Wholesaling for beginners

5 Replies

Hi guys,

As a beginner in real estate what are the most important steps to take to start off before digging deep with wholesaling?

For ex..

Do I get a LLC to start?

Create a website?

Any websites or apps to have before I begin?

Anything will help and please feel free to inbox me if you need to..

Thanks in advance

@Jonathan Rivera ,

Step 1, learn about REI. There are so many ways to get involved in real estate, so find what sounds good to you. Read, watch, and also attend as much as you can. I suggest you start going to all of the local REI events you can find. Since you posted here, I'm assuming you want to get started in wholesaling, which really makes sense as there is a low bar of entry. But don't fool yourself. It's also a lot of hard work, and there is going to be a financial investment as well.

Once you decide what you're going to do, make a plan.  Honestly, a message board post isn't going to get you that plan, but it is a good start.  Again, research this.  While I don't say you definitely need a business plan, they do help you to focus and to identify what you need to do.  Whatever you do, plan to be marketing - a lot!

Assuming you've gone that far, to answer your questions...

Yes, form an LLC. Absolutely. There are significant tax and asset protection benefits to this (there's a whole separate topic!) and it honestly helps to show your serious about your business - both to yourself and to others.

Create a website?  Is there any successful business at this point that doesn't have one?  Actually, you're going to potentially end up with at least a few.  Again, research and plan what you need from a website (or websites) and just don't blindly go forward to create something.  I've barley started, and I have two.  They're not impressive at this point, but I needed something to send people to in order to contact me if they don't want to call.  (Disclaimer:  I'm an Internet programming junky, so there's no way I would ever tell someone they don't need one.  Also, I plan on completely automating my business through the web.)

Must have websites and apps?  It depends on what you need.  There are tools out there to help you manage and automate your business.  Assuming you're going to do some D4D, I do highly recommend DealMachine.

More importantly than anything, though. Get involved in your local REI community. I can't emphasize that enough. Attend as many meetups as you can. You should never leave one thinking, well that was a waste of time!

Good luck!
   

Why not get a job in real estate working for someone who does what you want do? Websites and LLCs aren't as important as knowledge. Reading about real estate is cool, but by doing it you will learn how it works in practice, not theory. 

@Nick C.

You are right about that but I wouldn’t want to take a pay cut even tho it’s a really great idea. I’m sure it’s commission based, well most of them around where I’m at (NJ).. but you I’ll keep that in mind.

Yes you definitely want to set up an LLC to operate under then first step is to make sure you understand the laws in your area regarding wholesaling which is the assignment of a contract and double closes. Several states have passed laws calling wholesaling brokering and are requiring a real estate license to wholesale.

You should talk to a real estate attorney or title company that works with investors in your area to ensure you are in compliance with any laws. They will also have the proper contracts as well.

Next you need to educate yourself on the business and your market. You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers. You want professional legitimate cash buyers so you know you can close on the deal and do what you tell the seller you will do. I can’t emphasize this point enough. You do not want to contract a property unless you know you can close it or take it down yourself.

Different types of cash buyers are flippers, buy and hold, subject to and lease option. You need to find several of each of these types of buyers and learn what they are looking for. You will learn a lot about the business and the market talking with cash buyers.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups, Realtors, title companies, closing attorneys, property management companies, auctions, Craigslist, and bandit signs.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase. You can also buy lists from companies like list source and there are some REI software companies that have a cash buyer search feature.

Some of best ways to find motivated sellers is to purchase lists from companies like listsource and or compile lists from city and county like 60-90-120 days late on mortgage, pre-foreclosure, delinquent taxes, water cutoff, code violation, probate, divorce, etc. Then you can mail or cold call or both.

Other cheap or free methods are driving for dollars, craigslist, Realtors, FSBO sites, expired listings, foreclosure sites and bandit signs if allowed.

If you have the funds you can use billboards, newspaper ads, other offline publications., TV commercials, radio ads, motivated seller website, SEO, pay per click/adwords, facebook, Linkedin, Youtube, and other forms of online advertising and boosted/promoted social media postings.

Bottom line is consistency. You need to take consistent focused action every day, answer the phone when it rings and follow up and follow through.

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