My name is Ariel and I'm new to BP forums. I am 29 years old, a TOTAL newbie on REI, never bought a house nor invested in one, and I work full time as a chef.
I'm here to seek advice from experienced investors on how to get started as a wholesaler. I'm willing to put the work needed to learn and hopefully one day I will be able to buy my first investment property.
- I have couple of cash buyers who want buy and hold (living in LA, they are going for the equity). They encouraged me on pursuing this route, but it seems that they don't really know the process of wholesaling themselves.
- I have budget of 1000 dollars a month to put on direct mail marketing.
- I am working on a website and setting up a phone calling system.
Where do you suggest I get my list from? listsource? Tax court?
Which seller market should I target as a newbie? Absentee owners? pre forclosure?
How much equity should the seller have? I'm still very confused what equity does on the whole equation.
In LA in general, what percentage under market value should be my target? 70%? if that is even possible.
Living in Southern California, in the Valley specifically, where do I get the appropriate contracts that I need to do a proper wholesaling?
I apologize that I have so many newbie questions, but I recognized that here would be the best place to ask.
Thank you so much for your help! I really appreciate your help and guidance.
go on you tube watch has many as you can of a guys channel : Wholesale to Millions( start with this) and also the Flipman wholesaler that should help you get a good picture
Flipman will answer some of your questions as well ...
I don't want to be a negative nancy, but I wanted to share our experience. We stopped doing direct mail over a year ago. We were probably averaging between $1000 and $1250 a month at our peak. Over the two years or so we were doing it, our response rate was less than 0.25%. I've talked to a few large wholesalers across the country, and most of them said their experience is similar, except they have the ability to spend $10,000 a month or more to get their deals. The few leads that we did get, their asking price was so far from what we could offer, that it wasn't even funny. The sad part is, they can probably get close to what they are asking by putting their home on the market, as it's a huge seller's market in our county.
@Violetta Christensen Thanks for the recommendations. I am checking on the videos at this very moment. Thanks!
@Cornelius Charles Thanks for sharing your experience. What type of homeowners did you target? What other type of marketing are you planning to pursue now that direct mail gets you no leads? I would love to hear more about your experience. I wish you the best!
Many people are having success with direct marketing. One target might be Seniors wtih 15+ year ownership - especially if you add in Low Financial Stability Scores (FSS). This is a group who are likely to be ready to downsize or transition into assistance. They probably haven't done any updating in quite a while, so you have a good renovation opportunity.
Think of all the services you can offer to make it easy to sell AND to move and include that in your letter.
Congrats on making it this far and reaching out on BP, you're closer to your first deal than you realize. Like all sales related businesses it's all about numbers, the more people you can reach out to the more likely you are to get a deal. You can make your $1,000 go further when if you were to write you direct mail letters by hand yourself. You would just have to pay postage and for the writing materials. Setting up a website is great and you can maximize traffic by creating SEO campaigns via Facebook and Google adWords. I'd start with absentee owners, property that was not purchased from 2005-2008, exclude corporations and trust owned. Listsource provides pretty good data but there are better sources elsewhere. Please feel free to contact me directly with additional questions.
The only type of marketing I am doing now for the investing side is SEO work. Our site is ranking pretty well for quite a few keywords in our area, so I will continue that for when the market turns. After direct mail, we actually used a company to help us with google AdWords. We did that for 4 or 5 months and only got a handful of leads. We weren't reaching anywhere near our marketing budget and the determination was that there just wasn't enough people searching for "sell my house fast" type keywords in our area. Partly due to the size of our county, but mostly to it being a huge seller's market and sellers having many options to sell their house without needing to search for investors to sell to. This is my assumption as to why we are not getting many SEO leads, despite being ranked 2nd for quite a few keywords.
For direct mail, we targeted absentee owners, divorce, NOD, and bankruptcy (I think I'm forgetting one). We also looked into targeting only people who were on 3 or more lists, as those should have a greater sense of urgency, but that number of people was so small we just would not have been putting out enough mailers.
All that being said, I have shifted most of our marketing focus to my wife's realtor business, as that seems to be the best strategy in this market. Mainly doing SEO, but also testing the waters with Facebook ads and google AdWords. I set up realtor AdWords campaigns a little over a week ago. Although we haven't gotten any good leads yet, our click-through-rate and cost-per-click appear to be a lot better than our investor campaigns were. I will continue to collect more data from AdWords and then do some tweaks after a few weeks to try and maximize results.
Hi I am glad you are watching what I recommended ..try starting with 2018 he gives a lot of practical info and tells you what it is like day to day as a wholesaler. Overcoming fear of the first sale and calls etc. Kong is very good so is the Flipman different styles..LOL keep in mind "wholesale to millions" AKA Kong Le does a life tape on Friday look at most recent too. Good luck ..hope this helps get a picture for you.
@Ariel Lee I'm a wholesaler in Southern California. Your best bets are Bandit Signs/Craigslist/Cold Calling. If you have 1000 in Marketing, I recommend allocating it to Big Data collection, and hiring VA's to Cold Call with you. With 1000 bucks a month you should be able to land at least 1-2 deals per month if you have a good team around you.
I sent you a Connection Request, I'd love to network and hopefully JV on a deal or two!
Welcome to the game!
@Account Closed Thanks for the request Diego. Honestly I would be VERY happy with 1 deal a month at this point. I never thought of cold calling sellers. How would you get the seller's phone number? Do list brokers provide you with phone numbers as well? oh and a JV would be great!
Wow. 2 deals a month with a $1000 budget in Southern California. that's amazing.
I'm a new investor myself and I have not completed any deals yet. I have spent the last 6 months investing in my education, listening to podcasts, attending webinars, etc. I just started reaching out to leads this month and other investors/real estate professionals and it's been a great experience so far.
I think it's important to establish a system that you can track, budget, and improve. I believe you can purchase some of the documents you're looking for from BP, but I've been advised to always run them by a contract attorney to make sure that they comply for your specific area. If you're talking to an agent lead, they will often have you sign their purchase and sale agreement, just make sure it's assignable.
You'll have to gauge what works best based on the time you have available. For me, I work a full time job M-F 9am-6pm so I prepare my day the night before. Doing things that work for you while you're at work (like Craigslist ads, direct mail, networking with agents, and web presence) are great! Just make sure that your money is going to the best use possible.
The owner's equity is important because that often determines the minimum amount you can offer them (because they need to pay off the loan). For example, if they have 30% equity for a $100k listing, your minimum offer will typically be $70k because that's what they need to pay the remainder of their loan. With wholesaling, you're looking at the after repair value and the ROI for the investor buyer.
In the simplest of examples, say that $100k property would be worth $200k after $40k in repairs, you put it under contract for $80k (the seller gets $10k profit) and assign the contract for $15k, that leaves a good profit margin for the investor buyer. But there's title insurance, commissions if the property is listed, hazard insurance, and plenty of other things to keep in mind so education is definitely the best first step.