New to WholeSaling - Guidance Appreciated (Michigan)
Member since 2022 · 17 posts · 5 votes
New to WholeSaling - Guidance Appreciated (Michigan)
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votesWhy does everyone want to spend money chasing strangers – and ignore their own personal network?
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.
Please send us any feedback via email, as we do not use the DM feature here.
Also, if you like our response, please don’t be shy about giving us a vote😊
Logical Property Management4.9465 Reviews
5 Replies
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
You don't have to wholesale your way into real estate, you're taking pennies instead of picking up large checks. Do everything to find the wholesale deal and partner on it with a investor with cash.
- 3yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Why does everyone want to spend money chasing strangers – and ignore their own personal network?
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%3FPer 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%20yearSo, 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.
Please send us any feedback via email, as we do not use the DM feature here.
Also, if you like our response, please don’t be shy about giving us a vote😊
Logical Property Management4.9465 Reviews - 3yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
Real estate wholesaling is a strategy in which a wholesaler obtains a contract on a property with its seller, and in turn sells the contract to an investor. Wholesalers start by looking for a discounted property to put under contract.
Wholesalers will often look for distressed properties priced below market value. These properties usually need quite a bit of work, and the owner is often motivated to sell and isn’t interested in working with a real estate agent.
From there, the wholesaler will enter into a wholesale real estate contract and then reassign the contract to an end buyer for a higher price. This is known as a wholesale fee and usually costs 5% – 10% of the total property price.
If you’re interested in becoming a real estate investor but are worried you don’t have enough capital, wholesaling real estate may be a good option for you.Pros And Cons Of Wholesaling Real Estate
Just like any other real estate investing strategy, there are pros and cons to wholesaling. Let’s look at some of the biggest benefits and drawbacks you need to know about.
Pros
It’s a good entry point to getting started as a real estate investor.
You have the opportunity to close real estate deals in any market, regardless of proximity.
Very little capital is required to begin, so it’s a low-risk way to get started as an investor.
There’s an opportunity to make a large profit over a short period of time.
Cons
Wholesaling offers a lower profit margin compared to other real estate investments, like flipping.
You’ll have to do quite a bit of research to find the right properties and cash buyers.
It will take time to be successful and start earning a profit as a wholesaler.
There’s unpredictability, as profit will depend on the availability of the market.
You’ll rely on property owners feeling comfortable with the wholesale real estate strategy and investors who are open to buying.
Wholesaling Real Estate Vs. Flipping Houses
It’s important to understand that wholesaling is not the same thing as flipping houses. Both strategies involve purchasing distressed homes and selling them for a profit, but they go about it in different ways.
When you flip a house, you purchase a property that needs some work and spend time fixing it up. Once you’ve increased the value of the home, you turn around and sell it for a profit.
With wholesaling, you’re still buying a distressed property, but you’re not doing the work to fix it up yourself. Instead, you’re charging a wholesale fee to the final buyer. As a result, you’ll get less money in a wholesale deal, but you won’t invest your resources into the house.All the best!
NETWORTH BUILDERS5237 Reviews - Member since 2022 · 17 posts · 5 votes3y
Thank you Wale Lawal!! Much appreciated insights!!
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