Risky business of wholesaling/marketing in small town and so hclose to home?

Question

Upon researching more, it sounds like a risky business to try and coordinate in such a small area/town and so close to home. With marketing and bandit signs and etc, I might run into homeowners who may know me personally. Or people who know I'm starting this investing business and (by word of mouth) discredit me before even starting. Especially being so young. Basically, I don't think I could get the traction before even starting.

I know I can just market outside the area, but does anyone have any suggestions or has ran into this issue? Anyone who lives in a small city would understand.. Anyone?

Just a thought.

Thanks!

I know I can just market outside the area, but does anyone have any suggestions or has ran into this issue? Anyone who lives in a small city would understand.. Anyone?

Just a thought.

Thanks!

Arlan Potter · Answer

I would find the older couple in your town that started buying rentals in the 80's and has a boatload of them. Ask them about why they do what they do, how they got started, how it has changed their life. After that conversation, go and do the same. Start buying cheap houses to rent. Before you know it you will have an empire.

Forget schemes, and bandit signs.

Paul Choate · Answer

@Crysta Balbontin about wholesaling in small towns (I am a buy and hold guy, but always looking for more):

I am from a town of 10,000. The reality for a wholesaler is you only have a limited amount of opportunities at any given time. So, you need to think in longer time horizons. Also, you don't need the tactics of "regular" wholesalers because you are not just trying to hit the largest numbers of people. I can drive my entire town in a day.

Example: I had been watching a house for two years and had mailed the owner a couple of letters. I noticed one day that the door was open so I sent another letter. The next week it was boarded up and had a no trespassing sign with a number on it. I called and it led to an out of state owner selling me 5 houses because they were tired of dealing with the city.

You are not going to get many of these in such a small area. I have had to add two surrounding towns as I have grown to find more deals. But, if you make it a part of your life to drive a new street every day, send out 50 -100 letters per month, hand out business cards and tell everyone you are a real estate investor- you can build your reputation and grow.

The best thing is you can be the only game it town. With that comes the reality that there is not much game to go around so you have to have other business/jobs to support you while you are growing or expand your area. Good luck!

Crysta Balbontin · Answer

@Orion Walker  Hey Orion, that's awesome! That's exactly what I plan to do once I get some of my own capital to contribute. Renovation loan, are you referring to the 203K? Just wondering. I can't wait to get to a point where I feel comfortable with my funds to take a leap into acquiring a property to do renovations on for a first time fix & flip! Talking with some of the other investors, one said, quote " yeah, flipping is where it's at right now". I am hoping the market stays on a high until I can get to that point because my brain is filled with design ideas!

Anyways, about the small town thing. I have thought about it and I just think that there are tons of family struggling in my area. I personally know what kind of hardships this can put on the family unit. More and more families in my area are going homeless; for one wild guess, I'm going to say from foreclosures. It is a D.C. metro up-and-coming suburb-type area, so I get the inflation. But my heart melts for these families. I honestly don't get the impression my area would even have wholesalers. Or that people here knows what that is? I've checked craigslist looking for local postings about needing cash buyers for properties, or anything indicating a single person advertising who sounds like a wholesaler. I've checked all local news papers and their ads for properties needing cash buyers. I don't know.

If I started, the families wouldn't be getting full selling value for their property, obviously. But even getting something and getting out clean would help; granted they have enough equity in the property, etc. But I would just love to get active and really help these people. Do the legwork. The investors here, they want good deals and there's a good amount of CB's that I've found. I've heard them mention where they've went to auctions to get deals. Houses that were foreclosed on, owned by the bank, then auctioned off, am I right? I'm hoping my passion won't be overlooked because of the profit I may make, but really helping people and my community is my passion. So, thank you!

Q: Is it easier for investors to purchase their deals from these auctions, or from a wholesaler?

@Mary B.  Girl, you are absolutely right. So many things fell in to place today that proves what you just said. I'm trying to change the mindset! I want to do this and realize my full potential. You know, experience Maslow's theory of self-actualization! I'm even contemplating opening a small cleaning business to earn some of my own cash to invest in real estate! I am in college, but so over the hype of what college sells to the young generation. (Pay to) go to school, finish years for your degree, get job with that degree (God willing), work your job with that degree to earn money to pay back debt, don't obtain your full income because a percentage of it is going to go to paying off the debt you acquired to go to school, and don't move up unless you're willing to pay for more schooling. Yes, this applies to the medical field. I'm over it. And I even have straight A's right now..

Anyways, Thank you for your motivational words. And wish me luck :)

Mary B. · Answer

IMO, the fact that everyone knows everyone is a plus. You don't need bandit sign(which are often frowned upon by neighbors and may be illegal according to city/town laws). Most investors-to-be starting out have to spend hundreds if not thousands of dollars just to get a phone call or appointment with owners of property. You don't have to worry about that in your town.

Like Dev Horn mentioned, your thinking is what needs changing here. Positive thoughts followed by positive action yield success.

Its normal to be nervous but keep pushing yourself forward and get out and talk with the towns people one on one at first. They will have questions so my suggesion is to do some prep work so that you can have good strong answers for them. Maybe write down the questions you want to ask them and have that handy. Already knowing them should cause them to be warm and inviting to you apposed to a stranger. My coin.

Kudos,

Mary

Orion Walker · Answer

Hey @Crysta Balbontin, I'm in a similar boat in that I live in a small town (30k) and I'm looking at starting to do some marketing. In my case I've managed to get started with an owner occupy triplex which is now rented out. I'm currently in escrow looking to do a renovation loan on a two house property. In my case I have enough income/good credit to get started this way. I needed about 12k to get into the first one (3.5% down) and will need about 20k on our current escrow. We've managed to patch that kind of money together with some help from family. I think people will take you a lot more seriously if you can figure a way to get one or two properties/deals under your belt.

In terms of marketing in a small town, I would say think about how you can do it in a way that you feel good about and don't feel will turn people off. For myself I won't be putting up bandit signs, and I'll only start mailing to people if I know their property is empty or they are an out of state owner. Mostly I'm just spreading the word to as many people I know as possible letting them know that I'm interested in real estate. As I keep putting it out there in conversation I keep connecting with more folks and even the ones that think I'm crazy often have a lead that surfaces. It amazes me how often when I mention my real estate ambitions in passing it leads to a "oh, you should talk to so and so, or "oh, my friend has this place he's looking to sell"...

Anyhow, I hear you about the small town thing, but I wouldn't let it slow you down. Integrity, humility, enthusiasm, and a smile can go a long way.

Jon Huber · Answer

@Crysta Balbontin You can "drive for dollars"... drive around, and find homes that you think home owners are not interested in keeping. Look for the signs: unmowed lawns, boarded up windows, newspapers piling up from vacancy, etc etc. Write down the addresses. Go to www.USA.com, and look them up, and give them a call. Maybe they are interested in selling, maybe they hang up on you. You'll never know unless you give it a shot.

Crysta Balbontin · Answer

Wow, thank you for the supporting words of encouragement! I really really appreciate it. The like-mindedness makes me even more motivated to KNOW that I can do this.

I've actually been conversing with local contractors/investors/homeowners in my area all day, and I think I will begin putting in small steps here and there! Every little bit of advice/encouragement really does help. Thank you.

@Dev Horn

Dev Horn · Answer

Hey @Crysta Balbontin when I read your original post, it sounded almost like a list of all the reasons you think you might fail.  That's a good list to know, but now that you know it, THROW IT AWAY.  Stop trying to defeat yourself before you even get started.

Change your inner dialogue to one that is supportive "This is a people business and I am excellent with people.  I will do WELL at this business...".

It takes time to create any new business and this one is no exception.  Just start putting small things in place over time and they'll add up to something meaningful.  It really doesn't matter what people think the first year you're doing it, but when they see you sticking to it in year 2, 3, 4, etc,, they will CERTAINLY take you seriously.  And if you are not in it for the long haul - you need to seriously evaluate your interest in this, because it will take time, money, and lots of hard work to succeed in this business.  But you CAN do it!

"Success isn't owned. It's leased, and payment is due every day." ~ J.J. Watt

Crysta Balbontin · Answer

I did come across that researching, that's an awesome idea!

Thank you @Jon Huber !

Risky business of wholesaling/marketing in small town and so hclose to home?

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