I'm working on my business plan for wholesaling; specifically the financial model section. Here is where all the fancy what-if projections go. However, I need some help. I'm specifically looking to wholesale in the LA area of southern CA. What I am looking for is just some basic ballpark estimates I can plug into the financial model section.
1. As a newbie, what kind of profit am I looking at for each deal in my area? $2K, $5K, $10K? I understand that part of this is how good of a deal I can provide, so let's go with an average here.
2. I absolutely plan on keeping track of all my expenses through GNUCash (think open source Quickbooks). Can someone share their numbers on business expenses or categories? An expense that I would really be interested in knowing is how much does it cost to get a real estate license in CA and the costs to maintain it.
As always, any insight that is provided is very appreciated.
Hi Carlos, Of all the venues available to you, may I ask why you chose to start with wholesaling?
Do you have a real estate license?
Welcome build the foundation below.
Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook
Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.
Couple good reads
- 9 Reasons You Couldn't Find A Buyer For Your Wholesale Deal
- Don't Start Wholesaling Until You Read This: Wholesale Advice from a Fix and Flipper
- How to Start Wholesaling: Getting Past The Education and Into the Field
Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over
@Carlos O. I am new to wholesaling. I'm working on building my motivated sellers list right now. My list will be compiled by the end of this month. I'm dropping 2500 postcards to start out with and will be mailing quarterly for the entire year. I will be following up to warm leads with a letter and calendar before I convert them back to postcards. The expenses I have incurred include:
- Purchasing Motivated Seller List
- Purchasing Marketing material (postcards and calendars)
- Business Cards
- Lunch with my RE Attorney
- Market Research
- LLC formation
- Personal Labor (I think I'm worth at least $25/hr) :-)
Your expenses will vary but I hope this helps get you started.
See ya round BP!
@Carlos O. You projects in your business plan are just that and you can/should adjust them as things start rolling for you. I like to lowball my projections, so go with low numbers. 2K for a deal @ 12 deals a year. Really low right? Good. Now try to meet that projection. Then beat it. Next year, re-write your business plan based on your numbers for your first year. Try to meet it, then beat it.
Your business plan is not just a bunch of hopes and wishes for the future, it can also be a motivational tool.
Thanks Account Closed Excellent idea. I'm hoping to have solid numbers, but if I can't really get that, then I would have to start low like you said and just try to get better every year instead of comparing myself against other wholesalers. It would be nice to have a benchmark though.
@Eric H. where did you purchase a motivated sellers list, and what kind of target list is it? what are you going to be doing with your post cards? seems like you have a hefty marketing budget just to start out. I would be interested in hearing your results. Thanks
@Account Closed For the list I actually tried something a little different. I hired a VA from ODesk and had her do research on properties via my county's websites. I told her my criteria and made a video to show her exactly where to locate the information. She is still working on compiling the list for me. I paid her $300 to look through over 35,000 citation records. Other qualifying criteria I will be looking for include assessed value, absentee owner, and equity. I will keep you informed about the success (or epic fail) of the list. I will hit this list quarterly for the entire year, following up to warm leads with a letter and calendar. My theory behind the calendar is my business will continually be in front of the client. It's a small tear-off calendar with a magnet and sticker on the back so the client can put it on their refrigerator or their desk. If this list proves to be an epic fail, I have looked into AgentPro 247 and yellowletters.com as alternatives.
Hope this helps!
@Carlos O. Looks like 4 years has gone by. How did your plan work out compared to your actual experiences?