My First Wholesale Deal. Started From Nothing

55 Replies

Investment Info:

Small multi-family (2-4 units) wholesale investment.

Purchase price: $40,000
Cash invested: $1,650
Sale price: $50,000

This was a contract assignment situation.

What made you interested in investing in this type of deal?

The low cost entry. Wholesaling is such an excellent strategy for beginners.

How did you find this deal and how did you negotiate it?

I sent direct mail using all handwritten letters from driving for dollars. Seller responded on my first mailing. Negotiation was quite simple. I asked what the seller was hoping to get for the property. I used the 70% rule w/wholesale fee to come to my purchase price. I explained to him that because of the extensive repair needed, this is the number that worked for us. He was quite understanding.

How did you finance this deal?

I saved money to afford driving, buying envelopes and stamps. My total expenses in D4D from the time I started until the deal closed was about 1200. Then I had to buy a 450 title policy to make the deal work.

How did you add value to the deal?

Brought a screaaaaming deal to an end buyer, and helped the seller move the property quick and easy

What was the outcome?

Closed in 2.5 weeks. Picked my check up from title company. It was smooth

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

There were no other real estate professionals I worked with.

Guys I am so excited to have completed a deal. It could not have been done if it weren't for the local community of investors around me who have continued to encourage and support me. I am so grateful for all the hours I have spent reading book after book, listening to podcasts and webinars, and hanging out on BP. I started from absolutely nothing. I just moved to Lubbock from Brazil in January and hit the ground running. Got my first deal in right at 3 months. I hope to be an example to other newbies. If I can do it, anyone can. Now I am focusing on expanding my marketing and funneling the cash back into building a business. I just formed an LLC and am getting very close on my second deal. To anyone reading this who is having doubts, or is discouraged... Just give it time, and let the direct mail work. Money lives on the other side of fear. There are deals out there. No one can get every single deal, but be assured that every deal will be found.

@Jarrod Frankum Do you have a day job? Driving for dollars can be very time consuming. If you want to scale up your business, you might want to spend some of those initial profits on a full-fledged mailing with a purchased list. That way you can spend your time evaluating and making deals rather than driving around and researching owner information.

There are several effective lists for finding off-market deals. These can be selected 

property criteria 

  • size, single/multi/condo, beds/baths, age, etc 

owner criteria

  • owner occupied / Absentee
  • age - seniors often ready to downsize or transition to assistance
  • Financial Stability Scores (FSS) find owners likely to be struggling financially

Congratulations on your first of hopefully many deals!

@May Emery

Yes I do have a day job, but it's more of a morning and evening job. I know that d4d is quite fine consuming. By no means do I consider it a scalable business. However I believe that it is the best way for me to get to intimately know my market just starting off. I've got just over 500 leads and am having quite high response rates. I fully plan to transition into list buying and expand out from there. But it was the best way for me to start.

Thanks for sharing some of your criteria. Who have you had the best success with for buying lists?

First, congrats on your first deal! I can't wait to experience the feeling as well. Second, do you have a formula to determine your wholesale fee or do just apply a flat rate? LLast, if you do have a formula or method for determining, would mind sharing it? Congrats again!

First, congrats on your first deal! I can't wait to experience the feeling as well. Second, do you have a formula to determine your wholesale fee or do just apply a flat rate? Last, if you do have a formula or method for determining, would mind sharing it? Congrats again!

@Evan Poole

Thanks man. Lubbock is arranged conveniently in a grid shape. Streets running east to west are all numbered 1st, 2nd,3rd...... And streets north to south are lettered. A, B, C.... there are more streets than these but it's a very easy system. Then there is a loop around the city, so it is really quick to get anywhere. 15 minutes tops to any place in the city.

I am a Lubbock realtor, so that made finding values much easier for me

@Evan Poole don't let that be a smoke screen to stop you from starting. There are buyers for every type of home. The point is you gotta get out there and make it happen. It took me 3 months of no return and thinking that this is a total waste of time before a deal came. I just had the will power to fight the negativity.

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