wholesaling as a business and not as a job, systems????
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Flipper/Rehabber 路 Sacramento, CA 路 Member since 2016 路 807 posts 路 815 votes
9yThat's awesome that you're thinking about turning it into a business instead of a job. I'm currently doing the same.
We have to break down the process into individual roles and slowly fill those roles. We have
1. Lead Manager: Takes calls, inputs information into podio, checks for motivation, sets appointments. Basically a secretary with good phone skills.
2. Aquisitions Manager: Goes on appointments, estimates rehab cost, negotiates price and gets contracts signed. This should be someone with great sales skills and knowledge of SFR flipping. Perhaps an RE agent, car salesman, contractor. You can pay them a salary + 10% net profit on all deals they get under contract.
3. Property Sales: Once you have a contract. This person opens escrow, contacts buyers, gets second contract signed and ensures the deal closes smoothly.
4. Marketing manager: This person executes your marketing plan every month and explores new marketing ideas to reach motivated sellers better.
In the beginning, we're going to be doing all of these things. But the first position I'd hire out is lead manager since we can't sit around taking calls all day instead of going to appointments. Then I would hire an Aquisitions "assistant" who would come with me to all appointments and get trained by me on how to fulfill that role. Once they are ready, they can upgrade to Aquisitions manager and fly solo.
The overall goal is to get to a position where we just have to oversee these positions, solve problems as they come up and track performance.
22 Replies
- Specialist 路 El Paso, TX 路 Member since 2016 路 105 posts 路 84 votes9y
Ive started partnering with another wholesaler. I like driving for dollars, she prefers bandit signs. We will split the work and deal 50/50. Better to work together as a team and cover more ground than compete against each other. 50% of a deal is better than having no deal and losing to your competition. There's JV agreements and Non disclosures out there too. Last thing you need is someone running off with your deals.
- Real Estate Investor 路 Buffalo, NY 路 Member since 2013 路 227 posts 路 318 votes9y
Hey, @Assi S. those are some great questions. Can't wait to see the responses. As I think about my business and after marketing is consistent and at maximum scale for one individual to handle I need to replace me. Now if I think of what I do that gets me 80% of all my deals it would have to be negotiating, estimating rehab costs, and contracting. Therefore building scripts and systems around these areas to hand over to someone is going to be critical. Given that I think my first employee is a sales person. I could have him/her work the leads from my marketing efforts and pay them on commission, which would keep my overhead costs low. Thanks for the question.
- Flipper/Rehabber 路 Sacramento, CA 路 Member since 2016 路 807 posts 路 815 votes9y
That's awesome that you're thinking about turning it into a business instead of a job. I'm currently doing the same.
We have to break down the process into individual roles and slowly fill those roles. We have
1. Lead Manager: Takes calls, inputs information into podio, checks for motivation, sets appointments. Basically a secretary with good phone skills.
2. Aquisitions Manager: Goes on appointments, estimates rehab cost, negotiates price and gets contracts signed. This should be someone with great sales skills and knowledge of SFR flipping. Perhaps an RE agent, car salesman, contractor. You can pay them a salary + 10% net profit on all deals they get under contract.
3. Property Sales: Once you have a contract. This person opens escrow, contacts buyers, gets second contract signed and ensures the deal closes smoothly.
4. Marketing manager: This person executes your marketing plan every month and explores new marketing ideas to reach motivated sellers better.
In the beginning, we're going to be doing all of these things. But the first position I'd hire out is lead manager since we can't sit around taking calls all day instead of going to appointments. Then I would hire an Aquisitions "assistant" who would come with me to all appointments and get trained by me on how to fulfill that role. Once they are ready, they can upgrade to Aquisitions manager and fly solo.
The overall goal is to get to a position where we just have to oversee these positions, solve problems as they come up and track performance.
- Wholesaler 路 Roanoke, VA 路 Member since 2015 路 277 posts 路 95 votes9yPratik P. I like that setup
- Investor 路 Miami, FL 路 Member since 2015 路 379 posts 路 330 votes9yIf you find a way to scale this business please write a book on it cause I've considered paying for a program by one of these qualified guru's just to figure this out. I attempted to outsource lead generation to "scouts" (not a fan of the term bird dog) but have gone through countless people who felt they were motivated till they called 10 people and didn't get a deal. Mind you I offered $1500 per closing which I felt was competitive. At the end of my 6 month trial of going over the wholesale process with 20+ people asking the same questions everyday, we ended up closing with 3 scouts and each of them immediately requested 50% of all future deals. Needless to say, an employee that gets paid 50% is not an employee lol. They are all partners and I'm left with no one under me all over again. I am leaning toward the idea that wholesaling is more of a you eat only what you kill, such as like being a RE sales associate, while rehabbing is like being a broker. My mentor (and many other people) has systemized rehabbing so that he never steps foot on the property more than twice at max. He has a team of wholesalers, contractors and realtors going through the motions while he focuses on other endeavors and that is now my current goal with this business. Sorry for the long post. This topic rely spoke to me lol. Feel free to reach out as I am also in Miami ! Happy investing
- Flipper/Rehabber 路 Sacramento, CA 路 Member since 2016 路 807 posts 路 815 votes9y
They probably wanted 50% because they were bringing you the leads right?
With my structure, I'm the one sending out 50k letters a month and bringing in the leads, so there is no reason to split 50%. Of course, I don't do this right now. I'm only speaking in theory.
- 9yJay HinrichsBusiness MemberReal Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
@Pratik P. I just wonder if there is really enough inventory that can be bought to make this all worth the time and effort.. when you know there are 100 others just like you in the same market sending the same direct mail... I don't know for a fact.. but I do know when I used to chase NOD's most folks that had an NOD had 100 to 150 letters in a few months.. odds are slim.. so you need huge amount of potential deals. in some markets Yes in Others waste of time and resources
- Flipper/Rehabber 路 Sacramento, CA 路 Member since 2016 路 807 posts 路 815 votes9y
@Jay Hinrichs I absolutely agree with you. My structure would only work in a situation where I'm bringing in enough deals where I NEED to hire help. As of now, I'm not in that situation.
Wholesaling is probably the easiest to get into but the hardest to accomplish, especially in hot markets like mine. But I still think there are deals to be done if you know what you're doing and how to get them. I closed a deal 2 weeks ago that net me 32k after spending about 2k on marketing. So it can be done!
- 9yJay HinrichsBusiness MemberReal Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
@Pratik P. dont tell anyone you made 30k you just created another 50 wanna bee wholesalers to compete with you LOL
- Flipper/Rehabber 路 Sacramento, CA 路 Member since 2016 路 807 posts 路 815 votes9y
@Jay Hinrichs LOL ok ok you're right :]
- 9yJay HinrichsBusiness MemberReal Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
@Pratik P. your DAMN right I am right.... keep that stuff to yourself.. LOL.. Last thing any business starting out wants to do is create their own competition..
- 9yAssi S.NY 路 Member since 2016 路 46 posts 路 15 votesOP
@Pratik P. thanks for your plan, definitely seems legit if you bring lots of leads, i think the one that deal with the leads can be VA , and if the calls are recorded its better for improving.
For acquisition manager - do you think he can get paid on commissions only? Like 20%?
What about certain software or apps? Which one helped you to run this business faster and the ones you can work without today?
- Real Estate Investor 路 Sunny Isles Beach, FL 路 Member since 2013 路 788 posts 路 333 votes9y
@Pratik P. Absolutely love your description! That's exactly what I've done (though not for wholesaling, more flipping and close & re-sell unless seller agrees to a wholesale process and closing wouldn't make sense/be possible). I have an acquisition partner, marketing partner, and I handle post-contract flipping. Looking to hire more staff in the future (on-site flipping person; second person answering the phone; working with more real estate agents). Always hunting ways to save time and more deals. As of last week, I had 4 properties under contract and 4 properties in ownership, and about 915 seller leads. No way I can manage it on my own (even the 4 and 4 can be overwhelming).
- 9yAssi S.NY 路 Member since 2016 路 46 posts 路 15 votesOP
@Lucas Machado when i grow up i want to be just like you 馃槈 You ppc is all over my phone, great job man , so what is the tips and the guidelines you would give to the younger you? What were your first steps of growing, hiring your first assistant, partner, system that helped you move on to more deal, what is your must have , do if you just begin today??
Thanks man and hope to meet you, i get some leads that i birddog maybe i can work with you too
- Real Estate Entrepreneur / Investor 路 Chicago, IL 路 Member since 2016 路 688 posts 路 367 votes9yDemetrius Davis You hit it right on the head. It's better to get deals done together as a team than to lose a deal or be greedy wanting all the profit. But I wouldn't go past 3-4 people unless it was a great. Great deal.
- Real Estate Investor 路 Sunny Isles Beach, FL 路 Member since 2013 路 788 posts 路 333 votes9y
@Assi S. That's alot of questions : )
I'm always learning and there are way bigger fish in the sea than myself.
That being said, if I had to start over, I would seek mentors to work with in the local area. Hunt the deals, bring them the deals, and soak up information like a sponge as we work together. I still do that in terms of seeking mentors, but I mostly have enough experience to manage and secure financing on my own. As to always learning, I've been working on this condo deal the last two weeks, which I've previously avoided like the plague, and have learned so much during due diligence from mentors and the GC re: condos.
PPC and mass direct-mail is very expensive for starting out - so I would never recommend those. Probate leads with hand-written envelopes; hand-written yellow letters to targeted mailing lists should be affordable and high value. I've been there, done that. InvestorCarrot type website. Re: InvestorCarrot - although you can't do PPC since it's cost prohibitive, that isn't to say you can't begin the process of ranking up your site, as well as marketing yourself on Facebook, Instagram, Twitter, Pinterest, etc. This is all free. I started my site about 1 year ago (kicking myself for not starting 2-3 years ago), and it's ranking from #1 overall to mid-page 3 on some of the key searches - I get around 6-7 free leads per month. Not "huge" but I'm not at the top yet (time is critical for ranking and it took about 3 months to even show up). No reason you can't write blogs, do a podcast, livestream, videos, to market yourself and your business. My team does this all cost free (besides time). I'm not suggesting you just pop on your phone and do a random videos; but it doesn't cost much to get a logo made (check 99designs) and get started on a legit online marketing plan.
We work with bird dogs regularly. Two levels though: you can bring a contract, or bring a lead. Bringing a contract is substantial, so even if you do not work you will get a big piece of the pie. Bringing a bird dog lead is fairly marginal, we would have to do the negotiations, and most leads don't become deals - so really that would be a small finder's fee - can't give 10-20% for a lead. However, there is really no reason you can't get a deal under contract and bring that to an investor though (note: I'm not suggesting wholesaling - big difference between a JV and a wholesale).
- 9yAssi S.NY 路 Member since 2016 路 46 posts 路 15 votesOP
@Lucas Machado great post my friend, i appreciate it.
i am currently doing DM for high equity Absentee owners in certain areas , and already have my Investor Carrot website, but I'm not doing any online marketing yet, I'm trying to focus on one area for now , I'm doing some driving for dollars and sending yellow letters to them. ill defiantly look into the website, maybe ill get some VA to help me promote it better on Ranking, you can check www.browardcashbuyers dot com
i have some money that i saved and looking to invest $1000 monthly on marketing to start generating leads and hopefully close some deals, i defiantly don't want to lose that money and i hope i can get some deals done.
I'm doing it full time the last 2 months and hope i can get the momentum on.
do you mind share with me how you get the probate leads, i know i can look in the book at the court , but what should i look for specific , who do you mail the letter?
i have ton of questions i know and I'm sure you remember all of the one you had when you just started lol. maybe ill start to look for some partner , I'm open for that. thanks man for your help
- Northern, CA 路 Member since 2014 路 674 posts 路 444 votes9y
I'm working more towards doing everything virtual, but my goal isn't to wholesale but to close on the deals. I think Michael Quarles has a nice system so I'm copying that for the most part. No need to see the property in person, get a bpo after contract is signed based on owners estimation of property value. IF that is wrong, use the bpo to renegotiate. Move on to an appraisal and an inspection. These 3 would cost ~$1000, Close on the property, then use preferred exit route (resale, rehab/flip, rehab/rent). I've negotiated free bpo's with my broker, he will then get to list everything I sale. You would then just need to train someone to negotiate over the phone with a scipt and how to shuffle paperwork. The bpo agent and appraisers/inspectors can act like your employees in a sense, only need to pay them when you have a contract.
It's way cheaper to pay someone $15 an hour to answer phones and negotiate this way than it is to pay an outside sales manager a % and have them driving all over the place meeting sellers, they may only be able to see 3-5 houses in a day. Easy to scale this way also if you wanted to.
- Flipper/Rehabber 路 Sacramento, CA 路 Member since 2016 路 807 posts 路 815 votes9y
@Lucas Machado Thanks, Sounds like you already have a similar team in place! How much marketing are you doing to get 915 leads! Is that 915/month?
@Assi S. I spoke with another wholesaler recently who hired a VA in the Philippines. He pays him $3/hour + commission, which is crazy money over there apparently.You could try a commission only approach but I'd like to have predictable monthly expenses for my business. I don't want to pay someone $2000 one month and then $10,000 the next. A base salary + smaller % would keep that more stable.
As for software, I highly suggest you get Podio (free version) and manage your leads there. I'm not sure what I'd do without Podio or a similar CRM. I also use CallRail to track my marketing performance. Each of my DM campaigns is assigned a specific number so I know my response rates for each list. All the numbers forward the calls to my google voice number. - 9yAssi S.NY 路 Member since 2016 路 46 posts 路 15 votesOP
@Pratik P. hey what was the job of the VA?
I'm trying to set up podio right now even though i have no customers yet , but i want to have the base ready, and learn how to work properly from the beginning., I'm doing DM right now, driving for dollars , have a website , and building a buyers list so i want to see how podio can help me have everything in one place.
i am thinking to get someone from upwork to set it up for me cause it seems complicated?, any recommendation about that? maybe i can get you for 10 min on the phone for some guidelines if its not too much.
thanks again
- Flipper/Rehabber 路 Sacramento, CA 路 Member since 2016 路 807 posts 路 815 votes9y
The VA was the call taker. They took calls, input information and set appointments.
Definitely set things up so that the business can easily be scaled and automated. I made a mistake of using a notebook to write down lead information when I first started. You can imagine how crazy that got after just a few leads lol
No need to hire someone to set up Podio. If we can get on a video chat, I could share my screen and walk you through my set up, it won't take very long and you'll get a clear idea of how you can set it up for your business. Shoot me an pm!
- Real Estate Investor 路 Sunny Isles Beach, FL 路 Member since 2013 路 788 posts 路 333 votes9y
Not 915 over the last month! That's 915 over the last 12 months.
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