Is it normal to Take 6 to 9 month to Wholesale?

Question

I notice a lot of members saying it take 6 to 9 months to actually find and close a Assignment Deal. Is that the norm?

Thank you to any response..

Christopher Salazar · Answer

I got a property under contract two days ago and assigned it yesterday. It can be done very quickly if it is truly a good deal and you go out there and take action. I took a couple of months to learn everything I could before I went and out did anything. But when I did, I was prepared for the most part and everything started to click.

Educate yourself (I did through the forums and podcasts) and be confident. Go out there and make it happen.

Good luck!

Patrick Britton · Answer

well, perhaps think of it like this:  to close a deal requires 2 accepted offers (assuming half accepted offers result in a deal), to get 2 accepted offers, you have to make 3 times the offers, so you have to make 6.  to find 6 properties to make an offer on, requires speaking with 4 times that, so 24.  to get 24 calls or leads requires sending out or making inquiries on 10 times that number, so 240.

Looking at it the other way around, you'll need to send out 240 letters or make 240 inquiries from whatever lead source you have or use, like craigslist FSBO ads.  Of these 240 inquiries you will speak with 24 people or 10% over the course of a month or so.  You will find only a quarter of these people have properties worth making some sort of offer on.  So of those six, only to get accepted and of those to you only find one end buyer/investor.

Now consider the time involved: if you're outsourcing the letters then your time is probably 60 minutes maximum to draft, upload, and choose preferences.  Each call could take anywhere from one minute to 60 minutes so that if we average that out, let's assume 30 minutes per conversation.  So 30 minutes times 24 people equals 720 minutes or 12 hours.  Don't worry, these 12 hours will be spread over the course of a month.

Of these conversations only 25% will warrant further investigation and if you have everything set up, you should be able to do some preliminary numbers on a property within 30 minutes (assuming you're not interrupted by kids, work, etc.).  6×30 minutes is three hours.  However, to get all the documents ready to make an offer takes another 30 minutes, so there's another three hours.

Of the six, hopefully 2 get accepted and then it's a race against time to find a buyer.  Depending on the deal and your cash buyers list, finding buyers who are interested in the property and would like to inspect it could take as little as five minutes.  But let's assume you spend another 60 minutes blasting out the information to your network.

You will most likely have to answer some basic questions from your buyers list before they agreed to visit the property, so let's say there's another 60 minutes spent on that.

Inspecting the property with a potential buyer will probably take another 60 minutes, if not 90.  You will have to do this twice so let's be very conservative and say that you spend 180 minutes "inspecting" the property with your buyers.

Last but not least, I'd say you have a buyer who wants the deal.  It will take anywhere from 45 minutes to 2 hours to complete the paperwork, go to title, get everything copied, and officially sign the contract over to the new buyer and make sure everyone is aware of the assignment.

Thus, your procedure looks like this:

60 minutes marketing

720 minutes (12 hours) qualifying leads

180 minutes research

180 minutes preparation and submission

60 minutes marketing again

60 minutes qualifying buyers

180 minutes for inspection

120 minutes hours to wrap things up

so that results in a grand total of 1560 minutes or 26 hours.  Ideally, your assignment fee will be at least $5,000 making your de facto hourly rate $192.

However, this number assumes a vast array of independent variables, each of which have their own set of independent variables.  So this is a very, very basic estimate.

I know someone who put in three hours work and walked away with $7500.  Then again I know someone who worked for months on end it only may $2500 after everything was said and done.  But, the more you can systematize your process, the less time each of those aforementioned procedures will take and thus the higher your hourly rate will be.

I hope this makes sense and helps.

Joseph Ball · Answer

When I find a deal, if I haven't sold it in 7-10 days, I go nuts. Once, I even consumed an adult beverage, in frustration over one that didn't sell in a week. If the deal is good (and, as a wholesaler, you should only offer great deals!), it should go in a couple of days. That assumes selling it for cash to a buyer-seldom to an end-user.

Patrick Britton · Answer

@Kirk R.

hey Kirk.  your area may very well a poor area for wholesaling.  i would make the argument that mine is too.

here's why:  in a seller's market with, for instance, under 3 months' supply/inventory your normal seller is going to see properties being sold for full retail prices within very short periods of time.  because of this, they have no incentive to offer to a "real estate investor" who will "pay cash and close within 10 days" with a 20, 25 or 30 percent discount.  no friggin way.

as well, take a look at where most wholesalers are located and/or where most wholesaling appears to take place.  or rather, look where it does not:  Manhattan, San Francisco, Seattle, Miami beach, La Jolla CA, and pretty much the more expensive areas of any other city.

i'm not saying that it's impossible to wholesale in those areas, but if i am an ultra motivated seller, and i need to sell ASAP, (and i know that demand >>>> supply), i will get a listing agent and simply tell them that only cash offers will be accepted.

last but not least, take a look at when this concept of wholesaling really took off.  it appears that it only really started to gain traction and the attention of gurus in 2010 and 2011 - when the market was still in the toilet and buyers had a huge advantage over sellers.

to use a poor analogy imagine if i owned Apple stock and the market was either going down or sideways.  i would most definitely be more interested in selling quickly, and even at a discount than if the market and my shares' values were rising.

i think the effectiveness of wholesaling is determined by a number of things, including demand vs supply, direction of overall prices, value of average home, price of average listing and average days on market.

don't get discouraged though, try your marketing efforts in an area that isn't as pricey, hot, etc., as yours and see what happens.  based on what i've seen, when prices are relatively low, say under $150,000, there's a lot of inventory (supply > demand) or whatever is listed has been sitting on the market for a long time (avg. DOM is +4 months) you might have a good wholesaling market.

just my 2 cents based on actual experience in getting and not getting deals.

Debra Leeson · Answer

“Progress isn't made by early risers. It's made by lazy men trying to find easier ways to do something.”    ~ Robert A. Heinlein

As an "experienced beginner" I know that the first deal is hardest.  It does take time to learn a new skill. Once the new skill is firmly in your thoughts, it takes to implement that skill. Once the action begins, it takes time to improve.......

Troy Fisher · Answer

OP -Original Poster

Wayne Woodson · Answer

I took me 3 years to do my first one but this was back in 2008. There are a number of factors that have to be considered when a person says "it takes x amount of time to wholesale a property" . Those factors include.

Confidence level and mindset

Amount of marketing

Negotiation skill

Work Ethic

There are some wholesalers that get a deal on their first mailing. Does that mean everyone is going to do that? No.

Patrick Britton · Answer

the single most important factor in determining when you get your first deal is ACTION. if you are constantly doing something that will bring you closer to a deal, then it's just around the corner.  if you sit at home reading books, articles and how-to videos all day and all night, but never do any real action, you will never, ever get a deal.

6 - 9 months may have been a good number for those people.  for others, it can be a lot shorter, it all depends on activity.  and then there are the perpetual students who never get a deal because they are scared.  plain and simple.  fear of failure and success is holding them back.  these people lean on the "i don't want to make a mistake" crutch.

remember what Alex Baldwin;'s character in Glen Gary, Glen Ross said "it takes brass balls to sell real estate."  :)

Mary B. · Answer

It depends on the person. Particularly if they are newbies and need to be educated and get comfortable with talking to and meeting with people. They need to find their niche. Everyone won't be fast learners. Everyone won't easily be able to talk to strangers. So for someone to tell that it took them close to a year to do their first deal its not surprising nor is it far fetched.

If you don't know what you're doing and you're just finding any ole house and shopping it to wholesale doesn't mean that its a deal. I imagine many newbies do this and get turned down by buyers because the numbers don't work. Anyone can find houses for sale that are listed. Maybe they aren't good at finding off-market properties. Which is what most cashbuyers want because they have already seen whats listed and don't want those.

There are several factors involved to why someone may take 6 to 9 months to find and close a wholesale deal. I've listed a few but there are some others.

Kudos,

Mary

Wayne Woodson · Answer

@Kirk R.  I spent well over a thousand but made 3 thousand. This was doing 100 postcards a week straight for 3 months.

Is it normal to Take 6 to 9 month to Wholesale?

Most Popular Reply