Wholesaling: Starting Out
Real Estate Agent · Columbus, OH · Member since 2019 · 60 posts · 30 votes
Wholesaling: Starting Out
Most Popular Reply
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
6yI remember when I started out, wholesaling.
I had no money either. Boy have times changed.When I came to BP with my questions, people actually were happy to help me out.
Now everyone sets out to insult others or try to sound more like they know more than the other by stepping and pushing the other down.
You all should really take a look at yourselves. Pathetic!!
Dude, pay no attention to all these clowns.
I started with no money, and I wholesaled my way to success.
The mistake all you negative "smart people" are making is simply this.
Wholesaling is NOT lying to people telling them "I will buy your house" when you have no cash to buy their house,
Get it through your ignorant skulls. FOR ONCE AND FOR ALL!!
I FLAT out told my leads that I am NOT going to buy their house and that I was going to wholesale it. Spare me the BS whether it is legal or not. Cry me a friggin river!
I simply do not give a crap about your sand in your KooKoo about your wholesaler hate you got going on.
That is what I did. The sellers happily gave it a go! If you need to get a private money lender to back you up so you can make it "legal" just do what you need to do. I did it and I had no money of my own to buy anything. I was honest so the seller knew exactly what they were risking and it all turned out great
Now, I have plenty of success and I started with no money!
So go figure!
47 Replies
- 6yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
There are four questions concerning wholesaling as it is commonly defined on BP
1. is it investing? No, it is a real estate related job, or a real estate related business, but it is in no way INVESTING.
2. Is it legal? this is subject to state agency regulations, as well as the interpretations of said regulations. The real question is does it require a real estate license? Same answer as above..... depends.
3. Is it ethical, moral, etc.? Well, IMO, if you truthfully and totally disclose your intentions and ability to perform (or lack thereof) UPFRONT, then it is ethical.
4. Is it profitable, or does it provide a high per hour earning rate? For most people, no. Some have been able to turn it into a successful, profitable business, but nothing like what the people selling the $50K mentorships claim. Probably the best aspect is that the newbie has an opportunity to expand his real estate knowledge which he can hopefully use in the future for INVESTING. Not to tell others what to do, but why not get your RE license and have more avenues to earn money?
- 6yJonathan GreeneBusiness MemberReal Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
@Seth Mceleney maybe you should take a peek at my profile. Wholesalers who do not ever have money to close a deal (or a verified backer who will) will never succeed. Sure, when you get started you have less money, but you can't go in as a value play talking about wholesaling. I'm not sure if you understand wholesaling since the pitch is that you are buying their house, however, you may offsell to a verified buyer because you have so many deals, you can't do them all.
If you go in as a wholesaler with the pitch to a seller that you just want to put it under contract to give to someone else and you don't have any money of your own, you will NEVER close a deal as a wholesaler. Grow up and learn about how it really works instead of trying to Bro down in the comments. You are embarrassing yourself.
Read my comments, which were of course never responded to, because they were too real. What is the pitch? What is the value add? Can't wait for you guys to get some lessons in the real world instead of playing armchair calculator quarterback.
- Flipper/Rehabber · Winter Park, FL · Member since 2017 · 1 post · 2 votes6y
@David Denzy
Analysis proralysis wont make you any money bro, at like a tennis shoe "just do it!" If you dont offend anyone with your offer you wont make money and you wont win at the wholesale game my man. If you are worried they are offended by your letter they will just discard it anyways and btw dont tell them in the letter u are an investor they definitely probably wont call you. Be very vague and explain everything once you are at there house. Btw I made over 20k on my first deal only bc I took action so you can do this just get out of your own way and again just do it! Remember you will get a lot of No's early and it will feel difficult to fight the urge this not for you but if dont quit then you already won! I promise you 1 thing the first deal is the sweetest feeling and just gets easier from there. So go for it
- Real Estate Agent · Columbus, OH · Member since 2019 · 60 posts · 30 votes6y
@Jerryll Noorden
Right!! I believe that when starting anything the best way to do it is to just do it (any way you can). Thanks for having my back and for the inspiration. Happy for your success man!
- Real Estate Agent · Columbus, OH · Member since 2019 · 60 posts · 30 votes6y
@Joseph Pablo batka
Thanks for the support! We need more people like you in the world!
- Rental Property Investor · Buffalo, MN · Member since 2019 · 23 posts · 11 votes6y
@Jonathan Greene I wasn’t trying to hurt your feelings, I was simply saying assigning a contract (not a double close) doesn’t actually require you to pay for the house. Most wholesalers starting out are probably going to aim for the assignment route. Also go read @Jerryll Noorden ‘s comment above.
- Flipper/Rehabber · Largo, FL · Member since 2018 · 13 posts · 9 votes6y
@David Denzy don’t listen to anyone who is discouraging you. Nothing’s wrong with hustling and making money. As long as you dont break the law and dont hurt anyone you all good. Focus on finding a deal. Once you do, finding a buyer is only 20% of closing a deal. I should emphasize a DEAL, which makes sense in numbers.
- Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes6y
@David Denzy Wholesaling without any money is very very difficult. I wont say impossible because there are a handful of people who have done it but its pretty close to impossible. The most helpful suggestion I can give you is to start by birddogging for a successful investor or wholesaler in your area. Bring them the properties that you find during your driving for dollars and collect a birddog fee for doing the legwork. Or negotiate a deal where you get to be involved in the process of putting the deal together and getting it closed. New wholesalers always undervalue gaining knowledge. They want their money upfront instead of taking nothing for a deal in exchange for learning how to really do a deal.
Wholesalers need to be able to run comps (MLS comps not Zillow comps), estimate repairs accurately (or pay a contractor to give you an estimate), negotiate with sellers and be able to solve their problem. Sellers who are willing to sell their property for less than what they might get if they listed with an agent usually have a reason that they are willing to do this, and that reason is typically some kind of problem or distress (ie: foreclosure, IRS liens, probate with multiple heirs, etc) and to get the deal you need to have the knowledge and ability to solve their problem. Im not sure what market you are in but its pretty competitive in most places.
- 6yJonathan GreeneBusiness MemberReal Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
@Seth Mceleney My feelings? Ok, bro. You weren't simply saying anything, you were talking a big game without having any experience. I read that post and it's the quickest way to end your career or get in trouble with licensing or eventually get arrested. Not understanding the process of wholesaling is the biggest error in most people's business plan, including this one. Anyone who goes into a seller's house and says I have no money, but I can find you a buyer and for that I am going to get paid, is not using the correct value proposition to close and become a good wholesaler. A good wholesaler already has a buyer's list, knows who wants what types of properties, and has backing in case he needs to close the deal him or herself. If you do your first deal, tell them you have nothing and will find a buyer, and then don't, what's your reputation? Moreso, what is your value in the process?
If you read the OP and then the ridiculous statement that he hasn't started building a buyer's list because he wanted to get a property, it's amateur. If you and the OP want to learn (and not get in immediate hot water following ludicrous advice), you have to build a personal value proposition that is part of the pitch. If you have no money to close a deal, no rational seller wants to sign something with you in the hopes that you find a buyer and if you don't, it's cancelled. Just think about that. Why would they do that? If your answer is because they are desperate, you aren't looking to build a career in this, you are looking to take advantage.
Grow up, stop acting like a frat kid looking to crack jokes and get two high fives, read the real advice, and build a business plan around your business. And get backing. You can't be a good wholesaler if you can never close the deal yourself (with backing or a partner if you are broke). Your reputation will be done in a second.
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes6y
Originally posted by @Jonathan Greene:
@Seth Mceleney My feelings? Ok, bro. You weren't simply saying anything, you were talking a big game without having any experience. I read that post and it's the quickest way to end your career or get in trouble with licensing or eventually get arrested. Not understanding the process of wholesaling is the biggest error in most people's business plan, including this one. Anyone who goes into a seller's house and says I have no money, but I can find you a buyer and for that I am going to get paid, is not using the correct value proposition to close and become a good wholesaler. A good wholesaler already has a buyer's list, knows who wants what types of properties, and has backing in case he needs to close the deal him or herself. If you do your first deal, tell them you have nothing and will find a buyer, and then don't, what's your reputation? Moreso, what is your value in the process?
If you read the OP and then the ridiculous statement that he hasn't started building a buyer's list because he wanted to get a property, it's amateur. If you and the OP want to learn (and not get in immediate hot water following ludicrous advice), you have to build a personal value proposition that is part of the pitch. If you have no money to close a deal, no rational seller wants to sign something with you in the hopes that you find a buyer and if you don't, it's cancelled. Just think about that. Why would they do that? If your answer is because they are desperate, you aren't looking to build a career in this, you are looking to take advantage.
Grow up, stop acting like a frat kid looking to crack jokes and get two high fives, read the real advice, and build a business plan around your business. And get backing. You can't be a good wholesaler if you can never close the deal yourself (with backing or a partner if you are broke). Your reputation will be done in a second.
There is absolutely no need to get buyers first.
Consider this my friend.
Finding Buyers first: You are "helping" sellers, but annoying buyers
Finding Properties first: You are "Annoying" sellers, and helping buyers.
So which one is better? I will tell you...
You do both. You always are on the hunt for properties, and you always are on the hunt for new buyers.
What REALLY is just moronic.. is wait to find properties (or buyers) till you have a buyer (or a property).
Just as it is "absurd" to you to get a property first... so is it "absurd" to a buyer, for a wholesaler to contact them and "waste " their time with being spammed without any indication if said wholesaler is at all serious. You know how much I HATE it when I get calls from wanna be wholesalers that start with:
" Hey I am an investor (no you are not!) and we get many properties (no you are NOT), and sometimes we come across properties that do not fit my criteria (NO YOU DO NOT)"
Trying to lie to me making it look like they buy houses and some of the leads they are getting they wholesale. BS!!
Now THAT is annoying and absurd. Do not waste my time with a dumb phone call when you have NO damn property to sell.
I mean, why put me on your list if you do not have a property you can give me? So now you can see, that before you call others out on stupidity, you my friend may not understand the full picture yourself.
Remember, intelligence is defined by acknowledging how little you know.
Never forget that!
So .. man.. in order to really provide value to the board, do not simply assume that your opinion is the all knowing indisputable truth or fact simply because you believe it.
Call it "amateur".. and I guess then I AM an amateur.. but... I'll tell you, my dude!
it is SO much easier getting a bunch of buyers when you have a contract ready to be bought.
My advise to you if you choose to take it..
we are all on the same team... really.
Look at the OP's responses. He stayed calm and polite no matter how harsh the responses were. Always says "thank you". That is a strong dude. Admirable. I wish I could be more like that.
Now lets all write it off as NYE stress and go out with a cool bang!
- Investor · FL · Member since 2015 · 40 posts · 24 votes6y
@David Denzy
Goodness gracious. I read some of the responses and wondered why any new person (or anyone admitting to not having a bunch of money) would ever post on this site.
Many successful investors started out with that exact same question and they are doing great now. Please do not let valid yet potentially negative sounding feedback distract you from taking action starting at whatever level you currently find yourself.
And when you become successful at this, pay it forward. Read between the lines when answering questions from those just getting started. Provide great advice along with the kick in the teeth.
- Investor · FL · Member since 2015 · 40 posts · 24 votes6y
@Jerryll Noorden
Thank you! Good Lord!
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes6y
Originally posted by @Marijuana (MP) Vandyck:
@Jerryll Noorden
Thank you! Good Lord!
ALMOST right...
It should be:
Thank you, Good Lord!
I am good, indeed!
:)
- Investor · FL · Member since 2015 · 40 posts · 24 votes6y
@Jerryll Noorden
YES! You are correct sir! Thank you too!
Happy new year! Best wishes to you in 2020!
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes6y
Originally posted by @Marijuana (MP) Vandyck:
@Jerryll Noorden
YES! You are correct sir! Thank you too!
Happy new year! Best wishes to you in 2020!
Happy happy, new year to you . And may you find your freedom number this year my good woman!
- Real Estate Agent · Columbus, OH · Member since 2019 · 60 posts · 30 votes6y
@Marijuana (MP) Vandyck
I’ll be back to revisit these responses in the morning. But, happy new year to everyone that has responded! Happy 2020!
- Rental Property Investor · Queen Creek, AZ · Member since 2013 · 368 posts · 191 votes6y
@David Denzy if you truly find a motivated seller they don't care who you are as long as you can help them. Perception is truly a major misperception of those who like to analyze wholesaling as a strategy. I have only had one seller in nearly 10 years ever ask me for credentials or credibility although I was able to fulfill the request most sellers only want to know if you can help solve their problem. Its those that are greedy for gain and willing to do anything to close a deal do not last long. Remember integrity is very important and a sustainable foundation to build your business on.
Do what you need to do to get started but remember to things with "INTEGRITY"
- Real Estate Agent · Columbus, OH · Member since 2019 · 60 posts · 30 votes6y
@Marcus Maloney
Great advice!
- Real Estate Agent · Columbus, OH · Member since 2019 · 60 posts · 30 votes6y
@Marijuana (MP) Vandyck
Thank you for the support!
- Investor · Castle Rock, CO · Member since 2011 · 107 posts · 65 votes6y
@David Denzy. To solve the issue of building a list of cash buyers (they are easy to find BTW), you have options, whether a licensed real estate agent or not:
1. Licensed: Just run a comprehensive search on sold properties over the prior 12 months. Buried in the detail provided by MLS via downloaded Excel file, look for the column that shows buyer financing. You are looking for CASH buyers (sometimes just shown as $0 mortgage). Then, go look these up on county records to see who bought. The leads you want to add to your list are shown as companies to a high degree, with another high percentage shown as individuals. You will get lucky and also see buyers of multiple properties purchased during the last 12 months when they are really active. Whether entity or individual, any buyer who shows up more than a few times in your 12 month search window are very active. There will be a few on this list who can and would buy everything you can find and be able to close in 7 days or less.
2. Unlicensed: a) Know someone licensed? Just offer to pay them for their time to do the above, or, b) contact a mainstream title company in your town, who will put you on their recurring email for foreclosures, as well as the list of resulting Certificates of Purchase. As mentioned above, any company (not a lending type institution for obvious reasons) that purchases a foreclosure is very likely an active cash buyer. Using this list will also get you the leads that use short-term financing, so in effect, can turn out to be an even better, more complete list, because not all active investors pay cash 100% of the time. c) A twist on b is to just look up the info in your county's foreclosure search tool. You will discover the same info, but depending on how it is presented, this route may be a bit more time-consuming.
Either way you go on the above, including any necessary research, you will have a sizable list of investors who are both cash buyers and active purchasers of fixers. Don't try to please everyone. You can make a decent living on a small list (less than 10). I did this in Greater Denver a number of years ago and wound up with 400 good leads, all of which were buying (and selling) at least 3 properties over the prior 12 months. My short list was only 5, but any of these five would buy everything I ever had available. One in particular, was using their own staff to make offers, as well as wholesalers and closing between 12 and 20 per month!
Anyway, once built, take your newly minted buyer's list and start talking to them. Resist the urge to open discussions with investors with the usual ploy of asking what they are interested in. Just know that if the numbers make sense, they will be interested. This takes me to the other "have-to." Don't make your list of investors guess about anything. Do the research, take the pictures and do a walk-through video, disclose the material defects, get the bids, run the numbers and present your case. When you do, talk in the terms they understand; ARV, FMR, Cash on Cash Return, NOI, DSCR and so on. Also, make sure they have time to look at the property. Give yourself up to 2 weeks to be fair with everyone, but be mindful of your seller's privacy needs in terms of showings.
Until you are able to close, disclose what you are doing and what your value is to the transaction. If they won't take a contract with contingencies, write an offer that uses a purchase option, but make the option period short enough to entice them into the deal. Just be prepared to pay up a non-refundable option payment of $500-$1000 to lock up the property for the next 3 weeks or so till you get one of your new cash buyers in the saddle.
When you finally get a property under contract, be careful about providing address info to your cash buyer unless they are willing to sign a Non-Circumvention/Non-Disclosure Agreement.
Bottom line is say what you are going to do, then do it with honesty and integrity, because in these circles, it's a very small world.
Good luck!
- Realtor · Waterbury, CT · Member since 2016 · 19 posts · 9 votes6y
@Zeke Liston
Wow that was really helpful, thanks unlike some people who forget the purpose of this website is to learn and grow.
No one is born with knowledge it is acquired as we progress!
Thanks again!
Join the conversationCreate a free account to reply, vote on answers and follow this thread.