Unloading off market leads-- do I really want to wholesale? (NY)
Jamie BraytonBusiness Member
Property Manager · Troy, NY · Member since 2017 · 204 posts · 81 votesWe have the good fortune of too much off market deal flow and not enough time to tackle all of the projects we wish we could. We hate to just toss these leads, but we don't have a system to offload them. Furthermore, I don't know if wholesaling is something I really want to do. My biggest concern is that it will distract me from my personal investments.
At this time, I don't want my real estate license. The cons currently outweigh the pros for me.
I'm defining leads as contact with off market sellers that have indicated they are interested in selling. In addition to these, we have lists of potential properties that we haven't converted yet.
A few questions:
-have any other investors found themselves in a similar position? Did you do anything with your excess leads?
-do I have any legal options other than wholesaling? I'm in New York. I've read just about every post on bird dogging and the information seems to be mixed. I know I can't broker deals without a license, so it seems I'd be forced to get these properties under contract?
Thanks!
@Jamie Brayton, maybe the real answer is to ramp up your operations to support the lead generation. What's holding you back from doing so?
@Jamie Brayton, if wholesaling is off the table (and I certainly understand why you wouldn't want to do it), I'd consider how best to use the overflow. Obviously, skim the cream from the leads coming in. Beyond that, I'd consider passing them onto a couple of other local REI pros in your area. You can do so without compensation, and build a bunch of good will, or perhaps you get a small part of the deal at the back end. I'm no lawyer, so not sure how that would work or if it triggers a requirement to be an agent.
@Jamie Brayton, if wholesaling is off the table (and I certainly understand why you wouldn't want to do it), I'd consider how best to use the overflow. Obviously, skim the cream from the leads coming in. Beyond that, I'd consider passing them onto a couple of other local REI pros in your area. You can do so without compensation, and build a bunch of good will, or perhaps you get a small part of the deal at the back end. I'm no lawyer, so not sure how that would work or if it triggers a requirement to be an agent.
Thank you for your reply.
I suppose wholesaling isn't off the table, but it isn't a super exciting option. I guess there are two other considerations: (1) a lot of time and effort goes into lead generation and (2) these sellers don't want to be passed off to other buyers. I've tried to connect the sellers to other buyers a number of times (strictly out of good will--it really does always come back around) and they are never comfortable with this. They want the relationship that comes with transaction or they want to go their own way. I guess as I type this the options sort of become clearer-- do the leg work and get it under contract, or stop doing the leg work and just hand off leads. Otherwise I fear I'll end up in murky waters.
If I'm missing any other creative approaches I'd love to hear them!
@Jamie Brayton, maybe the real answer is to ramp up your operations to support the lead generation. What's holding you back from doing so?
@Jamie Brayton, maybe the real answer is to ramp up your operations to support the lead generation. What's holding you back from doing so?
This is probably the real answer! If I really wanted to, I probably could dig deep and do so. We have one foot in these smaller residential properties (I just really enjoy adding these to our portfolio) and then we have big commercial projects going (large self storage, for example). I'm feeling at capacity right now, which is really a systems issue. But this is probably the advice I needed.
@Jamie Brayton Wholesaling is the quickest money making opportunity ever.
I agree on not getting a re license
Many broker deals as a "manager" and get compensated for such.
@Jamie Brayton Wholesaling is the quickest money making opportunity ever.
I agree on not getting a re license
Many broker deals as a "manager" and get compensated for such.
Interesting! How does one operate as a manager?
You can have a lost of clients that will compensate you for your time for assisting in re matters
You can have a lost of clients that will compensate you for your time for assisting in re matters
This certainly sounds interesting! I'll chat with you more offline :).
Do you want to ramp up your business or supercharge your portfolio?
It seems to me that too much deal flow is a good problem to have, just like when people complain they made too much money so their taxes are too high. Each of these problems have a solution. I won't get into taxes. :)
Tremendous deal flow is great! People go to great lengths to have this "problem". If you have too much of something, and there are others who don't have enough, it sounds to me more like an opportunity. Figure out how you want to take advantage of that opportunity.
If you have the cash to take these deals down, or at least more deals, but you don't have the bandwidth, then you need to start hiring people. Figure out where the bottleneck is and hire people to do that work for you. If you don't have the cash to take these deals down, then perhaps you should reconsider wholesaling, or better yet, hire someone to do it for you. I would bet that there are a bazillion newbie wholesalers that would be more than willing to work for you.
If you're not interested in growing your business/portfolio any faster than you're already doing, then offload those leads to other investors. Make sure you pick the right people and manage the transition a bit, if needed, with the seller so they don't get spooked.
Personally, I'd skim the cream and wholesale the rest, and I'd hire people. When you get your portfolio to the point where you just want to relax on the beach all day, hang on to the portfolio and sell the business. :)
Do you want to ramp up your business or supercharge your portfolio?
It seems to me that too much deal flow is a good problem to have, just like when people complain they made too much money so their taxes are too high. Each of these problems have a solution. I won't get into taxes. :)
Tremendous deal flow is great! People go to great lengths to have this "problem". If you have too much of something, and there are others who don't have enough, it sounds to me more like an opportunity. Figure out how you want to take advantage of that opportunity.
If you have the cash to take these deals down, or at least more deals, but you don't have the bandwidth, then you need to start hiring people. Figure out where the bottleneck is and hire people to do that work for you. If you don't have the cash to take these deals down, then perhaps you should reconsider wholesaling, or better yet, hire someone to do it for you. I would bet that there are a bazillion newbie wholesalers that would be more than willing to work for you.
If you're not interested in growing your business/portfolio any faster than you're already doing, then offload those leads to other investors. Make sure you pick the right people and manage the transition a bit, if needed, with the seller so they don't get spooked.
Personally, I'd skim the cream and wholesale the rest, and I'd hire people. When you get your portfolio to the point where you just want to relax on the beach all day, hang on to the portfolio and sell the business. :)
Thanks for your response, Barry!
It is 90% a bandwidth issue. Lack of time is a struggle (I'm still running another non-real estate business full time, as well) and definitely a delegation issue. We're still doing every bit of acquisition, rehab and property management. We genuinely like each piece and have reasons to keep each in house. When I look at our ROI when we keep it all in-house it makes it even harder to hand off any of these pieces. With that said, I'm there are pieces of the rehab we really should start handing off. I've had my fill of demo.
Part of me wonders if doing a little wholesaling/making a little quick cash might help me make this transition (essentially, if I have a little slush fund I can use this to hire out without guilt). While we don't have infinite funds, cash isn't really our issue. There always seems to be enough of it when a truly good deal comes along.
I think this advice is probably just right: "skim the cream and wholesale the rest, and I'd hire people."
We have the good fortune of too much off market deal flow and not enough time to tackle all of the projects we wish we could. We hate to just toss these leads, but we don't have a system to offload them. Furthermore, I don't know if wholesaling is something I really want to do. My biggest concern is that it will distract me from my personal investments.
At this time, I don't want my real estate license. The cons currently outweigh the pros for me.
I'm defining leads as contact with off market sellers that have indicated they are interested in selling. In addition to these, we have lists of potential properties that we haven't converted yet.
A few questions:
-have any other investors found themselves in a similar position? Did you do anything with your excess leads?
-do I have any legal options other than wholesaling? I'm in New York. I've read just about every post on bird dogging and the information seems to be mixed. I know I can't broker deals without a license, so it seems I'd be forced to get these properties under contract?
Thanks!
We get more leads we can possibly handle.
We have been tossing them away. But like you, we are getting fedup with that.
So now we are looking to hire a wholesale team here in CT so we can just pass the leads over to them.
If your lead flow is significant, like ours, then hiring a dedicated wholesaling team is worth it I think.
If these leads are just coming in on and off and are not reliable like clockwork, this may not work.
We have been tossing them away. But like you, we are getting fedup with that.
So now we are looking to hire a wholesale team here in CT so we can just pass the leads over to them.
If your lead flow is significant, like ours, then hiring a dedicated wholesaling team is worth it I think.
If these leads are just coming in on and off and are not reliable like clockwork, this may not work.
Oh, this is great info. I'm not super interested in developing my own wholesaling systems because it doesn't really align with my long term goals. I find myself intentionally killing our deal flow because we can't absorb it and it always feels a bit unprofessional to do this to sellers we've had multiple points of contact with. I probably should have added one of my biggest goals with this is to keep our lead generation system moving along even when we can't absorb all of the deals ourselves.
Did you create this team and are you managing it, or are you handing these deals right off to them?
@Jamie Brayton, maybe the real answer is to ramp up your operations to support the lead generation. What's holding you back from doing so?
This was absolutely the best advice in the thread, ramp up your systems and operations as you have a problem that most people don’t and most of us would be seriously jealous of your problem. As to advice on wholesaling, just make sure you check the laws in the state of NY regarding how you would do that legally. Assigning contracts by locking them up, publicly advertising them for a buyer, then getting paid for that is considered brokering without a license in many states. So get someone on your team with a license or do it in a way that does not violate the laws. Acting as a “manger” as suggested above is just another name for brokering without a license and I don’t suggest it unless your state allows it.
Moderator Note: There is absolutely no deal making, soliciting, or requests for members to contact you directly in the forum threads outside of the marketplace forum. It is a violation of forum rules and the terms of service you agreed to when you joined this site. We have had to remove several solicitations in this thread already.
Note to Jamie Brayton - some of your posts were deleted not because you violated the rules but your posts copied other violations and request for them to contact you or you them are not allowed. Thank you.
@Jamie Brayton, maybe the real answer is to ramp up your operations to support the lead generation. What's holding you back from doing so?
This was absolutely the best advice in the thread, ramp up your systems and operations as you have a problem that most people don’t and most of us would be seriously jealous of your problem. As to advice on wholesaling, just make sure you check the laws in the state of NY regarding how you would do that legally. Assigning contracts by locking them up, publicly advertising them for a buyer, then getting paid for that is considered brokering without a license in many states. So get someone on your team with a license or do it in a way that does not violate the laws. Acting as a “manger” as suggested above is just another name for brokering without a license and I don’t suggest it unless your state allows it.
Moderator Note: There is absolutely no deal making, soliciting, or requests for members to contact you directly in the forum threads outside of the marketplace forum. It is a violation of forum rules and the terms of service you agreed to when you joined this site. We have had to remove several solicitations in this thread already.
Note to Jamie Brayton - some of your posts were deleted not because you violated the rules but your posts copied other violations and request for them to contact you or you them are not allowed. Thank you.
I know that both you and Jaysen are correct and it is the hardest advice to receive. As Jaysen pointed out-- adding to my plate doesn't solve the bandwidth issue. And since we are taking the time to find good deals that match our criteria, we should be working to absorb them.
I do worry about the brokering without a license piece. And since this is not something that aligns with my goals long term, I don't know that getting my license at this time is particularly helpful.
Sorry about the posting/copying issue!
True which is why I suggested as part of your systems and team, add a licensed agent to your team to offload the extra you can’t handle and at the same time, continue building your bandwidth. I so want to be you right now! LOL
True which is why I suggested as part of your systems and team, add a licensed agent to your team to offload the extra you can’t handle and at the same time, continue building your bandwidth. I so want to be you right now! LOL
That is a good thought. To date, I've experienced a lot of resistance from sellers when I've mentioned that this is the right property/we don't have the capacity to purchase it, but I'd like to connect them with someone who might be interested. I suppose I could work on the delivery since I've put absolutely no thought into it until right now. Thank you for this feedback!
My pleasure Jamie, happy to help.
@Jamie Brayton
When generating the leads, do so as a llc that is new.
If you want to pass the deal on, simply sell the lkc to the buyer .the llc would be in contract, not you. By being in a lucrative contract, the llc, and the deal, should be marketable.
I'm neither a realtor nor an attorney, but I believe this would work.
A real estate license doesn't really have any cons that I am aware of. The most important thing is that you have MLS access to properly comp. Figure out what you really really want in this business.
@Jamie Brayton - we are in the same boat. We'll flip 40 homes this year and list another 20-30 on the retail market.
However, that means that we have 300-400 verified sellers that we drop the ball on every year because we can't pay what they need.
My imperfect solution so far is two-fold:
1. we have an in-house real estate agent that helps retails buyers & sellers
2. lock up the wholesale deal and refer it to another wholesaler in the area to market. (*I disclose that I'll be assigning the contract to the seller). The other wholesale takes a referral on the deal and I don't have to worry about marketing the property.
We've been pretty happy with the solution so far but still have many leads fall through the cracks.
Jamie, what type of marketing are you doing that lead you to this “problem”?
Figure out what you really really want in this business.
This is solid advice. Finding a focus in real estate has been challenge from the start. We're working with so many different asset classes and keep every aspect of real estate in-house, so continuing to narrow my scope is important. I'm constantly looking for new ways to grow (evidenced by this post) and I'm certain I'm often just creating more work for myself.
I actually hope you disagree with me and shed some light on this, but in addition to not having the time/need/desire to get my license, I think it would have hindered many of my conversations with sellers to date. Most have some sort of problem they want solved quickly and the thought of having to prepare their property to go to market is enough to make them sit on it forever. I'm asked all of the time if I'm an agent and often met with a "good" when I say no. Now, I do think a good agent could probably calm a seller's nerves quickly. Interested in your thoughts!
@Jamie Brayton - we are in the same boat. We'll flip 40 homes this year and list another 20-30 on the retail market.
However, that means that we have 300-400 verified sellers that we drop the ball on every year because we can't pay what they need.
My imperfect solution so far is two-fold:
1. we have an in-house real estate agent that helps retails buyers & sellers
2. lock up the wholesale deal and refer it to another wholesaler in the area to market. (*I disclose that I'll be assigning the contract to the seller). The other wholesale takes a referral on the deal and I don't have to worry about marketing the property.
We've been pretty happy with the solution so far but still have many leads fall through the cracks.
This is actually a wonderful system. After considering all of this awesome feedback I've received I've realized I DO NOT WANT TO WHOLESALE. The thought of finding buyers feels exhausting at this point. Leveraging other people's strengths is really smart. And I'd really like to see sellers get what they want out of our interactions even if I'm not the buyer. I really just want to keep refining my own system.
Jamie, what type of marketing are you doing that lead you to this “problem”?
This is completely underwhelming, but our biggest edge is leveraging out local connections. We're really tied to the communities we work in and we've done a ton of real estate and non-real estate related work in our areas, so that carries us pretty far.
Jamie, what type of marketing are you doing that lead you to this “problem”?
This is completely underwhelming, but our biggest edge is leveraging out local connections. We're really tied to the communities we work in and we've done a ton of real estate and non-real estate related work in our areas, so that carries us pretty far.
Haha, I was hoping for a marketing secret!