My Wholesaling Journey-- hopefully this will be a LONG thread.

My Wholesaling Journey-- hopefully this will be a LONG thread.

Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes

Hi all,

I am in the process of starting wholesaling. After a previous stint financing a couple real estate projects in '08, I petered out. Recently, I've since decided to focus again, but this time in wholesaling. My intent with this thread is to keep me focused. I've been inspired by many of the success stories on various threads and hope being engaged on this thread will help push me through the trials and tribulations.

I've read a TON of posts and here's where I am:

Knowledge: Reading the BP blog, BP posts & BP Podcasts have been very valuable. I have also read every blog post by Sharon Vornholt ( [REMOVED]) & Seth Williams ( [REMOVED]). I have also read a couple books and recently very stupidly bought a $700 guru course in my local REI club on subject to. It was stupid because the course overpromised and really under delivered. There was no substance whatsoever.

Interestingly though, it was a good thing I bought this course because it was a good reality check: I can spend a ton of money on books/courses that may or may not be worthwhile, OR I can spend that money on marketing and gain real knowledge when I need it. I learn much quicker when a potential check is on the line. I recently heard that "Knowledge without action is entertainment". So, I'll figure it out as I go.

Marketing: I will be sending a monthly DM YL campaign to absentee out of state SFR owners. I plan to hit this group every month as a sustained effort over time. Initially, I will be sending ~1200 per month broken up weekly. My first drop will be end of next week. My goal is to effectively work as many leads as possible and will be testing my CRM, phone dialogue and negotiation. Once I get up the learning curve, I want to scale my marketing up much more. I plan to focus on other criteria as well.

Because there is a huge learning curve in too many aspects, I am outsourcing my YL campaign (thanks Jerry Puckett). Yes, I could do it cheaper myself, but I want to leave this aspect to someone who is an expert. I do not want to wait months and money to find out I had the wrong starting point (wrong list, wrong message, wrong font, wrong stamp, etc). I really admire the people handwriting many YL's weekly-- there's no way I could do that and learn the other aspects of the business well. My goal is to become successful at wholesaling and I am fully aware of the many difficulties. I want to accelerate my learning curve and suspect too many newbie's give up because there's too much to chew on.

Lead collection: I am using Zoho as my CRM. It is free, has a lot of features and gets some pretty good reviews. I use salesforce.com in my normal dayjob and Zoho seemed comparable in terms of features. Salesforce isn't worth the monthly cost for a one man shop, IMO. Zoho handles direct mail campaigns and lead tracking. What I like is that I can automatically attach correspondence via email and can really focus on my leads.

Website/Squeeze page: In the process of building both. I bought Chris Cho's squeeze page and for $67, it seemed like a no brainer-- no need to reinvent the wheel. I will be building a more detailed and elaborate website for buyers/sellers and investors.

Networking/Mentors: I've met a number of people at my local REI clubs. Some more helpful than others. I have one full time wholesaler that is willing to help me through deals. She and I farm different areas, so it seemed like a good fit. I also have a rehabber that wants to "help" me wholesale deals, in return for 1/2 fee. I may use him as I know that he is a local player and the education on tougher deals may be worth it. I also want to rehab, so I am thinking that I can get him to teach me to rehab for a first look at my deals.

Where does that leave me?
1. Need to learn the process a little better
2. Need to get comfortable on the phone talking to seller
3. Need to learn comps and rehab costs better
4. I don't have a buyers list, but am i wrong in thinking that in this market, a good deal will sell itself? I do have a few contacts from my REI club.

That's about it for now. Sorry for the long post, but hoping that there's many more to come.

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Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
13y

Its just life making sure you really want it badly. I look back at those days now and smile, I'd be lying if I didn't also remember those days of being nearly in tears over a situation or a deal just taking me out at the knees.

This is a business for the warriors, you have to want that first check more than you want to breathe. It will happen, keep it up!

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  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    So, it's been a wild couple days. I received 15 calls so far out of 324 YL's for a 4.6% response rate. Very happy with that and I'm sure I'll get more today. That said, I'm awful on the phone. It's harder than I thought. Was a little down last night but am looking to get back into it today.

    So, a few questions/comments:
    1. I am getting a lot of callers offering me very inflated house prices. For example, one guy offered me his house for 280k and the least he would consider is "265k". It looks like he listed his house last year for 200k and removed the listing. I can't see any reason why his house is worth more than 200k.

    So, what do I do with people like this? Do I even call them back and tell them what I think I can pay? Obviously would be much lower.

    2. I am also getting a lot of people who don't claim to know or want to give up specifics on their house. One guy didn't know the mortgage amount. Another guys told me to check the # of BR's and baths online. What's my response?

    Something like this? "Listen, I'm a serious investor and can pay cash for your house, close quickly and take care of closing costs. BUT, I need to know exactly what I am potentially buying to make an offer to you. Without knowing, I can't make an offer. Is this fair to you?"

    This makes sense to me now, but I definitely didn't control the conversations. Or should I say something differently.

    3. I am very inefficient. I am spending a ton of time figuring out what a property is worth. I am also spending a lot of time trying to get my CRM to work, but it's not built for speed. Will likely revert to a lead spreadsheet. I think a CRM makes sense longer term, but I have too many moving pieces that I am trying to figure out all at once.

    4. My "mentor" wants me to cough up a bigger % of deals for him to do more hand holding. Not sure it's worth it. I have no problem splitting deals with him, but more than that? I think I can find someone else. I offered him to keep 100% of short sales and split wholesales 50/50. I have no interest in short sales at this point.

    5. Because I am trying to figure out comps, working leads, figuring out my processes, managing my team, etc; I am not able to work every lead. Currentl, I am only working the ones I can pick up or that they leave a VM. I will go back and eventually call the ones that didn't leave VM.

    That's it. Thanks for all the help, folks!

  • Real Estate Agent · Orlando, FL · Member since 2013 · 270 posts · 40 votes
    13y

    Brian Lane 4.6 is a good response rate. Im looking to send out my first campaign soon and was wonder what was your search criteria

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y
    Originally posted by Ceasar Blackman:
    Brian Lane 4.6 is a good response rate. Im looking to send out my first campaign soon and was wonder what was your search criteria

    Absentee Out of state
    Last recording date > 6 years ago
    SFR
    Exclude Corporate owned

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    13y
    Originally posted by Brian Lane:
    So, it's been a wild couple days. I received 15 calls so far out of 324 YL's for a 4.6% response rate. Very happy with that and I'm sure I'll get more today. That said, I'm awful on the phone. It's harder than I thought.

    Brian,
    This post is an excellent example of what we've talked about on a few different threads lately and it bears repeating here. High response rates are fabulous, but can also be disastrous if you do not have the fulfillment system in place. To those of you who are still waiting to begin this process, 15 calls is a lot to deal with, especially if you're still working full time. Brian, I know that you've done this to yourself intentionally to climb the learning curve faster.

    The one hole you're really struggling with is your ability to quickly analyze the property value. That's the main reason we preach becoming familiar with your farm area. You should be following your market closely enough to know the ballpark figures. That means watching the actives, solds an expired. I believe Jon Klaus does this daily using Realtor.com But you need to work out an arrangement to get some sort of MLS access quickly.

    Ask them to call you back when their house is worth that much...NEXT. Or: "Is that the best you can do? Really? So you're saying if I don't pay you $xxx, you won't sell me your house?" I like your response, and ending it with a question is good, but I would be a little more stern asking "will this be a problem for you? You will get better. Use the lead tracker I sent you until you get your CRM functional. It's always worked great for me. All the gadgets and doo dads are great, but the only moving piece you should be concentrating on right now is the leads you're generating. You have to learn to qualify people quickly before even thinking about an offer. I would say: I'm going to succeed with or without your help. Would you like 50% of the deals I hustle and get, or 0%? You've got folks here at BP to hold your hand. Don't get me wrong, established locals are a gold mine, and I don't know what practical help he is able to give, but I figured it out with the help of BiggerPockets and I figure if I can do it, anyone can. Just shoot them a quick text: "Sorry I missed your call! Do you have a house to sell?" But do try to respond to everyone within 24 hours or the lead goes stone cold most of the time. If they were truly motivated, they've already moved on to the guy that answered his phone.
  • Real Estate Investor · Santa Monica, CA · Member since 2012 · 29 posts · 6 votes
    13y
    Originally posted by Dev Horn:
    Jerry Puckett - I think your advise re: attracting an agent is PURE GOLD. Do you guys hear what he is saying? If you're "just an investor", you may be throwing away leads that are very valuable to Realtors - they may even PAY YOU $100, $200+ for decent leads and that - as Jerry says - could actually pay for a big portion of your marketing!! Pure genius.

    In Southern California I have not found Realtors that are willing to pay for leads but pretty much every Realtor will pay a referral fee if they sell a property as a result of your lead. The going rate appears to be 25% of the commission but hungrier agents will pay more.

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    Jerry Puckett.... thanks, great advice as usual. I've been using your spreadsheet, but would like to connect on how you use it. It's definitely built for speed... my crm has too much bells and whistles.

    So, I had a few more calls this afternoon. I did a better job controlling the conversation. A couple unmotivated sellers and one guy who called me every name under the sun. lol.

    One call in particular went well. An out of state landlord who wants out. Property worth 320k and mtg is 270k. We will see how it turns out.

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    Quick update:

    Spent the morning following up leads. I texted 8 missed calls asking them if they would like to sell. Most have responded that they own the properties outright and when they sell, are looking for retail prices.

    The out of state landlord seems to be interesting. My "mentor" following up as this has some potential. Will keep you updated.

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    The calls keep coming in. Have spoken to a lot of sellers. Most are just curious tire kickers. I've had 26 calls, so the mathematician in me is wondering which of the 26 calls was a deal that I missed. :)

    Today, I had a call with a landlord out of state whose property has been vacant for 7 years. Too far to manage it properly with tenants. Offered me the property for 160k. ARV is 170k. I walked him through what he would get out of that if he sold it through a realtor (less realtor commission, less concessions, less repairs, less holding costs, etc). I told him repairs likely to be 30-40k, sight unseen.

    Long story short, the guy didn't disagree with my number, but he seemed to be emotionally attached to the property. Told me that he always wanted to retire there (to NJ?!?!? really?!?!?!?) as its on a lake, but his son was telling him to sell the property. This definitely doesn't fit into a motivated seller, but I can see how this guy may be down the road. Not sure what I could have done differently, but I'm guessing you can't make a motivated seller out of someone that isn't.

    In the meantime, I have been doing a lot of networking, using Jerry Puckett's advice on what to say to realtors. Lots of responses and now I have 2-3 that claim they will help me with comps. We will see how they work out.

    I am also talking to a well established NJ wholesaler about becoming a student. My current "mentor" is focused on everything but wholesales. Not sure he cares too much about helping me wholesale, but rather views me as a stream of short sale opportunities. Luckily, the more I network, the much better my resources are becoming. It also helps to have lots of leads coming in that I don't know what to do with. :)

    I am going to a local REI meetup next week. When I go, it's hard to have more than a handful of conversations. I think I am going to market to everyone there, in terms of what I can offer each potential person I am looking for. Perhaps a little marketing piece. I've seen a few people do this with good effect for hard money, etc.

    That's about it. Expecting my 2nd batch of letters to hit starting tomorrow, so looking forward to applying what I've learned in the past week.

  • Specialist · Irving, TX · Member since 2013 · 57 posts · 3 votes
    13y

    Brian L. Hey Brian watching your journey really helps rookies like me, while reading I put myself in some of those situations and wonder what will I do when it's my turn......I just built my first list and will begin my DM efforts in the coming days....I'm interested to see if that short sale led you have turns into anything......

    I worked in Loss Mitigation at a previous employer and I've witnessed and taken part of the short sale process....I would definitely look into that option....although it can be a lengthy process (FNMA) you can sometimes get a good deal

    My 2cents

    Good luck dude

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    Thanks @robert joiner. I am hoping that this thread keeps me accountable and at the same time answers my newbie questions.

    Wholesaling is definitely not easy. Two weeks in and I can see how it gets very frustrating.

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Its just life making sure you really want it badly. I look back at those days now and smile, I'd be lying if I didn't also remember those days of being nearly in tears over a situation or a deal just taking me out at the knees.

    This is a business for the warriors, you have to want that first check more than you want to breathe. It will happen, keep it up!

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    Thanks Tim G.. I know the payoff is there if I don't give up. I just want to fast forward a few months. :)

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Partner with a pro. That'll speed it up fast, real estate is a team sport.

  • Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    13y

    Tim G. , just wondering did you team up with someone local or outside your market ?

    Originally posted by Tim G.:
    Partner with a pro. That'll speed it up fast, real estate is a team sport.
  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Someone local, I have done three or four deals with them. It was critical to my success.

  • Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    13y

    just wondering
    I will keep searching
    Thank You

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y
    Originally posted by Tim G.:
    Partner with a pro. That'll speed it up fast, real estate is a team sport.

    Working on it. Should know by tomorrow.

  • Wholesaler · Brooklandville, MD · Member since 2013 · 149 posts · 29 votes
    13y

    Once you have that "first" notch in your belt everyone will start sending you friend requests on facebook and want to "partner up" so that is where the "interview process" begins

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    How hungry am I to make this work?

    Seller of this house called me today:

    http://www.trulia.com/property/3052669985-50-Laura-Dr-Cedar-Grove-NJ-07009

    I probably included a zip I shouldn't have. :)

    Me: How long has the property been on the market?
    Seller: Long time. Over a year.
    Me: That is a long time. Any interest?
    Seller: Lots of people want to see it, but no one serious.
    Me: What is the least you would you take for it?
    Seller: Are you serious?
    Me: Very.
    Seller: $14M.
    Me: Is that the best you can do?
    Seller: Yes.
    Me: If I walked in with $13M in cash and wanted to close tomorrow, you would turn me away?
    Seller: Probably not.
    Me: Ok, so when your listing expires again and your realtor promises you a high price again to keep the listing, call me. I'll make you an offer.
    Seller: Ok, I'll be sure to do that.

    Thanks for the script Jerry Puckett, this is starting to be fun. :)

    On another note, am hooked up with a fulltime wholesaler. Small upfront fee and 50% of deals. Well worth it IMO. This guy does a lot of volume.

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    13y
    Originally posted by Brian L.:
    Thanks for the script Jerry Puckett, this is starting to be fun. :)

    You are more than welcome...just keeps getting easier doesn't it? By the time you've talked to 100 people you'll be an old pro.

    Originally posted by Brian L.:
    On another note, am hooked up with a fulltime wholesaler. Small upfront fee and 50% of deals. Well worth it IMO. This guy does a lot of volume.

    And that ladies and gentlemen is how we network. Brian is taking the same path to success that I did. Came to BP, got laced up by some folks who really knew what they were doing, then dove right in.

    Brian, you're doing great. Keep building those crucial connections. You will reach a point of critical mass when everything just explodes....then falls right into place. I've seen it happen over and over again.

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y

    Thanks Jerry. Wish I got the $14m house under contract though.... :)

  • Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
    13y

    congrats Brian
    " On another note, am hooked up with a fulltime wholesaler "

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Shoot I should be charging a fee.

    I am realizing today that my time helping others is very rewarding but I need to limit to those who are most motivated since its a time drain I cannot afford currently.

    Keep kicking ***.

  • Real Estate Professional · Salt Lake City, UT · Member since 2010 · 608 posts · 163 votes
    13y

    Brian L. the script from Mr. Puckett is great and made me laugh. I to, quite by accident, have began a relationship with a very successful full time wholesaler. I have ended up giving up some of the profit on some deals I have wholesaled via my wholesaler friend rather than rehabbed myself; but in my case, it has opened up many doors of opportunity. I have made more money working with him vs without him. I am not exclusive to him, rather we work together when it is mutually beneficial. I think you are very fortunate to have found your relationship with a mentor. I also bet the only reason he wants money up front is to push the not so serious out of the way.

  • Real Estate Investor · Hagerstown, MD · Member since 2013 · 276 posts · 107 votes
    13y

    So glad I found this thread. I am laying my foundation for exactly what you are doing.

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