Wholesailing dropouts
I am just wondering why nearly all the local people in my general area that considered themselves "Wholesaler's" have not been active for a year or more (and there is a lot). Not the right models? to much Guru influence? Seems to be a high attrition rate. Maybe not the right path for a Newbie? Just typing out loud.
Wholesaling is real and one can make great money but its alot of work. And starting out one may not see results for 3 months or so, many drop out. Bad news is these people all prob made a bad name for us guys who follow through. I don't write a wholesale I wont buy, therefore my 30 or 45 days is close I buy it. If I dont think its a deal why would I try to sell it to someone else, who is possibly just starting and we all get a bad name. TO MANY GURU ON THIS SUBJECT. But it is real and does work just not in your sleep like some people say.
Correct, I believe it could not possibly be "set it and forget it". Marketing Budget for consistently being consistent with your mailings. Being an expert assessor of ARV and always being able to offer your client 70% of ARV. As well as solving problems for seller. Seems like a lot for little reward . I'd be in it for the education alone but my Mama always said I was a hard case.
Originally posted by @Stephen Dominick:
You got this topic right. I am a wholesaler in my local market and I started my learning the trade on July 1 2014. I closed on my first deal August 15 for $5k and then August 19 for $4700. Now not every wholesaler hits the market strong like this and that's why I believe that so many wholesalers, or people trying to become wholesalers, fall off and die to the trade. I'm a believer and I know for a fact the only reason I have been so successful is Gods hand in my business. The reia tha I am apart of here had a Christmas party last Tuesday and I was awarded the rookie of the year because my " at bat" percentage has been crazy good. So to get back on topic. Wholesaling is the easiest way to ge into REI but not the easiest niche to do. Anything can work if you stick to it and don't let mishaps pull you off course cuz there will always be mishaps. By the end of 14 I will have 15 closings done with 5 just this month. I am living proof that this business works but you have to do just that, WORK! 2015 is gonna be a good year for me so I hope it will Ben just as good for you guys too. Merry Christmas.
That is fantastic success. I really would like to connect with someone like yourself. I also believe that It could be successful in my area of Pa. The market has hit us pretty hard around hear. If you don't mind me asking, do you use direct marketing and what type, Yellow letters etc. and who is your target for your mailings? Thanks again and keep up the great work.
3 months? It took me 3 years to close my first deal but I was working 60 hour weeks back then and didn't really hit it hard. Most if not all the guys I knew wholesaling are gone.
80% of wholesalers fail and that's the sad truth. I think that a lot of the guru's try to push it as this get rich quick, no effort, make 5k in the first 30 days type of thing.
If the guru's were to say "make money in 90 days with loads of hard work and dealing with people who are upset that they received a postcard from you" I don't think anyone would buy their course.
@JPaul Mills Those are great stats my man! Definitely motivating. Question...Did you drop everything you had and dive in full-time?
Anyway... @Stephen Dominick
My first mailing campaign went out 9/26 and have also done some bandit signs on the weekends. I haven't closed a deal yet but I had two under contract (one was an option to allow me to market it though). My numbers didn't quite add up as I originally thought but I definitely learned why. So I'm still working for my first deal... and I must admit, It is not easy at all.
The way I see it though, REI (including wholesaling) should be treated like any other profession... i.e. it takes time and money to learn to do it right (consistently and systematically). However, instead of the conventional schooling that other professions require, wholesaling, I believe takes massive action for real-life experience to get it down-packed.
I know I learn something new after each phone call I get or make, and even more with each property I get under contract. And then on top of that, I make a few new connections every week through networking. Although I haven't closed a deal yet, I feel very good about the progress I am making and extremely confident that I'll make something happen sooner or later.
So to answer your question... as long as newbies keep coming in thinking it's a quick and easy money maker, there'll be tons of turnover. Because this is a business and should be treated as one. I truly believe that most of these "wholesalers" are really just bird-dogs being bred by all the gurus, mentors, and coaches out there splitting profits with them. Unless they have a long-standing business mentality to build on that on their own, they won't last.
There is a high attrition rate in general for real estate investing. Unfortunately, TV (flipping shows) influence many people's decision to enter real estate and they jump in with both feet and a lot of initial enthusiasm until the reality sets in that making a living in investing requires effort, study, dedication, perseverance and a very strong reason to succeed. Too many get in on a whim and they last a few months to a year.
Originally posted by @Luis Lopez:
@JPaul Mills Those are great stats my man! Definitely motivating. Question...Did you drop everything you had and dive in full-time?
I too worked a Full Time Job until the last week of October. I sold cars and that is a 55-60hr work week and I did this around that clock. I have been so successful at Wholesaling that I don't sell cars any longer and I have dinner with my family every night and no more Saturdays and in fact my oldest child had a choir recital last night and I was able to make that. I'll never go back in the car business again cuz I was missing so much of the important things in my kids lives and with my wife.
@Wayne Woodson "If the guru's were to say "make money in 90 days with loads of hard work and dealing with people who are upset that they received a postcard from you" I don't think anyone would buy their course."
Wayne, you could not have said that any better :-)
I think the fact that it is sold by the gurus as something that's easy, can be done with no money and little effort, and simultaneously as your regular job attracts a lot of garbage. It mostly attracts the desperate, poor, ignorant, and greedy amateurs of real estate investing. These people simply cannot hang in there for the long haul.
Very often, I noticed that the work you do today will not reward you or your bank account for another three or four months, if not longer. This lengthy sales cycle is very hard to stomach and discourages many from sticking it out.
Last but not least, I have personally met many people who call themselves wholesalers but do not act or behave like a wholesaler or do the things successful wholesalers need to do. I recall one instance in particular where the young woman told me she was a wholesaler, but when I asked how many deals she had closed or properties she has under contract, her response was "well, I'm still trying to learn more things and whatnot. I don't feel I'm ready yet to jump in just yet."
This woman is no wholesaler. But she calls herself one? pppffffftttt... Gimme a break
This post is my biggest fear with getting into REI. I feel very passionate about And have been doing tons of planning and gaining tons of education since October. Our first direct mail campaign will be going out January 5th and our website will be going live on December 25th. I have schedules and long-term goals and am starting to build a decent network and I feel READY and I feel EXCITED but don't they all at the beginning? I am very much so hoping that by busting my a$$ and sticking to my schedules, we can be part of the 20% that stick with it but man.... those odds don't sound greAt to me.
I know that wholesaling is no "get rich quick" scheme and we've budgeted for such. I am serious about this because At my 9-5, after taxes and childcare is deducted, I bring home a measely $16K annually and I am living to work without enjoying what I do. It is too much and I am ready for a change.
@Jade Davis well best of luck to you. just do it and just stick with it. :) Alec Baldwin said it best in Glen Gary, Glen Ross..."they're sitting out there waiting to give you their money. Are you going to take it? Are you man enough to take it?" LOL - gotta love that movie.
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In many markets, i don't think "wholesaling" is viable, because the cost to get leads and the number of leads it takes to get a "deal" result in a very high marketing cost per deal.
And the gurus routinely come here to Dallas and put up slides showing $40K wholesale deals. That's beyond hopeful. You might find that assignment fee in Los Angeles; certainly not here in Dallas (or 1,000 other markets).
So people get started in this business with expectations that were created by hucksters and info-marketers - not at all based in reality. That's what really fuels the failure rate - and even the major gurus will admit the failure rate is closer to 90% if not higher.
I really think the term "wholesaler" is super limiting. My profile video here on BP goes into why I think wholesaling is effectively a non-profit strategy in 2014-15, and what I recommend that you should do to re-position yourself as a "solution provider" with more than one way to make $$.
