? Door knocking? Letter/postcard sent? Scouring pre-foreclosure site?
Wishes for much success in your future!
Originally posted by @Debi Brown:
@ryan battista
Congratulations on your success, I commend your giving back in this manner! I have a quick question for you ~ what was the most effective way to get in front of a seller? Door knocking? Letter/postcard sent? Scouring pre-foreclosure site?
Wishes for much success in your future!
Hey Debbie,
To answer your question, IMO the best way to get in front of a seller is to send direct mail(postcards are fine and cheaper) to a highly targeted list of people who are over 50, have equity, live in a home that is older and in a desirable area for investors. Pre-foreclosures in most markets are non existent. **TAX DELINQUENT is better! Also I am looking to expand to Colorado and am looking for people who know the market there. I would love to talk if you have the time. Thanks!
Congratulations on your success. I hope to follow your steps in the very near future. I am in Dallas Texas. A great market to be in , but incredibly competitive. I am looking forward to partner with a good affordable marketing company to start my first mailing list. I thank you for your suggestions above. My question : what segment would you target on a 3500 budget as a starter? Stay well !
Hey @Ryan Battista congrats on all of your success in your market. With respect to systems, and since you mentioned DMM, so after your marketing piece hit's the streets, are you just sitting back waiting for the phone to ring? Just trying to wrap my head around that process. Thanks
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Originally posted by @Jay Hinrichs:
@Steve Vaughan this kind of reminds me of the golf rush in CA the folks that made the money were the people selling the pots and pans.. that's a lot of money spent on marketing for the return.. I suspect the same amount spent to be a regular real estate agent would be more profitable than the risk of wholesaling..
Just my thoughts.. start a direct mail company no risk of putting the deal together and get paid no matter the results.
Hey Jay, it sounds like you are saying wholesaling is not a good idea. If I may disagree, the NUMBER 1 skill for investors is to get great deals on properties. This is usually done by going direct to seller(especially in highly competitive markets) The better I can get at sourcing these off market properties, the more money and success I will have. Its a skill not many can master and some of the most successful flippers/investors that I know go direct to seller! Wholesaling is a great way to get really good at this. The end goal is to go direct to seller and then instead of wholesaling the property, flip it or whole tail it, or just cherry pick for a rental. Just my opinion.
Originally posted by @Daniel L.:
Congratulations on your success. I hope to follow your steps in the very near future. I am in Dallas Texas. A great market to be in , but incredibly competitive. I am looking forward to partner with a good affordable marketing company to start my first mailing list. I thank you for your suggestions above. My question : what segment would you target on a 3500 budget as a starter? Stay well !
Daniel, great question. 3,500 will usually not go far in an ultra competitive market. I would recommend getting a more specialized list (code violation or tax delinquents) Narrow that list to about 2,000 or so names. Then mail that list 2 times with 2 different postcards. The total cost would be about 2,500-3k. I would answer the phone LIVE. This will give you an edge. Not everyone is doing this. Then you will need to gauge motivation and go on appointments. Theres no guarantee but if you a putting in the work results will usually follow.
Originally posted by @Shawn Ackerman:
Hey @Ryan Battista congrats on all of your success in your market. With respect to systems, and since you mentioned DMM, so after your marketing piece hit's the streets, are you just sitting back waiting for the phone to ring? Just trying to wrap my head around that process. Thanks
Hey Shawn, at this point we are mailing more frequently and we are staring to plan our campaigns more carefully to reduce downtime. If we have 2 distinct lists, we are trying to alternate them so every 2 weeks we have mail hitting. This will help control call volume and keep leads flowing. **Now, if you are new and you don't have a ton of marketing going out you need to do it differently. In between your mailings you should be working like crazy. Putting out signs, driving for dollars, going to reia meetings, building your buyers list and pulling smaller niche lists like tax delinquent or code violations to send in between big mailings. Hope this helps!