How many deals does the average wholesaler have on contract?

Question

Hey all,

I attended my first REI meeting earlier this month, and I heard a wholesaler casually mention that they had "upwards of 50+ contracts locked up" - this is verbatim. I also remember when talking to my closing agent, he said that he had a client that filed the paperwork for over 50 contracts - and my closing agent confided that he wasn't sure how many that client would actually close.

From a numbers perspective, this seems kind of crazy. I know that wholesaling is a numbers game, and the number of properties that you CAN put under contract is directly correlated to the strength of your buyer's list. But from a beginner's perspective, thinking about becoming a wholesaler with 50+ feels like staring up at a cliff.

So for all of the experienced wholesalers out there:

• When you look at your pipeline, how many deals do you have on average? 
• What is the average percent of deals that succeed and fail?
• For earnest money, whats your standard percent of the sales price

Charles Kao · Answer

@Ken Yu

You should not be putting any money down as an earnest money deposit so the only money so you should not be losing money in bringing a deal under contract except for the time cost.  I honestly think bringing 50 houses under contract quickly would be a recipe for disaster because it would be the classic "grow too fast and fail" effect.  Are you wholesaling fulltime or part time and do you have anybody to assist.  On my end I am just the back end sales guy, so I do not do the marketing.  I am the face that the sellers associate with the marketing campaign so I like to say I am the "talent," but I will say it does help to break up the tasks.

Ken Yu · Answer

@Charles Kao

Hey Charles - no money down deals always seems too good to be true. Of the handful of deals I've done, I've only had one for no money down - well, just for a dollar - which is still very rare.

And yeah, I created this discussion trying to see if anybody else thought that 50 houses under contract seemed way too big for the average investor to handle. I'm full time, and a part of a two man operation.

Here's the thing: we've only got 12 properties in our ENTIRE PIPELINE. But as a disclaimer, I'm still working on my first deal. So I'd really love any feedback about my operations. I'll send you a message in private, Charles! Let's talk some more.

Ken Yu · Answer

Yeah @Charles Kao, asking about how much another wholesaler in my market is making is a great thing to ask. Thanks for the advice.

It sounds like you're more thorough with the deals you find, which is reassuring.  The shotgun method of getting 50 houses under contract just seemed like a great way to lose money, but I haven't tried it, so I don't have the authority to judge.