I recently read David Greene's book on long distance investing where he mostly looks at building teams like contractors, agents, lenders and property managers. I am looking at taking a similar approach, but beginning with wholesaling. This would allow me to get my marketing and acquisition systems in place and make some money doing it. Then expand one step at a time. Adding in seller financing might be a next step. Then adding pieces such as a property manager and keeping a couple of deals in order to build long term wealth and cashflow.
Has anyone tried this? What are some of the challenges I may face in trying to wholesale from a distance?
@Aaron Wortham I am a wholesale investor- read some books, listened to the podcasts, and all of that good stuff too before I got started.
Its definitely tough to get started and takes a lot of persistence. From my experiences, its best to be very familiar with the markets that you are targeting. I personally believe that this may be challenging if you are looking for off market deals in areas that you truly don't know. I would suggest trying to start off in areas that feel comfortable with and know the numbers. Once you get your feet wet, then start move towards the long distance stuff.
@Joe Sadusky I think I am in a bit of a unique situation in that I've moved around a bit. I currently live in California, which is very expensive and very competitive. But this is my sixth state to live in. I spent 14 years in Colorado, 5 years in Arkansas and about 7 in Wyoming as a kid. Nebraska and Kansas are also on my list, but I haven't lived there since I was very young. All that to say - I would feel more comfortable starting wholesaling in another area, if logistically it is possible and I can get my systems setup.
If you tap into the Lincoln, NE area I would go on appts and work some sort of joint venture with you.
@Aaron Wortham hit me up. Lmk how things go as you get started.
@Aaron Wortham I'll echo what @Joe Sadusky said in being familiar (intimately) with the areas you are targeting... We've been at direct mail marketing for a while now and I'll tell you markets and areas change in short time. We ALWAYS "partner" with one of the areas top agents. We feed them leads and listings and they run comps and help us understand risks better. Win-win. That being said every property we offer on we intend to close and rent or flip. Occasionally, our dance card is full and we will assign a contract to one of our fellow investors or a contractor that works for us. Either way the certainty of the deal closing is 100% and everyone benefits.
The 2nd thing I'll say is KNOW THE LAW for the states and areas you are "wholesaling"... For example here in Arkansas it's all based on intent and there was a ruling recently which makes it very dangerous to follow the "gurus" methods. Frankly, I think their methods and in short generally misleading people about your intent is due cause to be penalized... No risk, free money doesn't exist and following said methods above shows people your integrity (or lack of) when putting something under contract with no means or intent to close. You're messing with peoples lives and most times their largest investment and how you handle these situations can change their lives for better or worse, just remember that.
Thanks @Dustin Davis . Really solid advice. You don't have anything if you don't have your integrity.
This is definitely a direction that would rely heavily on a partner/acquisition manager in the area as well as a lot of area specific research.
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