Brand New to REI in CT

[Laura Wyzykowski]

Hi everyone, 

My Name is Laura and I aspire to retire with passive income from rentals. I am a secretary in our HIgh School. I've been reading and learning all I can before I jump in the REI waters. The more I read the more I realize how little I know! Since I don't have funds I am focusing on wholesale strategy right now. I am getting hung up on how to know a house is a good deal for a flipper and lacking the confidence that if I get it under contract that I will find someone interested in the assignment. I am concerned with what if I get stuck with it and I dont have the funds to pay for it. Not a situation I want to deal with! How do I avoid this situation?

Thanks!

Laura

[Mitchell Roadruck]

Hey @Laura Wyzykowski! To kill 2 birds with one stone, I would recommend first finding your flipper aka end buyer. Build a relationship with them, walk properties with them, let them mentor you on how they underwrite deals. Ask them to meet you at an appointment and walk the property with them. After they privately give you what number they would like to get the house at, go back to the owner and get the contract under that price. Aside from that, most wholesaler I know have a clause in the contract that allows them to back out in the event they cannot assign the property. 

[Bob Reinhard]

Welcome aboard Laura!!!

Feel free to reach out to me at any time for questions that are more involved than a back and forth post.

Much success - happy investing !!!

From outside of Danbury,
Bob

[Samuel Eddinger]

Hey @Laura Wyzykowski.  I am an investor, flipper and owner of a property management company in CT.  I'd be happy to have a phone call with you. DM me if interested.

The short answer on wholesaling is to do it well you need to be process minded and build systems.  There are already a lot of wholesalers in CT so the market may be saturated leaving you frustrated.  Most wholesalers buy lists and perform mailing strategies as well as have virtual team members who make the warm up calls and then the owner (you) close the deal.

You need to be extremely aware that people will be mad at you, calling you names, swearing at you, etc because for you to make money at it, you need to buy it below market value.  If you are unwilling to work and unwilling to be beaten down repeatedly, wholesaling will not be right for you.

In general, to be successful in life, you need to focus on playing the long game.  This means networking with people and being persistent.  I am now reaping benefits from the relationships I facilitated 5 years ago.  I measured my worth and success at that time based on the number of good calls I had and not the number of closed transactions.  

One final note, owning real estate can be very rewarding and very profitable but it is most definitely not passive.  People have a misconception that you just buy a property and the money comes rolling in.  This is the furthest from the truth!

[Drew Sygit]

@Laura Wyzykowski

Per this NY Times article, the average American knows around 600 people.
https://www.nytimes.com/2013/02/19/science/the-average-american-knows-how-many-people.html#:~:text=The%20average%20American%20knows%20about,do%20you%20know%20named%20Kevin%3F

Per the US Census Bureau, the average American moves 11.7 time in their life, which based upon an approximate lifespan of 84 years, works out to be about every 7 years.
https://www.census.gov/topics/population/migration/guidance/calculating-migration-expectancy.html#:~:text=Using%202007%20ACS%20data%2C%20it,one%20move%20per%20single%20year

So, if the average American knows 600 people and they each move about every 7 years, that means that the average American knows around 85 people that move in any given year.

How many of those moves do you want to be involved in?

To maximize the number of transactions you’re involved in you will need to:

• Be Top of Mind when they think about moving - which requires consistent reminders.
• Be seen as an Expert – which requires a consistent message and Evidence of Success stories
• Gain their Trust – which requires communicating integrity

So, start out by listing everyone you know in an Excel spreadsheet.

Why Excel? Because later, you can easily use it as your mailing list! Create columns for Name, Street Address, City, State, Zip and then contact info: Last Contact, Relationship, Status, Email & Phone.

IMPORTANT: do NOT ask people for THEIR business, ask for referrals! Why? Because they will get defensive if they feel you are pressuring them. Remember, they can always refer themselves😊

Now, make it a goal to call at least 5-10 of these people EVERY day and ask a MAX OF THREE off the list below of who they know that:

• Just inherited a home
• Had a loved one pass away
• Is behind on their mortgage or tax payments
• Has a relative that can’t take care of their house anymore
• Has a house they’re having trouble selling
• Is facing bankruptcy
• Knows a probate attorney
• Knows a bankruptcy attorney
• etc

Why only three off the list per contact? Because on average, we can only remember three things at a time. If you try to go over the whole list, you’ll lose the attention of an average person and they won’t remember anything!

It should only take you about a month or two to contact everyone on your list and then the tough part – you start all over again.

Why the repetition? Because it takes repetition for people to remember things and you have to be top-of-mind when they encounter a potential client for you!

Have you ever been to McDonalds? Of course you have! So, why is McDonalds still spending billions on advertising?

One more tip – people remember stories that trigger their emotions. So, tell a story of how you (or a fellow wholesaler) helped a seller out with their challenge(s). Change your story each month as different stories will resonate with different people AND use each story to emphasize one of your “who do you know…” questions.

As you start closing deals, you will need to reinvest your profits into mailing lists and other scalable activities to grow your business.

One last thing – we recommended you create a Status column on your spreadsheet, now we’ll explain why. If you find someone that seems to know a lot of people needing your services, wouldn’t it make sense to focus more resources on them? Conversely, you will run into people on your list that just seem to be a waste of time, so you’ll want to avoid them. So, create status codes for both of these and a few in-between codes to help you work smarter, not harder.