Wholesaled a Wholesale - Why Networking is so Important

You may think that other wholesalers are your competition in this business. This is true, but they can also be your biggest allies in wholesaling. Currently, the banks are your biggest competition, but that's a whole separate post :)

If you meet wholesalers at your local REIA, find out what deals they have that they are having a hard time selling. See if you can partner. Tell them about your deals and see if you can partner and let them sell. Call other 'We Buy Houses' signs. Tell them that you just wanted to network with some others that are in the business.

If you are always building your buyers list, then you will always be an asset to other wholesalers. Think about this. If you include wholesalers to your buyers list and each of them have buyers, then you've just multiplied your efforts. A lot of new people get caught up in not wanting to give away part of the profit. Look at the bigger picture. You can move deals faster and do more of them.

Another wholesaler may have a deal, but they may not have a buyer to sell it to. You can come in, save the day, and make cash in the process.

Case Study. Recently, a guy doing his first wholesale deal got a property under contract for $9,000. We felt pretty confident that it would sell for $19,000-20,000. He got a buyer from bandit signs that he put out to market the property [I wrote a post on this as well] The buyer ended up beating him down on the price, was concerned that the new guy wasn't a member of the better business bureau, didn't want to pay closing costs, blah blah blah. [Sidenote: from our experience, if someone is difficult to work with up front, then they will be difficult at the closing table as well]

My business partner told him that we could sell it for more. So we shot it out to our e-mail list. We currently use two different companies for e-mailing our campaigns, Aweber and MailChimp. [These are the companies that are used when you 'opt in' on a site with your name and email, you click a link to verify you're a real person, and then you start getting messages] Both of these companies come highly recommended by me, as I use both.

Within 24 hours of sending out the e-mail, I had 2 guys interested. We showed them the property within 15 minutes of each other. We did this so that they knew that there was competition on the property [yes, a psychology thing, but effective]. We got a cash offer of $17,000 and he said he could close within 7 days. We took the deal and ran. Our company's profit on the deal was just this side of $4,000.

Our investor friend closed his first wholesale transaction! He ended up making $600 more than he would have with his original buyer!

Bottomline: It pays to network with other wholesalers

 PS - view the rest of my posts here.