Can I become a millionaire as a wholesaler?
Member since 2014 · 78 posts · 23 votes
How realistic is it to met 1 million a year as a wholesaler? I was listening to a wholesaling podcast and the guy said he makes six figures a month. Sorry if this is a non-PC question lol, the reason I'm asking is because I' want to raise capital for another real estate venture that I hope to pursue in the future ! Thank you to anyone who answers, I patiently await your responses :)
Lots of BS artists out there flaunting inflated numbers. I could tell you I make six figures a month too. Heck, anyone can 'say' they make six figures a month. However, the only thing that counts is how much I burn and if I'm burning six figures a month as well, then I'm putting zero figures in the bank which is probably what Mr. podcast is really doing, if anything at all other than trying to get you to send him five figures for his BS coaching program so he can pay his mortgage and leases on his German import automobiles.
Can you make $1M/year? Yeah. I have personal friends who did $10M on one transaction. Is it likely you will do that? Probably not, but I'm not you, I don't know you and I have no idea what drives you.
Can you become a millionaire as a wholesaler (generally speaking)? Yeah, but it will be a little challenging doing it only with wholesaling. I suggest keeping a few along the way. It will help your highly taxable situation (earned income) and rentals give you a place to park cash other than the local lender. Plus, they are a great place to hedge inflation and you may, just maybe, might get a little kick to your net worth in appreciation. Then, when you're banking 5 figures a month in rent and you don't feel like wholesaling that month, you don't have to. Because, wholesaling is a job, just like bagging groceries. If you don't show up to bag the groceries, you don't get a pay check for that day.
Lots of BS artists out there flaunting inflated numbers. I could tell you I make six figures a month too. Heck, anyone can 'say' they make six figures a month. However, the only thing that counts is how much I burn and if I'm burning six figures a month as well, then I'm putting zero figures in the bank which is probably what Mr. podcast is really doing, if anything at all other than trying to get you to send him five figures for his BS coaching program so he can pay his mortgage and leases on his German import automobiles.
Can you make $1M/year? Yeah. I have personal friends who did $10M on one transaction. Is it likely you will do that? Probably not, but I'm not you, I don't know you and I have no idea what drives you.
Can you become a millionaire as a wholesaler (generally speaking)? Yeah, but it will be a little challenging doing it only with wholesaling. I suggest keeping a few along the way. It will help your highly taxable situation (earned income) and rentals give you a place to park cash other than the local lender. Plus, they are a great place to hedge inflation and you may, just maybe, might get a little kick to your net worth in appreciation. Then, when you're banking 5 figures a month in rent and you don't feel like wholesaling that month, you don't have to. Because, wholesaling is a job, just like bagging groceries. If you don't show up to bag the groceries, you don't get a pay check for that day.
Lots of BS artists out there flaunting inflated numbers. I could tell you I make six figures a month too. Heck, anyone can 'say' they make six figures a month. However, the only thing that counts is how much I burn and if I'm burning six figures a month as well, then I'm putting zero figures in the bank which is probably what Mr. podcast is really doing, if anything at all other than trying to get you to send him five figures for his BS coaching program so he can pay his mortgage and leases on his German import automobiles.
Can you make $1M/year? Yeah. I have personal friends who did $10M on one transaction. Is it likely you will do that? Probably not, but I'm not you, I don't know you and I have no idea what drives you.
Can you become a millionaire as a wholesaler (generally speaking)? Yeah, but it will be a little challenging doing it only with wholesaling. I suggest keeping a few along the way. It will help your highly taxable situation (earned income) and rentals give you a place to park cash other than the local lender. Plus, they are a great place to hedge inflation and you may, just maybe, might get a little kick to your net worth in appreciation. Then, when you're banking 5 figures a month in rent and you don't feel like wholesaling that month, you don't have to. Because, wholesaling is a job, just like bagging groceries. If you don't show up to bag the groceries, you don't get a pay check for that day.
Thank you very much for taking the time to write out such a thoughtul and informative post! What you are saying makes complete sense, I mean I have definitely wondered why he is charging so much for his training courses if he making millions and millions effortlessly through wholesaling.!
From my understanding, it seems as though it can be lucrative but it's not passive at all, unlike traditional forms of real estate investing can be
Sure. Anything is possible. It would mean two things though:
1 - You have enough properties to wholesale to reach that million
2 - You have a buyers list that cumulitively has at least a million in buying dollars.
OK, actually...
3 - Numbers 1 & 2, must match at the same time.
....but yes, it is possible.
Not very likely in residential deals, about as close to impossible as you can get, highly improbable as there aren't many areas that have the inventory to support that if you're dealing honestly, ethically and legally.......but then, you didn't mention that.
I took Aaron's comment as to his friends being several made 10M on one deal and obviously it wasn't a house, even in Cali!
Most wholesale deals will follow a profit margin mush like a Realtor's fee or less, get more than that and you're adding more value to the deal, if you didn't add more value, then you're probably a crook. You'd understand that if you had a better knowledge of the legal and ethical aspects of value in any business transaction, not just RE.
Had to laugh and shake my head.....some slickster makes a claim of earning big bucks and then we wonder why his coaching program costs so much........dah....
@Bill Gulley If you had a large enough list of buyers, and enough properties to fill their orders, I guess it is possible to do with SFH...but, it would involve one heck of a lot more work than just owning them yourself.
Like you said, doing this with commercial properties is a more likely scenario.
And if the wind behind you was strong enough, when you needed it to be, you'd not need to buy gasoline for your truck. LOL :)
I would have to wholesale 334 houses a year to get to a million. Which means I'd have to hire several more people too, because there is no way I could handle that all by my self. So most of that million would go toward paying my new employees.
And if the wind behind you was strong enough, when you needed it to be, you'd not need to buy gasoline for your truck. LOL :)
I want to hire all the "ifs" in the world. Also, I know of a few people that would qualify as that "strong wind" you mentioned. LOL
Not very likely in residential deals, about as close to impossible as you can get, highly improbable as there aren't many areas that have the inventory to support that if you're dealing honestly, ethically and legally.......but then, you didn't mention that.
I took Aaron's comment as to his friends being several made 10M on one deal and obviously it wasn't a house, even in Cali!
A building and the air rights of the two neighboring buildings - in NYC. LOL
So yeah, it can be done, but like you said, not likely in residential - unless you're making offers on residential towers.
Can wholesaling make you a lot of money? - Yes
Will wholesaling make you rich? - No
There is a difference between the two.
From my understanding, it seems as though it can be lucrative but it's not passive at all, unlike traditional forms of real estate investing can be
You can make anything passive by automation and delegation.
How realistic is it to met 1 million a year as a wholesaler? I was listening to a wholesaling podcast and the guy said he makes six figures a month. Sorry if this is a non-PC question lol, the reason I'm asking is because I' want to raise capital for another real estate venture that I hope to pursue in the future ! Thank you to anyone who answers, I patiently await your responses :)
I didn't read any of the other replies save Aaron's so forgive me if I repeat what's already been said.
Here's my opinion:
Can you become a millionaire by wholesaling? Of course. Do a few great deals and you could make millions. Then roll those millions into holding revenue-... er... profit-generating properties.
Maybe some wholesalers can school me on this, but as far as I know, wholesaling is not sustainable income. If something happens to the investor, the income stops immediately and his or her family will have to live off past earnings until they run out. No good.
But I assume that most wholesalers are smart and they turn that immediate income into some type of passive income (owning rentals, carrying notes, mutual funds, etc.).
I am a buy and hold guy with five kids and a near ending military career. Wholesaling isn't attractive to me unless the deal can sustain me and my family for at least two years. Now, I'm taking it to the extreme, but however, the deal has to be worth it and purposeful. (This statement is arguable and totally my point of view.)
I have a day job, though. So I don't have to wholesale to sustain my personal living. I would most likely use wholesale methods to raise capital for buying rental property. If I can find several rentals with good spreads, I could pull in $2k, $4k, $11k, $15k and beyond a month. Then I'll never have to scramble to find deals or work for somebody else.
If you are looking for passive income that can be passed down to your kids and grand kids, I suggest you buy and hold, and find props with large enough monthly spreads so that PM fees don't massacre you.
SIDE NOTE:
If you have a day job, you could take about 75% of your rental profit and use that towards paying off the note on your first and second rentals (this is why I look for cheap properties... easy to pay off). Just snowball paying off debt. Next thing you know you'll own four or five properties free and clear in no time.
I'm not going to stop working (day job) until my rental income per month reaches a certain level... then I might move into wholesaling here and there to boost my existing income.
I agree that wholesaling for most is not passive, not even for me. However we have built enough capital wholesaling that now we are able to fox amd flip a few houses at a time at $20k plus profit each. Not that fix and flipping is passive, but I like it a heck of a lot more then sitting behind a desk. The idea is to build a rental portfolio and live off of that, but I had to build up my capital somehow and the day job wasn't cutting it.
Not very likely in residential deals, about as close to impossible as you can get, highly improbable as there aren't many areas that have the inventory to support that if you're dealing honestly, ethically and legally.......but then, you didn't mention that.
I took Aaron's comment as to his friends being several made 10M on one deal and obviously it wasn't a house, even in Cali!
A building and the air rights of the two neighboring buildings - in NYC. LOL
So yeah, it can be done, but like you said, not likely in residential - unless you're making offers on residential towers.
Wow, so he really made that wholesaling? That's crazy! Did the buyer even make a profit? Lol
I agree that wholesaling for most is not passive, not even for me. However we have built enough capital wholesaling that now we are able to fox amd flip a few houses at a time at $20k plus profit each. Not that fix and flipping is passive, but I like it a heck of a lot more then sitting behind a desk. The idea is to build a rental portfolio and live off of that, but I had to build up my capital somehow and the day job wasn't cutting it.
Hmmm, thank you for the advice, that definitely makes sense! I definitely want to buy and hold, but I haven't built up enough credit yet For the banks to take me seriously yet :/ do you borrow from banks or get private investors? It seems like private money would almost be too expensive to even be worth it
Wow, so he really made that wholesaling? That's crazy! Did the buyer even make a profit? Lol
The buyer was a Chinese development company. I don't know what their intentions are with the property, but I've been shown a few drawings my friend had and they were of a luxury condo tower. The air rights were needed to get the extra floors. I think it was 60 or so high.
As for your next post you wrote, I bought 8 rentals this year and never stepped foot in a bank. You need to study a little creative financing. Seller carry back is how I got most of my rentals. It's not difficult, but it takes understanding of the numbers involved in holding and managing rentals long term.
Wow, so he really made that wholesaling? That's crazy! Did the buyer even make a profit? Lol
The buyer was a Chinese development company. I don't know what their intentions are with the property, but I've been shown a few drawings my friend had and they were of a luxury condo tower. The air rights were needed to get the extra floors. I think it was 60 or so high.
As for your next post you wrote, I bought 8 rentals this year and never stepped foot in a bank. You need to study a little creative financing. Seller carry back is how I got most of my rentals. It's not difficult, but it takes understanding of the numbers involved in holding and managing rentals long term.
Very interesting, thanks again for your post - were the rentals you acquired single family homes or multifamily apartment buildings?
Very interesting, thanks again for your post - were the rentals you acquired single family homes or multifamily apartment buildings?
2 on a lot, SFR, 6 year old townhouse, 2 on a lot, SFR
The other three were two SFR and another townhouse, but I decided to sell them all retail.
Of the properties I kept, my financing looks like this;
2 on a lot - seller financed
2 on a lot - subject to the seller's loans
townhouse - private loan, but it is worth $215K, I owe $100K and I get $1,595 in rent (that is more of an equity capture play than a cash flow move - I can hold it for a year, then 1031 into something better)
SFR - hard money loan at 9.9%, 5 years I/O.
The three that I sold, I paid cash for one and used my private lender to acquire the other two. I rehabbed one for full retail sale. The one I paid cash for I fixed up to rent out, but didn't like the tenant base so I sold it at 90% of retail value to a landlord. The last one, I did nothing to it. I sold it 30 days after I closed to the tenant who had been living there for 30 years. He bought it cash, as-is.
The lesson in all of this is be flexible in your dealings.
Here's the deal about wholesaling only business versus being a transaction engineer
wholesaling only means that you're looking for C and D neighborhoods with a huge amount of work in order to be able to buy a $.65 times ARV
Getting a buyers list together were you know what they want to buy and how much they want to pay and where is really important wholesaling which most wholesalers don't do
If you did that you could go hunt for them and maybe the cash buyers would buy a few at a time
Now I refer my marketing not to be we buy houses, any condition, for cash fast
But instead...
Landlords do you have problem tenants not paying fast?
Homesellers is your agent not performing?
Do you have no equity in your home but you need to sell?
Is there a divorce and you have no equity?
Did you inherit a house that needs work?
We offer unique solutions that include lease purchase where you can make more money by leasing out the property and getting cashed out on the road
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Wholesaling only model, without doing a cash or terms presentation to the seller, I think is not the best model , especially for rookies
The nice thing about subject to, wraps, and lease options is you only need a willing buyer and willing seller to get the deal to work; no banks, no credit, no Hardmoney or private money, no contractors, and you make the money fast, like in 30 to 60 days.
If you master seller financing, helping the sellers sell on terms, you'll make money faster and when wholesale deal comes by, you can write up the contract and try to sell it, and if you fail, your cash flow still okay.
Your marketing approach is genius! Thanks so
much for this post.
Thanks for starting this topic. Very interesting thread. I'm just getting started, but hope to use a mix of buy and hold, with wholesaling and an occasional flip to create funds to purchase more buy and holds. Since joining BP, I get the impression there are a number of folks doing quite well just with wholesaling, but the large majority appear to use it as I do to create a funding stream for other investments, as well as a way to identify solid leads.
In response to the OP:
Maybe in some mathematic scenario in which all the stars aligned perfectly... maybe you'd make a million "wholesaling". But to make a million in real estate you need to be a real estate INVESTOR. You need to BUY STUFF and OWN STUFF. Now, can wholesaling help you get the capital to buy stuff and own stuff? Yes it can. But I've seen people make a huge score on wholesaling and go out and buy some jet skis or some other crap and within months they weren't even playing the game anymore. You need to get your focus on progression and that ALWAYS means taking something you have today and investing it in the FUTURE. Moving from wholesaling to rehabbing (which is the REAL "REI" business, IMHO), to buy and hold SFR, to multi-family, etc. etc. You can also get your license and play the entire spectrum of buying, listing, and selling, etc. If you want a million plus. set your sights on building a real estate BUSINESS, not wholesaling. Wholesaling is "entry level". It's a fancy name for bird dogging. It's not real estate INVESTING. That's my 2 cents. Set your sight on a BIG target to reach a big objective. Wholesaling may be part of the way you get there, but it will not be THE way that you get there.
"Life isn't about finding yourself. It's about creating yourself." ~ George Bernard Shaw