Wholesaling Experience
Hey fellas, just here to share some experience from what I think is an interesting topic in Real Estate which is wholesaling. I started a company, so I can leave corporate America and become my own boss. Easier said than done of course, so I share some of the hurdles I went through as well as give some advice for those who may be going through the same thing. I hope to learn different opinions and views on the matter. So as we know wholesaling is a great way to make some cash with little to no money in your pocket. We do it with the goal to help the seller out and the cash buyer out, while making some profit. But the process is what gets people a little scared.
Those that know the process understand you find comps, and make your offer, but some tend to over complicate the process and that is where the hesitancy occurs. I can only speak for the people in the Massachusetts market, as Boston Real Estate is a whole different game and when it comes to wholesaling you better be come with guns loaded and know your stuff.
One of the biggest issues I've encountered as well as others have are comps. We are real estate investors, many come from a Realtor background while many haven't. Finding comps is at time intimidating because this is the part where if you get wrong either you leave money on the table or lose money, and loosing money should never be an option. But those who aren't real estate agents, myelf included, we do not have access to the MLS which stops many in their tracks! That is where your power team comes in, the Real Estate Agent on your team should be able to get you comps. That being said it has been my experience that when I ask agents in networking clubs if they would help me get comps for wholesaling, they tell me they do not do work for free due to the fact we are not able to promise them that we can list the home under them once it is rehabbed, if we are working as wholesalers. So if I want comps they would require a fee, something that I am not willing to pay for every home I am going to be writing an offer for, and in our line of work we make a lot of offers.
SIDE NOTE: And the one time I managed to find an agent to help me with comps, he turned out be and investor as well and he hired me to be on his team with the promise and glamor to mentor me and actually be the cash buyers to any wholesale deal I may have. I in return would have to cold call and find him listings for homes for hours on end while I gained nothing of it and was not applying my knowledge unto the field. I would be steered away away from wholesaling and given speeches on how wholesalers are essentially real estate agents trying to sell a home. The same Real Estate Agent would try to give me buyers remorse as I signed up for the Rich Dad Education so I would dedicate my time to him. SO BEWARE wolves in sheep clothing, they may want to steer you away from your own goals for their own gain, because I actually lost deals because of the agent. I had found two properties that were flipping opportunities and great deals. I did the negotiating while I simply asked him for the offer price we should use. On one particular deal the offer was verbally accepted by the seller's agent and all that was needed was to write up the contracts which was the my agent's job as he promised he would do it, a mistake I learned from. He would tell me to contact the seller's agent and tell them I will have the contract for them tomorrow the next day. Comes the next day, my agent had not written the contract, and I'm told to tell the seller's agent to expect it instead the next day. I was very disappointed in having to once more tell the agent to wait another day on something I promised that would be on time. The next day comes and still no contract to which the seller's agent contacts me and says that per consultation of his attorney his client has decided to not sell to us. I was livid, but not to the fact the seller had backed down, but to the fact that I was working with someone who was loosing me money but more importantly costing me my credibility with other people! The Agent did not apologize and simply said that he chewed out the seller's agent, whom I do not blame not a bit. And then he had me contact the seller personally once we found his number through some detective work, and the seller simply said he accepted another offer and that was that, I wished him a good day and hung up. My agent who was not satisfied told me to call him back and tell him that he should dump his agent and hire him instead. I hesitantly did so and as expected the man would not cut ties to a long time friend who he trusts and essentially told me to get lost. I came to realize I was being used by someone who was simply looking for an assistant with the promise to mentor while I learned nothing at all. And sorry to digress, but to conclude this segment of the post, do not accept just anyone to your circle of trust and much less to your power team, you work for yourself if someone promises you gains for your time, you may as well be a W-2 in corporate America, and actually get paid instead of me who wasted countless hours for no pay and lost deals, while I could have looked for properties for myself and made cash.
So what was I to do? I could find no real estate agent who would want to be a helpful member of my power team. It was a road block to my goal to wholesale properties. So I contacted Rich Dad and asked for the help I am paying for as to how the Hell I get comps without an Agent, because I was having no luck finding an agent who could help me with the comps. I had a wonderful lady by the name Christine helping me out and she has had experience wholesaling, she told me that it really isn't up to us to come up with very accurate comps. Our job is to get property at a large discount, and she recommends getting a ballpark estimate using realtor.com or trullia.com for comps, they would be good enough for a rough estimate, but the point is offer a little less than half is the rule of thumb, if you aren't embarrassed with your offer it isn't good enough. It is the Cash Buyers Job to look at the offer you have and determine if the price you have for the property under contract is a good enough deal doing his own comps, because if it was a good enough deal there's no way a savvy investor would pass it by. "Ay there in lies the rub", as Shakespeare would say, comps proved to be the most difficult part of the process for yours truly. But that is my advice which I went through adversity to come to understand and realize. Because even if the numbers you came up with maybe aren't good enough for investors, your contingencies would get you off the hook.
But if you are going through difficulties such as I did, don't lose faith in your abilities and your business. It doesn't take a genius to follow a process that will make you millions. This is about being clever and that comes with experience, but most of all it comes with attitude and work effort. I went through some difficulty, I would get lose momentum after what I went through with that Agent. And at the time, the funds to keep my business going was costing me more money than it was making me. The whole Real Estate venture is being done through me and funded mostly by my father. As more time passed by without results, it would break my heart seeing money gone to waste. So I put a hold to the websites and the software which in total was more than $150.00 a month not including the $300 a month we spend on Rich Dad a month. I decided to go back to looking for a part time employment so I can have enough funds for my own business. One thing led to another but six months went to waste as I was not able to concentrate solely on Real Estate. But, I was told not to give up and be an entrepreneur, when I asked for advice to my situation I was told that a business is like a Michelangelo sculpture, it takes time to mold into what you want it to be. But it requires action. So don't sway from your goals people, if you have a business feed it. Go out and look for deals.