Wholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votes
About to pull the trigger.
After a year of education, dabbling, and talking with hundreds of investors, wanna be investors, and sellers, I'm taking massive (imperfect) action. I'm a college student with a couple grand.
My plan is to use listsource to generate 1063 names/properties of 39-100% equity, age 50-99, and built before 1987. Then we ship those names over to REIskip.com to obtain phone numbers of the individual and relatives at $0.24 per name. We also plan on purchasing a multiple phone-dialer (calls three numbers at once and first to pick up I get connected to then calls others right back) to pore through the names. We plan on doing this multiple times, and calling the sellers once a week until we get deals, or a motivated seller.
List: $214
Skiptrace: $255
Mojodialer: $150 per month
Total: $619
****will most likely do this every month with new zip codes
If you have money, spend it. If you have time, use it. I plan on calling for 2-3 hours everyday.
Any suggestions on how to do it a different or better way?
Huntington Beach, CA · Member since 2017 · 3 posts · 10 votes
8y
I love that you are a college student with some hustle! My suggestion is this. BE CAREFUL! Research The TCPA (telephone consumer protection act). You can’t call a consumer with automated technology, unless you have express written consent. Many people break this rule, but just be warned the fines can be stiff and painful. You also need to be aware of the Fed DNC. Last I checked If the numbers you are calling are registered on the DNC the penalty can be 16k per violation. Some attorneys make a living fielding unsolicited marketing calls, and sending out demand letters for unsolicited marketing calls.
The only truly compliant way to do what you are looking to do is to scrub out the following.
Cell phones
State DNC
Fed DNC
You will be left with non dnc landline numbers. You can hand dial (no automated dialers) these numbers.
Like I said many people break the rules, but eventually all will call the wrong person, and pay the price.
Hope this is helpful.
Huntington Beach, CA · Member since 2017 · 3 posts · 10 votes
8y
I love that you are a college student with some hustle! My suggestion is this. BE CAREFUL! Research The TCPA (telephone consumer protection act). You can’t call a consumer with automated technology, unless you have express written consent. Many people break this rule, but just be warned the fines can be stiff and painful. You also need to be aware of the Fed DNC. Last I checked If the numbers you are calling are registered on the DNC the penalty can be 16k per violation. Some attorneys make a living fielding unsolicited marketing calls, and sending out demand letters for unsolicited marketing calls.
The only truly compliant way to do what you are looking to do is to scrub out the following.
Cell phones
State DNC
Fed DNC
You will be left with non dnc landline numbers. You can hand dial (no automated dialers) these numbers.
Like I said many people break the rules, but eventually all will call the wrong person, and pay the price.
Hope this is helpful.
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
8y
oK...young ambitious--I like that. Here are my servings from my MP5:
1. no cash to close? How can you sign contracts and deceive sellers if you cannot close? 2. not legal in all states. Some states prohibit advertising properties you do not own.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Not to throw cold water on your plan but why you are trying this you may want to get your RE license if RE sales is what you want to do.. wholesaling is a path with no end for 95% of the people that embark on it.. whereas a good Real estate agent can build a career that will last a lifetime.
and if you want to specialize in income property go work for a commercial broker you put 10 years in there and you will be come rich that I have no doubt..
Just my thoughts on it.. I started at 18 selling real estate and while I have had my ups and downs and made millions and unfortunately in 08 lost a good chunk of them along with everyone else in the business.. what I learned and who I run with creates untold opportunities you just auto dial desperate people and all your doing is working with those folks.. your one and done your not building a client base per se or a future..
Wholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votes
8y
Nate Beucler
Thank you. There’s no perfect plan, thank you for that bullet. I’d rather patch it up now then take a cannon from the SEC later.
I even looked, it could be up to 40k in some states.
Will make sure to speak with skiptracer to make a note on those with a DNC preference.
If they can’t, I have the choice to either screen them myself or just take the risk.
If I go with the latter and have a pissed off homeowner with that debt to pay, do you know how I would and (if) I would owe the entire debt? Let’s say I have 5k to my name, what is the next step from there?
Thanks!!
Wholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votes
8y
John Thedford
Thanks for your questions.
For 1, (and all other issues), every investor I’ve come across so far (not to say all of them will) have the same first impression as you all. “Holy **** he’s 18 and hustling, maybe I’ll give cut him a break this one time” I’m not out here looking for the world (yet), just looking to learn.
What I mean by this is that my goals starting off are not to focus on profit, but to focus on building connections and learning how reality works in the industry. So I might take a 1000 assignment fee or smaller, and just let the investor close on the property and put the earnest money down.
Really out here to learn and fail as many times as I can so once I get into the big game I’m already performing and know the thorns to look out for.
For 2), I’ve done extensive research on BP and talking with attorneys who do or handle REI and have found that at least in my area (Hampton roads, Virginia) it is legal.
**legal as long as I put myself as the entity buying the property, which as stated above I might completely bypass with just going for a fee from the investor for the first couple and not being part of the deal legally at all.
What are your thoughts on this approach?
@Jay Hinrichs how are you finding these desperate people and their phone no.'s
Easy I don't... have no interest in it.. in my world I buy off of MLS and auction sites...
and for my new construction we are buying land that is usually 1 to 3 million..
I did do telemarketing though when I was in the timber business. and we made millions at that.
but its a niche.. what is see in the SFR space is you have thousands of would be folks with limited capital all trying to do the exact same thing.. so me thinks you need to separate your self from the pack..and or figure out what you want to do for a career.. wholesaling as a career except for a very limited few is a short term run..
the guys that make the big dough at it are the guru's who sell the how to wholesale DREAMS
Wholesaler · Los Angeles, CA · Member since 2016 · 276 posts · 181 votes
8y
Jay Hinrichs
I have always valued your wisdom and experience, especially because you started when you were 18 and have seen it all.
With that being said you are 100% correct.
I need to get my license, not only for the practical and legal benefits but also as credibility and validation to a seller. If I can show that I’m a licensed agent they might trust this kid hammering cold calls from his dorm room a bit more. Maybe.
Along with access to MLS, so I can finally leave behind the dumpsters of Zillow, trulia, etc, could change my game.
My plan going forward is probably doing one or two runs of cold calling, then whether I find success or not I get my license. Just after over a year of educating myself, I need to get out and start making mistakes then circle back and correct my course.
Entering into contracts with no intention or ability to close is FRAUD BY INDUCEMENT. If you lead a seller to believe you are not a buyer when you are not, this is deceit at best and possibly could get you sued. I do not know the legalities of advertising properties in your state to know if that is legal if you are not licensed and not a principal to the transaction. I am not telling you to do this or not. I am pointing out facts. You have the make the decision how to operate-not just legally, but a moral one. I truly believe honesty will take you a lot further...just my opinion though.
Especially in the beginning I plan on being completely honest with all parties involved. This means letting sellers know that I have no ability or intention to close, just simply looking to find a solution for them (they need to get out of their home for some reason) and for an investor (who needs work and rehabs and flips properties to make his living). In my experience thus far, sellers are open to that. Not all will be, I know. But trying to come from a place of trust and telling them exactly what I'm doing and making on the deal from the start should help put them at ease. We are going out and looking for people who have a serious problem with their property (oncoming forclosure, mortagage they can't afford, etc) and finding real solutions, and not being shady in the meantime. There are too many swindlers out there. @Jay Hinrichs mentioned above about setting yourself apart, and I think being destructively honest and putting yourself out there to help solve problems, even if you don't make a penny on it could be part of that.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@William Brown you may want to check with @Russell Brazil I am pretty sure what your doing is going to violate the real estate licensing laws..
not that thousands of folks do it but does not make it legal.. and you would hate to jepordize your ability to get your RE license by having a violation.. I know in our state its totally illegal.
Especially in the beginning I plan on being completely honest with all parties involved. This means letting sellers know that I have no ability or intention to close, just simply looking to find a solution for them (they need to get out of their home for some reason) and for an investor (who needs work and rehabs and flips properties to make his living). In my experience thus far, sellers are open to that. Not all will be, I know. But trying to come from a place of trust and telling them exactly what I'm doing and making on the deal from the start should help put them at ease. We are going out and looking for people who have a serious problem with their property (oncoming forclosure, mortagage they can't afford, etc) and finding real solutions, and not being shady in the meantime. There are too many swindlers out there. @Jay Hinrichs mentioned above about setting yourself apart, and I think being destructively honest and putting yourself out there to help solve problems, even if you don't make a penny on it could be part of that.
OK I get the honesty part. Lots of FRAUDS AND SCAMMERS will try and convince you otherwise. Now, WHAT can you bring to a seller that an agent cannot. As an example, our listings propagate to over 800 websites. A list of 25 or even 100 "buyers" may not suffice. You might even come to find that some lied to you, and they are NOT real buyers. Why not get a license and open up 1000 more doors for yourself?
@William Brown you may want to check with @Russell Brazil I am pretty sure what your doing is going to violate the real estate licensing laws..
not that thousands of folks do it but does not make it legal.. and you would hate to jepordize your ability to get your RE license by having a violation.. I know in our state its totally illegal.
i AGREE 100%. We have a guy trying to get his license here but he has already been in trouble once, and is now in trouble again. He got sued and one of the accusations against him was brokering without a license. He lost his deal BTW. What are his odds of being able to be licensed now? I suspect not good. It is VERY POSSIBLE he gets charged with a 3rd degree felony this time around.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@William Brown you may have heard this ignorance is no excuse when it comes to the law.
being honest does not matter if the whole premise of what you are doing is violating licensure laws.
I don't know in your state.. that's why I tagged Mr. Brazil.. Guru advice about equitable interest does not hold up when your entire scheme involves simply making commissions and not the occasional assignment. but be that as it may.. its a great industry try to get started on the right foot if you can
@William Brown you may want to check with @Russell Brazil I am pretty sure what your doing is going to violate the real estate licensing laws..
not that thousands of folks do it but does not make it legal.. and you would hate to jepordize your ability to get your RE license by having a violation.. I know in our state its totally illegal.
I am of the belief that a licensed agent should not wholesale via the method of using an assignable contract. This to me appears to be a de facto net listing. Now if a net listing is legal in the state, then I would say have a license, but if a net listing is illegal, as it is in most states, I do not think a licensed agent should participate in that activity. They should instead close on the property, and resell it.
I also just dont understand the fascination with wholesaling. To me is entirely the hardest thing to do in real estate. You have to be a master marketer, master sales man, master at valuing property, often a master at estimating rehab, a master networker. How many hundreds of wholesalers are there in my market....and how many of them are successful, maybe half a dozen. (Some of those successful ones are members here on BP) But I think those guys that I know that are successful at it, would be successful at pretty much whatever they put their minds to.
I think it is far easier to find a moderate amount of success as a landlord, flipper or as an agent all of which have very easy established business plans to follow.
@William Brown you may want to check with @Russell Brazil I am pretty sure what your doing is going to violate the real estate licensing laws..
not that thousands of folks do it but does not make it legal.. and you would hate to jepordize your ability to get your RE license by having a violation.. I know in our state its totally illegal.
I am of the belief that a licensed agent should not wholesale via the method of using an assignable contract. This to me appears to be a de facto net listing. Now if a net listing is legal in the state, then I would say have a license, but if a net listing is illegal, as it is in most states, I do not think a licensed agent should participate in that activity. They should instead close on the property, and resell it.
I also just dont understand the fascination with wholesaling. To me is entirely the hardest thing to do in real estate. You have to be a master marketer, master sales man, master at valuing property, often a master at estimating rehab, a master networker. How many hundreds of wholesalers are there in my market....and how many of them are successful, maybe half a dozen. (Some of those successful ones are members here on BP) But I think those guys that I know that are successful at it, would be successful at pretty much whatever they put their minds to.
I think it is far easier to find a moderate amount of success as a landlord, flipper or as an agent all of which have very easy established business plans to follow.
BP serves the koolaid as well as people pushing this garbabe on youtube, etc. The appeal is to people with little to no money believing this will solve their issues. A better way to solve them is possibly an education, different line of work, or marry a rich spouse:)
Appreciate the honest words. I wouldn't come here literally asking people to shoot bullets in my strategy to listen to something I want to hear or know already. I guess it comes down to options:
18 years old, living on campus for the next couple years, tuition, room and board covered (thankfully) by my parents. I've got time (for really the next 4 years), and I want to use it to learn the industry inside and out and make some capital, instead of playing video games or drinking every night.
Real estate is also my end goal, I love the game aspect of it and am an entrepreneur at heart. (also trying to start 2 other small automated businesses here at school)
Not looking to earn the world right now, just learn and make enough money to possibly put a downpayment on a rental here in the next 1-2 years. Its just about going out and doing it and failing wisely.
Everything you all have said is absolutely correct, especially about getting my license. I'm going to get right on that.
Kicking myself out of the nest, time to see if I can fly. If I crash, i'll get up and do it again but with more expertise and confidence.
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
@William Brown great attitude.. the license course will get you up to speed on terminology and the laws of the land.. that's a big step up compared to so many that go into wholesaling half baked blow what little seed money they have then end up right back where they started.. You could also intern at a larger development company... PM company etc etc. U don't want to relegate your career and business trying to snag houses from people only to sell them to greedy investors :)
Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
8y
@William Brown Reading through all the comments, I can see that you've got some insights on how not towholesale.
More importantly, your attitude and momentum are fantastic anchors to take you to the next level, but it will be wise for you to expend all that energy through the legal channels.
In my experience, I have yet to get a deal from a wholesaler, for instance, I got a deal from a builder who didn't have the bandwidth to build a project, so he sent it my way. I mention this to reiterate the importance of building relationships in your market consistently, and you'll start to see things to fruition.
@William Brown Hey, so I read about your plan for finding motivated sellers.
Then what?
Honestly you sound like you have a great head on your shoulders. Come see me when you graduate and I'll teach you how to make a killing in the title industry.
@William Brown you may want to check with @Russell Brazil I am pretty sure what your doing is going to violate the real estate licensing laws..
not that thousands of folks do it but does not make it legal.. and you would hate to jepordize your ability to get your RE license by having a violation.. I know in our state its totally illegal.
I see you are an experienced broker and made millions of cash being licensed. Your opinion is so biased though. Thousands of people wholesaling doesnt make it legal, but who told it is illegal either. Can you bring me any specific statute or law saying you can not re-assign the rights to buy the property on the contract? Wholesalers do not get commission, they dont list properties on mls or zillow, they dont state they own the house nor they're realtors. Otherwise, yes it is illegal. I am a realtor and I certainly know that closing the first deal as an agent may take a few months, while I still have to pay broker fees, board fees, insurance and all other BS. People are always scared of the something untraditional, that makes their living harder.
@William Brown you may want to check with @Russell Brazil I am pretty sure what your doing is going to violate the real estate licensing laws..
not that thousands of folks do it but does not make it legal.. and you would hate to jepordize your ability to get your RE license by having a violation.. I know in our state its totally illegal.
I see you are an experienced broker and made millions of cash being licensed. Your opinion is so biased though. Thousands of people wholesaling doesnt make it legal, but who told it is illegal either. Can you bring me any specific statute or law saying you can not re-assign the rights to buy the property on the contract? Wholesalers do not get commission, they dont list properties on mls or zillow, they dont state they own the house nor they're realtors. Otherwise, yes it is illegal. I am a realtor and I certainly know that closing the first deal as an agent may take a few months, while I still have to pay broker fees, board fees, insurance and all other BS. People are always scared of the something untraditional, that makes their living harder.
Not really following your response but here is what I wanted clarity on in MY State each state is different of course.
I got an e mail blast from a wholesaler who did not own the property and was not licensed in Oregon to sell property. it was your typical mail chimp flyer with picture of the house bd ba sq ft exactly like an agent would do.
I had title run a date down on it and it was not owned by the person or persons that were advertising it.. wanted to make sure I was correct.. had not changed hands in 15 years.. I then went to the DRE website the individual and the company are not licensed.
So I got sic and tired of is this OK is this not can you assign can you market before you own etc.
so I sent it off to the state and this was my response after a nice conversation with the regulator .
"
Hello Jay,
Thank you for getting back to me. The advertising copy you attached to your email came out perfectly and will be very helpful. Thanks!
The Agency is well aware that unlicensed “wholesalers” are rampant in our jurisdiction. Addressing the problems is like trying to put out small individual fires in a forest that is burning. The Agency’s investigations are complaint driven, so we rely heavily on the public, and our licensees to bring these individuals to our attention.
Thank you again for the information, if I have further questions for you during the investigation I will certainly reach out.
Best regards,
Frances Hlawatsch | Financial Investigator
State of Oregon - Real Estate Agency
I have yet to see a wholesaler especially starting out that could assign contracts with no marketing no buyers list no e mail no website etc.. it simply a violation of the license laws.. its not a violation of contract law..
and as our state says its complaint driven.. I had one client in Mississippi wrung up by the DRE as well.. he got in major trouble so it just depends on if you get a complaint filed against you and if your in any way marketing the property in the public realm ..
Like this wholesaler who just blasted out a e mail and for some reason sent it to me..
I have one of my bird dog partners here in Oregon get wrung up as well.. he put a sign in the yard of a property he did not own.. neighbor was pissed off because the neighbor wanted the house neighbor knew this guy did not own it turned him in.. 15k later and a cease and desist. .he now brings me everything I close on them and we own them BEFORE we market them.. its the act of marketing a home you do not own that violates state real estate laws.. at least in our state.
so that is why in my response I told the guy you may want to check with your state real estate department.. And I know FLA is cracking down I know Ohio is cracking down.. I know many title companies will no longer to pass through closings .. this part of the business is slowing getting ground down..
Investor · Silverdale, WA · Member since 2017 · 121 posts · 27 votes
8y
@Jay HInrichs I love all the wisdom you share with so many about this industry. Wholesaling can be a way for people with no money to get started, and it can be an additional revenue stream as a business is built-of course in the states its allowed. I would love @Mike Sumsky to weigh in on this topic- since he has been wholesaling in our area for at least 10 years+. @William Brown has a lot of energy and follow through and honesty, he should do very well.