Is Wholesaling Dead?
Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes
Is Wholesaling Dead?
Most Popular Reply
Real Estate Agent · New York, NY · Member since 2020 · 62 posts · 72 votes
5yOriginally posted by @Mysonne Johnson:
Second year in real estate. My first year I been reading, learning, and even paid for a course on wholesaling but a couple months into my second year I am having trouble getting contact with sellers I have softwares I use and pay for and other free sources to acquire lists of leads and do direct mail BUT seems to always be a dead end or the seller isn’t interested. I been thinking of switching my strategy to acquire rentals but it’s almost the same process but me having money down for a loan and refinancing the deal. Any advice from investors on how they got started...
If you made a financial investment to take a wholesaling course then you should absolutely make an investment to get your real estate salesperson license. The trouble getting in contact with sellers you're having wouldn't be nearly as difficult if you had access to an MLS. You would see all the Expired listings in your region from today to however far back they go (probably would have the ex-listing agents contact info instead of the seller, but you have an address to doorknock*). Or go on Zillow and filter out FSBO's in your region. It seems to me that you're expecting the business to roll in because you paid for the course, software, etc., but there's more to it then that.
People choose to go the wholesaling route because there's no significant financial commitment but they're quickly disappointed when they get into the thick of things. In REI, especially rentals, profits margins are very thin to begin with. Now your goal is to get a contract signed significantly under market value, just so you can sell it to someone who's also looking for a "deal", while still trying to flip a profit. It's extremely difficult and in some parts of the country it's not even worth the time commitment.
Get your salesperson's license, pass the state exam, hang your license with a broker, then start bringing some real value to your clients by getting their house sold and/or bringing them buyers. You'll make more money, you can re-invest your commissions into your investing career, and it's an excellent way to learn the investing side of the business.
My goal isn't to scare you from wholesaling, if that's your cup of tea then go for it. But I feel like getting a salesperson license is more of what you're looking for rather than wholesaling. I see you're from NY (I'm NYC/LI) which is even more of a reason to get your salesperson's license. You live in a state that has one of the highest home values in the country, one closed deal can easily be a 5 figure income.
Work smarter, not harder.
30 Replies
- Real Estate Agent · Chicagoland · Member since 2018 · 314 posts · 199 votes5y
Since you've experienced selling homes wholesale and you've even taken courses on it, have you considered becoming a real estate agent? It seems like a natural transition if you already have connections. Several states are cracking down on wholesaling and making it harder to do without a license, so adapt and get one. You'll be able to advertise to more potential clients as well. Most home buyers don't look for wholesalers. Whether you want to deal with regular home buyers is up to you.
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@Forrest Williams I haven't got a deal under contract yet. I spend my 1st year learning the game now now year 2 taking action. But yes in looking to invest in getting my real estate license. I already create my LLC so that's the next step.
- Lender · El Paso, TX · Member since 2018 · 37 posts · 20 votes5y
@Mysonne Johnson as far as wholesaling, I recommend you try to find a mentor in your town. The first deal is always the hardest, but as your find your niche of doing things, it will get easier and you will be more confident, which will lead to more deals. As far as building your rental portfolio, using the BRRRR method makes it very easy to build your rental portfolio. There are Hard Money lenders out there that lend up to 100% of purchase and repairs, so very little out of pocket is needed to buy. When you refinance, the equity counts, so if you purchased correctly, you will need little to no money out of pocket on the refy. Good luck to you!
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@Cheryll Ramirez Thank you. Speaking of the BRRR method how does that go during the winter seasons? Dose everything stop and pick back up when its spring?
- Real Estate Agent · New York, NY · Member since 2020 · 62 posts · 72 votes5y
Originally posted by @Mysonne Johnson:
Second year in real estate. My first year I been reading, learning, and even paid for a course on wholesaling but a couple months into my second year I am having trouble getting contact with sellers I have softwares I use and pay for and other free sources to acquire lists of leads and do direct mail BUT seems to always be a dead end or the seller isn’t interested. I been thinking of switching my strategy to acquire rentals but it’s almost the same process but me having money down for a loan and refinancing the deal. Any advice from investors on how they got started...
If you made a financial investment to take a wholesaling course then you should absolutely make an investment to get your real estate salesperson license. The trouble getting in contact with sellers you're having wouldn't be nearly as difficult if you had access to an MLS. You would see all the Expired listings in your region from today to however far back they go (probably would have the ex-listing agents contact info instead of the seller, but you have an address to doorknock*). Or go on Zillow and filter out FSBO's in your region. It seems to me that you're expecting the business to roll in because you paid for the course, software, etc., but there's more to it then that.
People choose to go the wholesaling route because there's no significant financial commitment but they're quickly disappointed when they get into the thick of things. In REI, especially rentals, profits margins are very thin to begin with. Now your goal is to get a contract signed significantly under market value, just so you can sell it to someone who's also looking for a "deal", while still trying to flip a profit. It's extremely difficult and in some parts of the country it's not even worth the time commitment.
Get your salesperson's license, pass the state exam, hang your license with a broker, then start bringing some real value to your clients by getting their house sold and/or bringing them buyers. You'll make more money, you can re-invest your commissions into your investing career, and it's an excellent way to learn the investing side of the business.
My goal isn't to scare you from wholesaling, if that's your cup of tea then go for it. But I feel like getting a salesperson license is more of what you're looking for rather than wholesaling. I see you're from NY (I'm NYC/LI) which is even more of a reason to get your salesperson's license. You live in a state that has one of the highest home values in the country, one closed deal can easily be a 5 figure income.
Work smarter, not harder.
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@Francois G. I appreciate your advice brother. I see the term wholesale some what as a "get rich quick" as some gurus make it seem. "Follow theses steps" then boom you have a deal repeat. But that's definitely not the case. I invested lots of money marketing and softwares to still see no results and ask what I'm doing wrong. As like you said I definitely will looking into getting my real estate sales person license to get access to MLS and expired listings to bring more value to sellers and find them buyers and use the commission to my investing.
- Real Estate Agent · New York, NY · Member since 2020 · 62 posts · 72 votes5y
Originally posted by @Mysonne Johnson:
@Francois G. I appreciate your advice brother. I see the term wholesale some what as a "get rich quick" as some gurus make it seem. "Follow theses steps" then boom you have a deal repeat. But that's definitely not the case. I invested lots of money marketing and softwares to still see no results and ask what I'm doing wrong. As like you said I definitely will looking into getting my real estate sales person license to get access to MLS and expired listings to bring more value to sellers and find them buyers and use the commission to my investing.
Don't buy anything these "gurus" tell you. They're the only ones who sell this business as a "get rich quick" scheme bc they're the only ones getting rich quick from scamming ignorant beginner investors for tens of thousands of dollars.
Everything you need to know about real estate investing is right on this website for FREE. If you get into real estate sales, this site and your experience from RE sales will mold you into a sharp investor quicker than you think.
- 5yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Francois G.:
Originally posted by @Mysonne Johnson:
Second year in real estate. My first year I been reading, learning, and even paid for a course on wholesaling but a couple months into my second year I am having trouble getting contact with sellers I have softwares I use and pay for and other free sources to acquire lists of leads and do direct mail BUT seems to always be a dead end or the seller isn’t interested. I been thinking of switching my strategy to acquire rentals but it’s almost the same process but me having money down for a loan and refinancing the deal. Any advice from investors on how they got started...
If you made a financial investment to take a wholesaling course then you should absolutely make an investment to get your real estate salesperson license. The trouble getting in contact with sellers you're having wouldn't be nearly as difficult if you had access to an MLS. You would see all the Expired listings in your region from today to however far back they go (probably would have the ex-listing agents contact info instead of the seller, but you have an address to doorknock*). Or go on Zillow and filter out FSBO's in your region. It seems to me that you're expecting the business to roll in because you paid for the course, software, etc., but there's more to it then that.
People choose to go the wholesaling route because there's no significant financial commitment but they're quickly disappointed when they get into the thick of things. In REI, especially rentals, profits margins are very thin to begin with. Now your goal is to get a contract signed significantly under market value, just so you can sell it to someone who's also looking for a "deal", while still trying to flip a profit. It's extremely difficult and in some parts of the country it's not even worth the time commitment.
Get your salesperson's license, pass the state exam, hang your license with a broker, then start bringing some real value to your clients by getting their house sold and/or bringing them buyers. You'll make more money, you can re-invest your commissions into your investing career, and it's an excellent way to learn the investing side of the business.
My goal isn't to scare you from wholesaling, if that's your cup of tea then go for it. But I feel like getting a salesperson license is more of what you're looking for rather than wholesaling. I see you're from NY (I'm NYC/LI) which is even more of a reason to get your salesperson's license. You live in a state that has one of the highest home values in the country, one closed deal can easily be a 5 figure income.
Work smarter, not harder.
Very good Post Francois.. I just cringe when I hear and see all these folks on BP think that wholesaling is the way to start in Real Estate or quick cash.. can it be sure.. But its very capital intensive the way the big boys do it.. and it takes a team.. etc..
I remember one post specifically of a young couple down in Slidell LA.. talking about working for a whole year or more spending thousands
and how the deals just did not work so they referred the people who responded to a real estate agent who went on to list and sell them of course they got NO money because you cant pay an unlicensed agent and there was not enough room in the deal to flip it.
And I am thinking Geez the amount of bizz these folks scare up and then walk away from.. Listings are GOLD money in the bank. it takes a few grand to be a realtor.. I dont get it. I totally agree with your thought process..
- Wholesaler · Member since 2020 · 140 posts · 89 votes5y
@Mysonne Johnson where are you pulling your lists from, and what strategy are you using to reach out to them? I would be more than happy to try to isolate some issues if you want to send me more details.
Wholesaling definitely isn't dead. It's only growing.
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@Justin Reed I use PROPSTREAM and FLIPSTER. I use direct mailing feature in PROPSTREAM and I do massive code calling and follow up with text blasting. I also look on Zillow FSBO and Facebook Marketing for fire damage. To skip trace I use spokeo. I don't believe it is but my market is saturated. I'm not giving up on it but won't be taking it as serious. I get a call I get a call then go from there.
- Lender · El Paso, TX · Member since 2018 · 37 posts · 20 votes5y
@Mysonne Johnson "winter"? What's that? LOL. I live in the desert. I'm not really familiar with the tide of Real Estate in NY. But as a lender, my personal opinion is that winter or near the end of winter is the best time to buy, especially if you have a substantial rehab. The busy season has past and sellers often become more desperate in the winter months to sell at discounted prices. Good for the wholesaler. Also good for the flipper to buy at a good price and sell in the spring when the market is picking back up. I'm not sure what the moratorium restrictions are in NY, but when these lift, there will be a ton of homeowners in need of assistance because for some reason they thought they would never have to repay their back payments. But in reality they will have to pay months of backpay all at once. This is really where wholesalers/investors can help homeowners from the dreaded foreclosure.
- Investor · Bethel, ME · Member since 2013 · 126 posts · 52 votes5y
@Mysonne Johnson
Sounds like you’re doing a good amount of marketing. What are you doing with your dead leads (motivated sellers that owe too much to wholesale)?
- Wholesaler · Member since 2020 · 140 posts · 89 votes5y
@Mysonne Johnson To be super blunt - I think you're doing wholesaling all wrong. Skiptracing is (mostly) a waste of time. Try pulling a list from DataTree or RealQuest and sending blind offers.
- Member since 2020 · 69 posts · 15 votes5y
Wholesaling is not dead but I would say that not all parts of the United States have active, viable wholesalers. The Hartford Connecticut area could use a few good virtual wholesalers.
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@Justin Reed i was thinking the same thing.. i use a software and its so many dead leads. many people/wholesale already try to skip trace the lists I am acquiring. I’ll def look into a data provider or go down to city hall or the court to get a list.
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@James McGovern I figured. The supply and demand varies and different markets. I’ll give Connecticut a look and other city’s the need wholesaling than in my own backyard.
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@Scott Bottomley honestly nothing since I have some many leads to reach out too, I don’t come back around to follow up on the leads I already went after so basically one and done. When i should be following back up repetitively or even a couple times a month to show them I’m determined.
- Investor · Bethel, ME · Member since 2013 · 126 posts · 52 votes5y
@Mysonne Johnson
Ok. If you have low to no equity leads that you’re throwing away I’d be happy to pay you a fee if I can turn a dead lead into a deal. Generally I’m looking for nicer/newer homes and sellers that have motivation to sell but can’t wholesale it due to how much they owe. If you’re interested in paying for your marketing with your dead leads let me know.
- Flipper/Rehabber · Buffalo NY (buffalo, ny) · Member since 2020 · 69 posts · 12 votes5y
@Scott Bottomley I’ll dig them up for you. So are you a virtual wholesaler. What is your email?
- Flipper/Rehabber · Orlando, FL · Member since 2016 · 6 posts · 3 votes5y
@Mysonne Johnson
I think you want to focus on your list first, and start funneling the leads down until you find the motivated sellers. Then you want to look at the value you are bringing the people, price is not a problem when there is value behind.
- Property Manager · CT · Member since 2014 · 687 posts · 329 votes5y
Hey @Mysonne Johnson the first steps I would recommend as a new investor is to get a handle on analyzing the income, expenses and ROI of these properties in Bridgeport.
You can use the Bigger Pockets calculators to start. Use Zillow and rentometer.com to get data and analyze a few from your home to see what type if returns there are.
If these meet your investment criteria then start looking in person.Let me know if you have any questions.
-Craig - Flipper/Rehabber · New York, NY · Member since 2019 · 340 posts · 122 votes5y
Mysonne - I think wholesaling is dead because people like me. I will give you an example. Why do I need a wholesaler? To obviously find me the property. If I can do that digitally (like get leads from my website) I can contact people in distressed situations immediately. Technology and social digital interaction has moved big Fortune 500 companies into new directions. You would be naive to think it’s not doing the same for real Estate. Most of my lead captures come through out site. Anyways DM me if you have further questions. That’s my input abs it’s working well for me. Although it’s not as easy as setting up a site. However once you perfect it - it’s the gift that keeps on giving.
- Flipper/Rehabber · New York, NY · Member since 2019 · 340 posts · 122 votes5y
Not to mention the lists you buy are resold over and over - take a Hawkeye view on this process abs you will quickly realize you are in the weeds scrambling and wondering why you don’t see success.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes5y
As a property owner who is a target of wholesalers, I can tell you the number of inquiries has skyrocketed over the last couple years. Mailings, texts, phone calls, you name it. I am not saying it is dead, but there is definitely lots of people trying to do it. As an owner it creates the perception that my properties are in high demand. The news also talks about skyrocketing property values and low inventory, so it further empowers owners.
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