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Wholesaling

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Darwin Crawford
  • Rental Property Investor
  • Scottsdale, AZ
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How to be a better wholesaler. With FAQ's.

Darwin Crawford
  • Rental Property Investor
  • Scottsdale, AZ
Posted Jan 7 2018, 19:48

Whats Happening BP?  

So, first off, hi, I'm darwin, and I don't post or follow on this forum much, because it gets my blood pressure up.  I've been a property investor now for about 4 years, and own some rentals, and some commercial property.  I've also spent the last 2-ish years working for a large-volume wholesaler, and am starting with another one in a week or so.  I trained our acquisitions team, and continue to do so for some up and comers in the business. 

Couple things:

First - I have kind of a foul mouth, which I'll try to keep under control, but for f**ks sake some of this needs to be given to the world of wholesaling.  I don't do much social media, but feel free to re-post, or whatever you need to.  Just please quit giving us a bad name.  The first effing sticky on this ENTIRE FORUM is a rant from a genuine (I think) investor, sharing an experience which I have had as well.  Shame on the slobbering moron who tried to sell him that deal.  

Second - I am, and have been, wrong in the past, and will probably make many more mistakes.  I'm cool with it, and frankly if you aren't OK with doing this same, this business is going to chew you up and $**t you out on the carpet.  And you deserve it.  Happened to me on a few deals.  

Third - your activities here on BP are completely voluntary.  That includes reading this post.  Thanks for your understanding.  

So here you are:  Some FAQ's to the spectacular 3 ring circus of bull***t known as "wholesaling".  I'll use the term "wholesaler" interchangeably in this, as the wine and the espresso fight for my attention.  I get most of these lines of inquiry from this forum, and the trainees in our office.  

**Please, please dear Vishnu try to keep a 30,000 foot view of this game, and don't ask me stupid micromanaging questions.  I get plenty at work**

Q: Wholesaling - WTF is it anyway?  

A: Great question!  Really!   Here is what it is - you are going to use your SKILLS and KNOWLEDGE of a given market to get a DEAL*.  Then, without actually using any of your own money, (because 70% of the people in this game are broke newbies - don't worry I was too, thats not an insult before your knickers get twisted) you are going to find an investor who actually has money (and statistically speaking way more experience than you) and sell it to them for a fee.  Kinda cool right?  No money of your own, close some deals, make some coin.  Sweet, hell yes, count me in!   The problems arise because most wholesalers are a bunch of low-level conniving, lying, duplicitous $h*tbirds.  

*If you don't know what this word means yet, its OK, but keep reading. 

Q: Wait, why doesn't everyone just do this?  

A: Again - you are kicking some @$$ with these questions tonight. Good Job! Well, let me give a couple of reasons - most people learn this "business" from facebook, or some YouTube idiot, or some guru, or god forbid, this website. There is very little concrete information given, and since the barrier to entry is stupidly low, everyone and their younger brother has decided to get into the swimming pool. Said pool is now obtaining the consistency of a port-o-let on the 3rd day of Coachella. I'll let your imagination fill in the smell. Most people grossly underestimate the amount of work that goes into this, are completely effing clueless on pricing, renovation budgets, or even the basics of REI. And so when they go to sell their first deal, its about a smooth as your first time doing, well, whatever you did after prom. Sticky, awkward, and no one feels all that satisfied. Bummer.

Q: You seem so annoyed - why?  

A: Home run junior - here is why - I spent, and continue to spend, a lot of time and effort and money at this game, and I respect the hell out of everyone I've met who acts like a professional.  I've bought property nationwide, made my bosses and partners a LOT of money, but it was a long hard road to get there, and sure, I can freely admit that when some window-licking muppet gets in the pool (we're back to the metaphor part now, just FYI) and overbids on some god-awful deal based on his "Zestimate" and then tries to re-sell it to our office, it costs everyone time, money and hair off the back of my head.  None of which I can afford to lose, just saying.  So yea, annoyed.  While I'm on my soapbox, I also would really like all of you to knock off the fast money big watches wholesaling culture.  It must be awful having to fake your way through your professional life.   I feel sorry for you. 

Here is a free tip from a guy who is way better at negotiation than you and me - he who gives the least amount of f**ks wins.  Set yourself up well as a person, and you can get better deals if you're not desperate.  Kind of like dating! 

Q: Now that you're done ranting like a lunatic, can you actually help me do a deal?

A: Sure, and I appreciate you listening, you are already redeeming your miserable wholesaling ways.  Maybe I need more hugs, and a puppy. 

Q: Seriously, spit it out, and quit being a jack@$$, how do they work?  can you give an example?  

A: yes.  I purchased a property over the phone, using negotiation, lead generation, quanting (word?  not sure), and a very carefully cultivated relationship with a large, cash-rich organization who was also professional, and in desperate need of inventory.   We were, and continue to be upfront about the fees we charge each other, freely share ideas, paperwork, networks, and tips, training and ethics.  Once I had it under contract, which was after informing the seller that it would be re-sold, we arranged transportation for the seller (he had no car or license) to title/attorney's office, and then funded, closed, and got on with our day.  Easy Peasy.  

Q: How do you know how to do all that?  

A: I worked really f****ng hard and read a lot of books, and spent a lot of time asking people who had been successful before I was.  I also am a property investor.  I am a landlord, I have flipped properties, and I come from the trades (construction).  I've also lost money on property deals before too.  Damn, that taught me a lot.  I carefully cultivated professional networks and relationships, and recognized that when we all work TOGETHER we can make more money.  This isn't a lone-wolf game, despite what some nitwit on InstaGram tells you.  When I screw something up, I spend the first hour berating myself, and the next 24 analyzing how to fix my failure.  Take responsibility, and your career will blossom.  I promise.  

Q: How you you get your buyers list built? 

A: God I'm so glad you didn't say "ur" instead of "your" I might just poo my pants.  Really.  

My buyers list is very, very short.  yes, you read that right.  Short.  The last damn thing I have time to do is answer 45,688 text messages from investors about a property.  I have chosen my buyers carefully, cultivated relationships, gotten to know their business model, and made sure, as in 100% sure, that when I call, they pick up, because I've got good news to deliver.  The responsibility to do that is on me, not them. I don't waste my time on newbies, or other wholesalers, or any other time-sucking-vampire-knuckleheads.  My time is valuable to me, I want to do deals, get paid, and go be with my friends, family, and loved ones.  Efficiency is key, but means nothing without knowledge and hard work.  

Q: No One will buy my deal and I don't know why??

A: If you really want to piss off every actual buyer in your town, keep giving them "deals" that no one in their right mind would take on.  Until you have dropped $30,000.00 (thirty GRAND) of your own hard-earned money on an actual rehab, been stressed out when you are running short of funds, or had to explain to your significant other that you cannot do X because you spent it all at Lowe's, your cute little 1-sheet deal flyers are probably going into the trash/toilet where they belong.  The point of this rant (sorry, I said I'd quit, but I get distracted sometimes) is that you as a WHOLESALER, if you want to succeed in this game, are going to have to get on the side of your INVESTORS.  It is THEIR money that makes this possible, and you need to respect that it took guts and hard work to make it.  If you've never made or lost 5 figures, then you don't have a clue what it feels like to wire $80k out of a bank, and if you belittle that, you're dead in the water.  

For the purposes of this post, lets define a "Deal".  Everyone wants them, right?  A deal, in broad terms, is a property secured by a contract, at a price point that is sharply under market value, and accounts for a REALISTIC rehabilitation to bring to top market standards.  Does that make sense?   Rich guys got rich by working hard and knowing their craft.  If you want to join them, hold yourself to the same standard.  If you cannot complete a basic property inspection, or properly estimate rehab costs, go learn it before you make any more calls or put out those stupid signs on every phone pole in the neighborhood.  There is enough plastic in the oceans without you contributing.  

Or, a third possibility, is that you've lied to the seller/buyer, and they now (rightly) don't trust you any further than a greased weasel.  Can't say I blame them. 

Q: So what do I do to become a better wholesaler? 

A: Damn, I thought you'd never ask - first off, I do NOT know everything, and there are plenty of people out there who are better at this than I am. So take this however you want. Basics - learn to speak clearly and professionally, its harder than you think ; learn WTF construction actually costs before you make an @$$ out of yourself ; get a clue as to what homes need to be good assets ; learn WTF an asset actually is ; read up on phone skills, negotiation, persuasion, learn your markets ; ask your investors what THEY need to earn on a deal and work backwards. If you knock all that out, you're on the way. Remember that there is a reason you are doing this - people actually need help, sometimes because of their own faults, sometimes not. If it were a regular house, it would be on the MLS with some slick-d**k realtor making 6%. So if the thought of unscrambling an egg seems daunting.....I'm sure Starb*cks is hiring.

Happy Investing!

 - Darwin

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