Wholesaling in California / San Diego

Wholesaling in California / San Diego

Real Estate Investor · Encinitas, CA · Member since 2013 · 25 posts · 7 votes

I started wholesaling locally in San Diego back in June with the help of a friend of a friend that wholesales in AZ. We are not in contact anymore.

I am sending out direct mail to absentee owners, 1600 letters every 60 days. I found only one motivated seller and one owner that made two appointments, so i could look and the property, and never showed up. The one that let me visit the property told me on a second call to "hurry and up" because he is going to list with an agent in two days. I explained to him why going with me would be a better choice but he did not really care. On a third call i gave him the offer and he said "thank you ill let you know" and i hung up. The property was listed on the MLS a few days after.

That was almost 60 days ago, since then no more motivated sellers.

Here are my questions:

Has anyone in CA or San Diego experienced this lack of motivated sellers?

Realistically how long using only leads purchased on line, will take me to achieve my short term goal of wholesaling at least one property a month?

Any help is highly appreciated.

Thank you.

0Reply
66 views

Most Popular Reply

Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
13y

Its a numbers game. You need to mail, a lot.

Currently a large amount of people are using the same method as you. I think mailing 5k per month should net a deal. Also the number will get lower the better you are.

I honestly don't believe wholesaling is the best option for most sellers, it is a small percentage that will benefit from it in this market. So, you need volume and consistency to reach them.

It's all about volume, follow up and striking when the iron is hot. You hesitate for just one second and you've missed a deal.

See this reply in the discussion

29 Replies

Jump to latestLatest
  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Its a numbers game. You need to mail, a lot.

    Currently a large amount of people are using the same method as you. I think mailing 5k per month should net a deal. Also the number will get lower the better you are.

    I honestly don't believe wholesaling is the best option for most sellers, it is a small percentage that will benefit from it in this market. So, you need volume and consistency to reach them.

    It's all about volume, follow up and striking when the iron is hot. You hesitate for just one second and you've missed a deal.

  • Real Estate Investor · Encinitas, CA · Member since 2013 · 25 posts · 7 votes
    13y

    Tim, thank you for your reply.

    Five thousand letters per month is definitely beyond of my budget right now, 1600 is my max. I was planning on sticking with for 7 or 8 months.

    Do you think my budget is too low for wholesale ? Should i save this money and invest in rehab instead?

    What about wholesaling in other less competitive markets?

    Im still looking forward to that lunch meeting.

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y

    1600 letters per month is certainly a great start. I would not quit, but would advise to possibly tweak your verbiage (ask others what they write in their letters) and practice speaking to a motivated seller. Your low success rate may be due to a lack of experience. Keep plugging away, don't give up.

  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    13y

    Yes, San Diego is a VERY tough market, like all of CA actually. The problem is, the people that called you were not actually motivated sellers - they were just sellers who thought you might give them a faster path to to the same pile of money. A real motivated seller:

    1) Is in a hurry for some reason (relo/moving, divorce, financial probs, etc.)

    2) Has a distressed property that needs $$$ in repairs that they don't have

    3) Needs CASH, fast.

    (also, (4) Has EQUITY)....

    Don't try to build your investing business by working with people that don't need you (i.e., those guys). Instead, make sure your motivated seller messaging is DIALED IN and just POUND on your target list(s) every month.

    If a seller has a decent house and is not really motivated, they would be BETTER OFF selling via a broker & the MLS. RE Investing is not about low-balling sellers, it's about offering a cash solution to people who are in a bit of a bind regarding their real estate.

  • Real Estate Investor · Encinitas, CA · Member since 2013 · 25 posts · 7 votes
    13y

    Dev thank you for your input. I agree with you.

    May i ask you another question?

    How do you think i can better zero in on motivated sellers?

    Here is my lead criteria, Absentee owner with 50% + equity, in state and out, single family homes in blue collar desired areas of San Diego.

    I am also driving for dollars and creating a website.

    I am asking this questions because i want to make sure i am making the right choice. If 1600 letters every 2 months wont get me a deal in CA, then i have to invest in something different the wholesale or in a different market. Its has to make sense from a business stand point.

  • Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    13y

    Leonardo,

    Most sellers want to know how much money you are putting in their pocket. (Give the seller $500 to $1000 and most sellers will get motivated)

    Joe Gore

  • Real Estate Investor · Encinitas, CA · Member since 2013 · 25 posts · 7 votes
    13y

    Will, I am certainly not giving up, that is not in my vocabulary.

    I understand i have little experience and i need more time to learn, ill keep practicing.

    Thank you for the advice, i will work those areas.

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Mail what you can, just do it consistently and KEEP A DATABASE of the leads that do come in so you can follow up.

    Just be sure you structure this like a business and not a hobby. The "I'll invest, once I get results" mindset is why so many start and quit when it comes to wholesaling.

    Now I'm not telling you to max out credit cards, spend what you can afford to spend and be consistent. You'll get it.

  • Real Estate Investor · Encinitas, CA · Member since 2013 · 25 posts · 7 votes
    13y

    Thank you Tim. Ill keep at it.

  • Investor · Richmond, VA · Member since 2013 · 195 posts · 27 votes
    13y

    Hi Leonardo,

    One thing you hit on was creating a website. I am new as well (so take it for what its worth) however leads are one of the only things I have going for me. I'm not saying I have NOTHING else but I'm definitely not a pro or veteran (I learned about how to wholesale almost exclusively thru BiggerPockets and Youtube). I created my site WHILE I was in the learning process and as a result was able to get a deal under contract within the first months without a mentor. It fell thru but it was good practice.
    Not everybody knows how to make a website but it doesn't have to be expensive. Hell, I'd make one for you if you need it. Either way, to me if you diversify your marketing (i.e. sending letters, having a site, networking on here, craigslist,etc), then you don't need to be dependant on just 1 form of marketing.

    @Dev I could only imagine how successful your "We Buy Houses" site is and the leads it brings. I'm sure that's been an excellent tool for you

  • Specialist · Novato, CA · Member since 2012 · 190 posts · 57 votes
    13y
    Tim G. 5k per month sounds exhausting. I don't know if I can handle that many tire kickers. But I do want more volume...
  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Lets just reverse engineer it.

    takes 25 solid leads to get a deal.

    .05-1% response rate in this market.

    So you need 2500-5000 mailers sent to get a deal.

    The more deals you want, just market more.

    I also really like @Alex Harris post, he is spot on and that is advice I need to follow as well. Thanks!

  • San Diego, CA · Member since 2013 · 16 posts · 2 votes
    13y
    Leonardo, you said you were sending out a wave of letters every 60 days. Then Tim said every month. Is there a preferred time period between sending out letters that's not considered smothering potential sellers? (Ex. Every 2 weeks vs once a month) Thank you for any input.
  • San Diego, CA · Member since 2013 · 16 posts · 2 votes
    13y
    Leonardo, you said you were sending out a wave of letters every 60 days. Then Tim said every month. Is there a preferred time period between sending out letters that's not considered smothering potential sellers? (Ex. Every 2 weeks vs once a month) Thank you for any input.
  • Real Estate Investor · Encinitas, CA · Member since 2013 · 25 posts · 7 votes
    13y

    Hi Cody,

    I have asked that question before, the only one who answered me recommended to mail the same potential seller every 60 days.

    I am currently working with a lead list containing 1600 names. Every week i send out automatically 250 letters, that means i will cycle trough the list once every 60 days, give or take.

    This way i am not swamped with twenty callers in one week and no calls for the next fifty days. I have received on average two calls per week that keeps me working constantly.

    I will be switching between letters and post cards to keep things more interesting and to keep cost down.

    Hope it helps.

  • San Diego, CA · Member since 2013 · 16 posts · 2 votes
    13y

    Thanks Leonardo

  • San Jose, CA · Member since 2013 · 66 posts · 21 votes
    12y

    @Tim G. - Hi Tim. I'm trying to figure out what kind of marketing and budgeting I should do if I wanted to target a California market and I had a couple of questions based off your post.

    You mentioned that you get a .05-1% (also did you mean .5 or .05?) response rate in your market of California and that you require 2500-5000 mailers per deal. I was wondering if you were exclusively using Post Cards, Yellow Letters, Professional Letters, or some combination of the above.

    I've been led to believe reading other posters that .05-1% response rate is more typical of a Post Card only type campaign but generally with a far higher quality lead than a Yellow Letter just saying "I want to buy your house". I've also heard that Yellow letters can get 5-10% but that the quality of leads can be very poor.

    Have you tried Yellow Letters? What is your opinion on their effectiveness in California?

    Also you mention that it might take 25 solid leads to get a deal. Do you generally consider the .05-1% that respond to your materials solid leads or is it some smaller percentage of those responders?

    Thanks in advance!

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    12y

    1/2 of a percent is the average response rate. 1 out of 25 of those calls should be a deal.

    I use a variety of all methods but prefer post cards.

    Its just timing, that piece has to hit when they have a vacancy, a death or something. There needs to be a catalyst. It's about volume and timing.

  • San Diego, CA · Member since 2013 · 44 posts · 5 votes
    12y

    I also send out yellow letters in the San Diego area, a volume similar to yours, I can attest that it is a tough market.

    Of the 100's of calls I've gotten over 5 or 6 months, only 1 I almost closed on. I was so close on closing on a real rundown triplex for a good price- negotiated over a 2 month period, drove across San Diego multiple times to meet the seller and look at the property... in the end we agreed on a price and were ready to go through with the deal until the seller said "One last thing... I still need to ask my wife".

    You can imagine how the rest of the story goes...

    Most people that call me just want me to make an offer, and never want to name a price- they're not motivated. I agree with Dev, it's all about finding better leads. I'm trying to figure out how to do that myself.

    Been thinking about driving for dollars or walking the neighborhood, my mentor said his best results were from knocking on doors.

  • Architect · San Diego, CA · Member since 2013 · 244 posts · 101 votes
    12y

    San Diego is a crazy market and someone has to be very motivated to forego putting their place on the MLS. That being said message me if you find something!

  • Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y

    @Eric O'Brian,

    When a seller says to make an offer ask the seller what time can you visit the property, and once you visit the property make a cash offer.

    Joe Gore

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    12y
    Originally posted by @Colin L.:
    San Diego is a crazy market and someone has to be very motivated to forego putting their place on the MLS. That being said message me if you find something!

    Many people have an aversion to working with agents, to many of us they are no better than used car salesman. I do know many that are fantastic agents and I'm thankful my relatives have found ones like this but they are few and far between. There in lies another motivation to work "off market" to sell.

  • San Diego, CA · Member since 2013 · 44 posts · 5 votes
    12y
    Originally posted by @Account Closed:
    @Eric O'Brian,

    When a seller says to make an offer ask the seller what time can you visit the property, and once you visit the property make a cash offer.

    Joe Gore

    Joe,

    Is the reasoning so they can put a face to a name, and will remember me once they might decide to sell for a lower cash price?

    It always seems like they want full market price, and it wouldn't matter if I do meet them, but I am willing to try it.

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    12y
    Originally posted by @Eric O'Brian:
    Originally posted by @Account Closed:
    @Eric O'Brian,
    When a seller says to make an offer ask the seller what time can you visit the property, and once you visit the property make a cash offer.

    Joe Gore

    Joe,

    Is the reasoning so they can put a face to a name, and will remember me once they might decide to sell for a lower cash price?

    It always seems like they want full market price, and it wouldn't matter if I do meet them, but I am willing to try it.

    If they don't need to move it fast and can wait or afford to make repairs, fixing and selling at market price is their best option and don't be afraid to tell them that.

    Its a filtering process to find the motivated seller. You can't make them motivated.

  • Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    12y

    There are deals in San Diego for cash buyers.

    Joe Gore

Join the conversationCreate a free account to reply, vote on answers and follow this thread.