How to 3X your wholesale profits

2 Replies

Hello to my fellow wholesalers! Like many of you reading this, I started my wholesale journey right here on BP scouring the forums reading everything I could. I'm in the midwest so my numbers may very from yours if you are in a more expensive market. My median home value is around $135K. 

When I started wholesaling in late 2015, I had little money, hence the reason for wholesaling. I worked my butt off and got some low hanging fruit. Many of the house I got under contract were vacant. I was able to put a box on it and show buyers. I averaged a modest $5-6K a property in assignment fees. 

One of my first goals wholesaling was to get enough money to start closing on my properties. I mean, if I'm telling a seller I'm buying the property, I really wanted to buy it. Early in 2016, I had a few properties which I had under contract for smoking deals but couldn't put a box on for various reasons. Because these were smoking hot deals, I was able to find a local investor who was a private lender on the deal. We closed on it and split profits 50/50. Over 3 deals, we split $110K- again, these were good no brainer deals for him to lend on. This money allowed me to start closing on my properties. Closing gave me more flexibility. I didn't have the pressure of finding a buyer right away. I could wait it out till I got an offer that was better. My average profit jumped to $12K a property. 

Jump forward to 2018 and the market is stupid hot. Investors are fighting for deals. I'd send a property out at $75K and investors who used to beat me down on price are grabbing it sight unseen at full price just based on pictures. I'm selling stuff in an hour. Then someone later in the day would tell me they would've paid $80K if they had the chance. So now, I hold all offers 48hrs. This gives buyers plenty of time get to the property and look. I tell the buyers to submit their best offer and review all offers at the deadline. I don't treat it as an auction and go back and forth trying to drive up the price. I take highest offer. This way, buyers are forced to submit the best that works for them and wont come in low if they know I'll give them an opportunity to increase it. Our average wholesale property this year has jumped to $18K. 

That's huge since the market is so competitive and our deal flow is way down. Deal cost is way up as well so the higher profits balance it all out. 

Go find some smoking hot deals, find a private lender, and give it a try. 

Originally posted by @Efrem Pierre :

what marketing strategy did you use to get your first deal

 My 2 deals came off seller's posts on Craigslist. Those are the only 2 I've found on CL since. Many of my initial deals came from driving and a small absentee list.