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!

See this reply in the discussion

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  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y
    Originally posted by Gary Parker:
    I also bet the only reason he wants money up front is to push the not so serious out of the way.

    This is dead on. Prior, I had been against upfront fees as I thought it didn't align the interests in a mentor/mentee relationship. However, he asked for a very small amount (compared to most fees I've heard) only to ensure I was serious.

    I haven't even written the check yet and he has guided me to push a conversation that I would have let die on my own. I think it's 50/50 I get it under contract.

  • Real Estate Investor · Weehawken, NJ · Member since 2012 · 79 posts · 19 votes
    13y
    Originally posted by Mike Webb:
    So glad I found this thread. I am laying my foundation for exactly what you are doing.

    My advice is to jump in and market. Get on the phone and mix it up. You will never know enough prior to jumping in. You will learn it much quicker when you have to.

    Last week, I was scared to get on the phone with anyone. Today, I had a seller of a $15M house on the phone. I went all out on this call because I knew I had nothing to lose. What came out of it? Absolutely nothing. But, on the other hand, if she did bite.... who knows? I have to treat every call like this one today.

  • Wholesaler · Three Rivers, MA · Member since 2013 · 77 posts · 4 votes
    13y

    Brian L. Well played sir! Keep up the great work. Don't give up on this post either, be sure to finish it with your results, It's like reading a book one chapter at a time...Can't wait for the next one! I'm in Western/Central Ma maybe we can have lunch some time or something.

    I commend Jerry Puckett on his success, his marketing, and the fact that he is willing to provide insight and support here on BP! Watch for the next BP Podcast this Thursday, Don't miss it, you may get some advice from Jerry too!!!! Thanks again Jerry ;-)

    Tim G. Thank you for offering your expertise! People like me wouldn't even begin to put a price on what folks like you do on BP every day!

    BP has opened my eyes, and expanded my horizons. I am in it every day and I see things growing, building, and morphing into a much more cohesive structure than I ever could have imagined! I never could have even imagined the direction things have taken and the way my vision has taken form. The problem with trying to plan every step is that you have to have the experiences, pitfalls, advice, and revelations that naturally come as a direct result of moving forward before the end result takes shape. I intend to be the wholesaler who does the volume in my area, as well as the service provider who has the connections to pull it all together in a heartbeat for the out of area investor for a rehab flip or buy n' hold proposition.

  • Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Brian L. - Love the thread.

    I think you should keep the old guy, retiree with the lakehouse engaged. I think you have a shot to close that one.

    His comments reveal he is motivated ... just not action oriented. His family says sell and he cared enough to mention it to you. Also, he's not done what he had planned, retire there. If he doesn't do something in the next month, would he be willing to sell? Does he care to listen to his family?

    Ultimately, you're selling a solution - cash fast, simplify life, prepare my estate ... Fast cash is easy to id. It's both a reason to sell and a reason to do it sell NOW.

    You might write up an official offer with your rationale and see if this moves him to do something. Or, establish a timeline for his doing something with the property so the reason to sell now grows as he continues to do nothing.

    Good luck!
    Rick

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

    Thanks Rick Baggenstoss. Think you are right. He's definitely in my follow up group.

    Been fielding a lot of calls and definitely gewtting better on the phone. Once I'm proficient on the phone, likely passing off initial qualification to a VA and will ramp up marketing.

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

    "You can't make a seller become motivated."

    So true. I'm getting tons of calls. I whined to Jerry Puckett earlier today that I wasn't getting calls from this weeks mailing. Almost immediately after, my phone started ringing off the hook. Sorry, Jerry. :)

    I can now easily differentiate callers as to whether they have any motivation whatsoever. I am also much more confident on the phone now. The trick is trying to get off the phone with unmotivated sellers quickly. A few more weeks and I'm thinking of ramping up my marketing and using my VM to prequalify sellers. I know, I know, I will miss some leads, but I want to have a large volume of DM going out and I can't possibly talk to everyone. Why not only deal with the most motivated?

    Right now, the vast majority of my calls are some variation of:
    "I wasn't considering selling until I got your letter. What's your offer?"
    "I don't need to sell. When I do, it will be with a realtor."
    "I wanted to see if you were a scam."

    A small percentage, only 2, were VERY motivated so far. However, these are both shortsales.

    If I can differentiate motivated from unmotivated and am comfortable on the phone, should I ramp up marketing now or wait? Currently doing 1200 yl's a month and thinking about 3-4k.

  • Real Estate Investor · FL · Member since 2011 · 586 posts · 360 votes
    13y

    Brian L. You might have already said this but I didn't read the entire thread so I am just responding to your most recent post, do you work full time? If you do, then I understand the prescreening with the VM, if you don't then you should be able to handle the call volume. Like you said, you'll lose leads by not answering. I do 1,000 letters per week and take all the calls, as long as they're made at a reasonable hour.

    You might want to consider rewording your letter to do the prescreening for you and avoid the time wasters altogether.

  • Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
    13y

    Where are you at in your journey in wholesaling your first deal?
    Here's another way to find good deals. Look for your city's building code violations list. It's harder to get and that's why MOST investors don't look for it - and this means practically NO COMPETITION for you.

    With code violations, I literally got a deal for $1 and I sold it the next day for $3,000 profit.

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

    Braden C., yes I work fulltime. Right now, this is just a hobby.

    Wendell De Guzman, I am still looking for my first deal. 3 weeks into my dm campaign. Have mentor and outsourced yl campaign. I'm looking to expedite the process

  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    13y
    Originally posted by Wendell De Guzman:
    MOST investors don't look for it - and this means practically NO COMPETITION for you.

    That might have been true a year ago, but not any more. Probates, Evictions, Code Violations, all used to be nice little niches. But the data is getting easier to get, and the competition is getting more fierce.

  • Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y
    Originally posted by Brian L.:
    Braden C., yes I work fulltime. Right now, this is just a hobby.

    Wendell De Guzman, I am still looking for my first deal. 3 weeks into my dm campaign. Have mentor and outsourced yl campaign. I'm looking to expedite the process

    I know you are working you butt off, so take this with a grain of salt but I truly truly believe this in my core.

    You must treat this as a business, not a hobby. Maybe you chose that word in passing but this isn't a business for the faint of heart and its not a hobby.

    Claim it! Its a business, you are in the business of wholesaling!

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

    Tim G., hobby isn't the right word. By "hobby", I mean that I haven't made money yet doing it, but no means indicates the way that way that I'm treating this business.

    I am very actively working on leads, improving my phone skills, improving my negotiating, improving my systems, etc. I'm sure this gets easier at some point, but I know that I have a lot more work to do to get to that point.

    AFter one month, where do I stand?
    ~1200 letters sent (the last batch of ~300 should hit today/tomorrow)
    -107 calls so far (will be higher once the last batch hits this week)
    -Vast majority are retail sellers
    -Many are just curious about how my business works
    -Many won't give me any price guidelines and just tell me "make me offer". (still trying to figure out how best to handle these)
    -8 potential short sales (farming these out)
    -1 potential wholesale. Pristine townhouse ARV 290-300k that I think I can buy for 200k. I think I botched this a little early on, which is why it's not under contract. I also have a couple other sellers that want to sell cheap, but not cheap enough yet. I'm sure that this number would be better if I didn't botch a lot of calls early on.

    Response rate is very good. While I understand that it takes several months for most people to do a deal, I'm not too happy with myself. I didn't expect a deal, but realized I was a lot more unprepared than I thought prior to my first mailing. Call volume was much more than I anticipated and with a full time job, it's just not feasible to answer every call. 3 weeks in and I got slapped on the wrist at work for taking too many calls on my cell in the hallway.

    What did I accomplish so far this month?
    -Gained mentor and then upgraded to someone else whose interests are aligned with mine.
    -Have also been able to leverage mentors' systems
    -Now have a full buyers list (from my mentor)
    -Got much more proficient on the phone
    -Can do "quick and dirty comps" via free resources
    -have VA to weed out unmotivated sellers

    Overall, I'm in a better place, but the more I learn, the more I want a deal. I can sense motivation, but all the motivated sellers I have spoken to are all short sale candidates.

  • Wholesaler · Santa Fe Springs, CA · Member since 2009 · 219 posts · 83 votes
    13y

    Hey Brian L.,
    Can you elaborate on how you work with your VA to weed out unmotivated sellers.

    I am looking to start a mail campaign, and want to make sure I use my time wisely.

    Brian W.

  • Wholesaler · Three Rivers, MA · Member since 2013 · 77 posts · 4 votes
    13y

    Hey Brian, if someone says "make me an offer" and I haven't done the research I would say, "I would love the opportunity to make an offer on your property, I would certainly prefer to do this in person, I want to make sure I can give you a fair offer. What time should I stop by?" This gives you two things...an appointment(bring a contract) and a chance to comp it out. Repairs can be an issue starting out, are you working with a GC? I would take them along.

    My two cents...I'm still new to this game myself, but that is my personal opinion.

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

    Thanks Jason Brooks. I'm working with a mentor and not so worried about repair costs at this point. Once I have a truly motivated seller, he will help me figure out repair costs.

    Brian Wall-- my advice, and take it with a grain of salt as I am new, is to take as many calls as possible as you can. I spoke to Jerry Puckett yesterday about this. I spent 3-4 months preparing to wholesale. After those 3-4 months, I sent my first DM campaign. I learned more in the 2 weeks after the DM campaign started than the 3-4 months prior. Unfortunately, I was taking so many calls at my day job that I got my hand slapped twice. If I had a choice, I would still pick up every call for now. I pick up as many as I can, but not every.

    So, here's what I do: I have a vm that explains exactly what I am trying to do and essentially that I can close quickly for less than market value. If they leave a vm, i either call or pass to my VA.

    my VA has been trained to ask a bunch of pertinent questions about the house and how to gauge motivation. My mentor has trained them well. I wouldn't have a VA do the work until you knew it down cold.

  • Wholesaler · Phoenix, AZ · Member since 2013 · 36 posts · 7 votes
    13y

    Awesome job! Im super excited for you, and that makes me confident that I will do great! Your doing a great job (Hey whats a VA?) it sounds like that means you have someone taking your calls. I want to make sure I take all my own calls I use to be a telemarketer so Im good on the phone if Im knowledgeable of my product. Also a script is highly important heres one I found copy it and make it your personality. Good luck! (This is from a thread from BP) Love this place!

    In your real estate business, it’s critical to your success that you learn to ask the right questions when someone calls. When you get the right information every time, it will help you to quickly determine whether or not you are dealing with a motivated seller. Always bear in mind that even thought this person isn’t a motivated seller today, it doesn’t necessarily mean that they won’t be motivated in the future. Time and circumstances change all things.

    I have a rule of thumb that I follow regardless of which category they fall into. So long as the house is one that I am interested in buying, I keep them on the mailing list until one of these things happens:

    I buy the house.
    Someone else buys the house.
    They ask to be removed from my mailing list.
    That’s it. Don’t disqualify someone because they aren’t a motivated seller today. Keep on marketing to these folks. I have bought houses several years after I started marketing folks. Absentee owners that are “long distance landlords” are a group of people that sometimes become very motivated after a tenant trashes their house one too many times.

    What Questions Should I Ask?
    You should always use a standard Property Information Form to be sure that you don’t forget anything when a seller calls. I like to keep a stack of them on my desk. If you do that, you will always get the information that you need. Some of the things I have on my Property Information Form are listed below.

    The Sellers Contact Information
    Their name, phone number and email address; try to get all of their phone numbers.
    The property address
    Be sure to get the name of the person that actually owns the house. Often the person calling may not be actual owner or the decision maker.
    Ask whether the property is vacant or occupied. If it’s occupied, who lives there? Is it a tenant, a relative etc? This will have an effect on how you can access the property.
    In the far right corner of my Property Information Form, I list the referral source and the type of referral:
    -DM –Direct mail campaign
    -PR – Probate
    -AO – Absentee Owner
    -Other Type of Referral (Bandit Signs, Referral, Ad etc.)
    -What state do they live in?
    It is important especially when working with absentee owners, to know which state they are calling from so that I know which time zone they are in. I don’t call them too early or too late.
    PHONE CONVERSATION TO A SELLER
    ****The Property Information
    The number of bedrooms and baths
    The style and type of construction such as “brick ranch”
    Whether it’s built on a basement, slab or crawl
    When the kitchen and bath(s) were last updated
    Types of flooring: carpet, hardwood or other type
    The ages of all the major systems such as the roof, HVAC, etc.
    The type of fuel used for the heating system
    Be sure to find out if all the utilities are on in the house
    Ask them what repairs and updates they would do if they were to live in the house. You will be amazed at the information you will get just by asking this one question.
    Try To Determine Their Motivation
    How long have they owned the house?
    Why are they selling? Probate, absentee owner, facing foreclosure (What’s their motivation)?
    What is their asking price? You want to find out what their “expectations” are.
    How much the house is assessed for? A lot of the time sellers have no idea.
    If the house is listed, if so who has it listed? When is the listing over? Ask if it’s OK to keep them on your mailing list just in case the house doesn’t sell.
    Do they have other properties to sell? Never forget to ask this question.
    Existing Mortgage Information
    You want to get specific information on what (if anything) is owed on the house. You may find out very quickly that you can’t help this seller no matter how motivated he is especially if there is no possibility of a short sale.

    Figure Out What Your MAO Is
    I have this right on the bottom of my form. I list the ARV (after repaired value) and the dollar amount of the repairs needed. Since I am a wholesaler, I also have a place to list the wholesale fee I want; "Me". These figures will tell me my MAO or my "maximum allowable offer".

    I have set the form up so that I can put two sets of figures in this area. What I will do is figure the MAO for a complete rehab, and a "to rent" MAO. Landlords won't necessarily do the same level of work that a rehabber would do for a retail sale. Some won't do any updating at all; they will be OK with a bathroom that has pink tile if it is in perfect condition. After all, they won't be living there. Doing this second MAO gives me another way to "create a deal" if I can't get the seller quite as low as I need for a rehabber to buy this house, and I have landlords that would pay a little more.

    Related: BP Podcast 012 : Wholesaling and Marketing with Sharon Vornholt
    Other Tips
    When you talk to any seller, not only do you want to find out their motivation is, but you want to know if they have a “number in mind” to just walk away and be done and to be rid of this headache.
    What problem do they need YOU to solve? Always remember; it’s never just about the money. When they have given you a number, wait a little bit before responding. Then ask them, “is this is the best you can do”? Once again, just wait. Wait for them to speak first.
    You will be amazed at the number of people that will immediately drop their asking price significantly. Finally, ask them what they will do if they don’t sell the property; if they get stuck with this unwanted house.
    I have uploaded the form that I use in my business in the BP File Place. You will find a number of good forms there that you can use. Just pick one and always use it.

  • Homeowner · Duluth, GA · Member since 2013 · 1 post · 0 votes
    13y

    @Brian L. Sounds like you have really come a long way! I just hope you don't get into too much trouble at work. Lol

    @Carlos Ayuso VERY helpful post, especially for those who are not too comfortable on the phone!

  • Richland, WA · Member since 2013 · 18 posts · 0 votes
    13y

    Brian L. Really awesome results! I've read every page so far - it's killing me to wait to see what's next for you. Good luck with the potential deals. You might need to start taking your calls in the men's room. Hey, you gotta do what you gotta do to reach your dream, right? :D

  • Peoria, IL · Member since 2013 · 967 posts · 383 votes
    13y

    Brian L. - Just a thought - minimize costs until you are making money. Not sure how to do this with YL.

    1200 YL? about $600 to $1200? Any way to do this cheaper?Feasible to walk my dog and drop off letters in the door?

  • Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    13y

    The stuff that Carlos Ayuso posted came from this linked blog post by Sharon Vornholt:

    http://www.biggerpockets.com/renewsblog/2013/06/18/talking-to-sellers-property-information-form/

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

    Brian L. great work so far, I'm curious though do you think you could reduce the amount of tire kickers by adjusting your YL maybe ?
    Also how long are you typically spending the phone with each caller ?

  • Wholesaler · Phoenix, AZ · Member since 2013 · 36 posts · 7 votes
    13y

    Brian L. How do you answer your phone calls do you say hello or business name? This is what I’m going to do when I start. If the Seller wants retail price. Find relators to get a percentage from each lead you give them say25%-50% (Not just wholesaling to flippers) If the Seller wants retail…. get a RE AGENT, phone Number on my speed dial, and meet seller with contract along with RE AGENT or something like that. (Im new so if a pro can give some insight how this can be possible) What did you say on your DM & YL cards? I want to say the samething? :)
    Waylon Robertson Thanks

    Steve Babiak Thanks for the link I was just surfing on BP at the time I didn't remember the link.

    Jason Brooks if someone says "make me an offer" and I haven't done the research I would say, "I would love the opportunity to make an offer on your property, I would certainly prefer to do this in person, I want to make sure I can give you a fair offer. What time should I stop by?" This gives you two things...an appointment(bring a contract) and a chance to comp it out. Repairs can be an issue starting out, are you working with a GC? I would take them along.
    (Good one thats on my notes)

  • Colorado Springs, CO · Member since 2013 · 6 posts · 0 votes
    13y

    Brian L.- I just read the entire post and I think you are doing an amazing job. My only question to you is where did you get your leads from. I was writing my own YL and getting my Absentee List through city sources...it was not only time consuming but redundant. I appreciate what you are doing and look forward to hearing about the first check you will get!!!!

  • Alok SoodPro Member
    Investor · Chatham, NJ · Member since 2012 · 56 posts · 39 votes
    13y

    Great thread of information. Inspires me to get started as I've been getting lost in the details of what I need to get things moving. Thanks for sharing and look forward to the updates. Wish you much success!

    -Alok

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    13y

    Brian, your wish is granted, it's now a long thread, go get'em! :)

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