New to wholesaling. Good way to start?

Question

Hello! I'm new to real estate investing, and obviously I hear a lot about wholesaling being a good and cheap way to start/break into rei. Is this true?

Also, I plan to do it exclusively in my area(Metro Detroit). I think the wholesale game overall is saturated with people sitting at their computer mass cold calling and emailing potential sellers. I think taking a local "better the community" approach is more appealing for sellers and buyers. I'm guessing a lot of people are taking this approach. Thoughts?

Jonathan Greene · Answer

I wouldn't go out thinking you are a wholesaler because they are a dime a gaggle in Detroit. Go out with the thought of being a local home buyer. If you are low on money, find some money partners at meetups and build relationships. The best wholesalers in the country aren't wholesalers, they are local home buyers who are good at marketing and can't take down all the deals they lock up so they wholesale some. Use that mindset instead of wholesaling.

Sam Spoerl · Answer

The real key in my opinion. Step 1:network with local investors but go to learn not to get a buyers list. If you get a good deal and make friends they will be more than willing to help you.

step 2: learn the laws shouldn't take to long. It's a pretty simple AI question. "If you can wholesale in your state"step 2: Pick three targeted list to go after. Look up how to find motivated sellers and stick with three once you find them. Otherwise you will get caught up in always trying to find the new best way

step 3: how are you going to contact them. Now learn those laws of what regulations your state sets up.

step 4 grind. Work hard and don't stop.

Eric N. · Answer

Wholesaling is just like any other business. Many people try it, but only a few succeed. There’s no such thing as an “easy” business. That said, it's still better to run your own business than flip burgers at McDonald’s—or even work at a prestigious law firm, grinding through 60,000 pages of discovery and drafting a brief that references every point, all while being harassed by a toxic boss in the kind of corporate environment that’s become far too common in America.

If you think wholesaling is going to be easy, you'll be disappointed—and likely fail, fast and hard. It’s not easy. You’ll have to think through your entire operation, test and refine your marketing strategy, put in the work to talk to sellers, qualify leads, negotiate prices, lock up deals, find cash buyers, and stay on top of the legal side to ensure your contracts are enforceable. You also have to protect yourself from shady buyers who want to undercut you and dishonest sellers who try to go around you once you’ve brought them a buyer.

It's a high-stress, time-consuming effort—but that’s true of any business worth pursuing. And because wholesaling has relatively low barriers to entry, the space is saturated with people chasing a new “gold rush.”

Still, if you approach it with discipline, the right mindset, persistence, and dedication, there's no reason you can't succeed.

One more thing: everyone has an opinion on the “best” way to run your business. But ask them for specific advice and most will disappear—either because they don’t have the time or they see you as competition. That means you need to be independent, resourceful, and self-motivated. Talk to people, network, watch YouTube videos, and keep learning—but don’t expect miracles. It takes real work, discipline, and grit.

Money isn’t the first priority—it’s the last. There’s plenty of capital out there, both hard and private, if you know how to use it wisely. What really matters is your brain and your character.

Drew Sygit · Answer

In most states, wholesaling is technically illegal as you are operating as a real estate agent without a license.

That said, it's done all the time with apparently little enforcement:(

There's also a LOT of competition with many operators spending $10k+/month on marketing.

How will you compete with these?

Read our copy & paste advice below and modify as needed:)---------------------------------------------------------------------------------------------

Why does everyone want to chase strangers – and ignore their own personal network?

Which do you think will be more competitive, buying from wholesalers or your own referrals?

Per this NY Times article, the average American knows around 600 people.
https://www.nytimes.com/2013/02/19/science/the-average-american-knows-how-many-people.html#:~:text=The%20average%20American%20knows%20about,do%20you%20know%20named%20Kevin%3F

Per the US Census Bureau, the average American moves 11.7 time in their life, which based upon an approximate lifespan of 84 years, works out to be about every 7 years.
https://www.census.gov/topics/population/migration/guidance/calculating-migration-expectancy.html#:~:text=Using%202007%20ACS%20data%2C%20it,one%20move%20per%20single%20year

So, if the average American knows 600 people and they each move about every 7 years, that means that the average American knows around 85 people that move in any given year.

How many of those moves do you want to be involved in?

To maximize the number of transactions you’re involved in you will need to:

• Be Top of Mind when they think about moving - which requires consistent reminders.
• Be seen as an Expert – which requires a consistent message and Evidence of Success stories
• Gain their Trust – which requires communicating with integrity

So, start out by CONSISTENTLY posting what you are doing on whatever social media channels you currently use. Not on any? You better fix that! You may also want to figure out which channels your family & friends use the most and get on those if you’re not on them currently.

What should you post?

How excited you are about what you’re doing in real estate investing! Share stories about your successes AND challenges. Then, ask them for their help!

IMPORTANT: do NOT ask people for THEIR business, ask for referrals! Why? Because they will get defensive if they feel you are pressuring them. Remember, they can always refer themselves😊

Use one of the ideas below to trigger who they know that they could connect you with:

• Just inherited a home
• Had a loved one pass away
• Is behind on their mortgage or tax payments
• Has a relative that can’t take care of their house anymore
• Has a house they’re having trouble selling
• Is facing bankruptcy
• Knows a probate attorney
• Knows a bankruptcy attorney
• etc

Putting this in OVERDRIVE

Create a spreadsheet (Excel or Google Sheet) listing everyone you can think of that would recognize your name or face.

Why a spreadsheet?  Because later, you can easily upload to a CRM like Constant Contact to create an email list!

Create columns for Name, email, cell and even Street Address, City, State, Zip and then contact info: Last Contact, Relationship, Status.

Then start calling these people. Divide the number of people on your list by 20 - and that’s how many you want to try to target daily.

Whether you get ahold of them or leave a vm, use 1-3 of the above triggers for referrals.

Why only 1-3 off the list per contact? Because on average, we can only remember three things at a time. If you try to go over the whole list, you’ll lose the attention of the average person and they won’t remember anything!

It should only take you about a month or two to contact everyone on your list and then the tough part – you start all over again.

Be sure to also ask what social media channels they are on and connect with them there.

Why the repetition? Because it takes repetition for people to remember things and you have to be top-of-mind when they encounter a potential client for you!

Have you ever been to McDonalds? Of course you have! So, why is McDonalds still spending billions on advertising?

One more tip – people remember stories that trigger their emotions. So, tell a story of how you (or a fellow wholesaler) helped a seller out with their challenge(s). Change your story each month as different stories will resonate with different people AND use each story to emphasize one of your “who do you know…” questions.

One last thing – we recommended you create a Status column on your spreadsheet, now we’ll explain why. If you find someone that seems to know a lot of people needing your services, wouldn’t it make sense to focus more resources on them? Conversely, you will run into people on your list that just seem to be a waste of time, so you’ll want to avoid them. So, create status codes for both of these and a few in-between codes to help you work smarter, not harder.

Eric Gerakos · Answer

I'm of the opinion that for most new investors,  wholesaling is a colossal waste of time and energy. The idea that it's a quick and easy way to raise money to invest is simply not true.

Stephen Morales · Answer

Wholesaling is a fantastic way to get into the industry and eventually pivot into your own investments. It takes a LOT of effort and way more capital then you think to create a system to generate life changing income. Don't be fooled by how easy some make it look. I would give yourself 60-90 days of runway both timewise and budget wise. Also, every market is saturated with wholesalers. You're always going to run into competition, it's about outworking and being consistent to get results.

James Wise · Answer

Holla

Ericka Williams · Answer

detroit is tough market. Had 5 rentals there 6 years later sold them all. my midwest rentals in cleveland have proved to be great the SAME 6 years. If I would you I would work on cleveland and detroit at the same time if your budget allows or time allows.

Juan Fernandez · Answer

Hunter, Now remember there is a way to do this... there is an art and a ton of psychology behind wholesaling! You need to make sure you listen to the pain points on why someone is selling their home. If you have any questions please feel free to reach out to me I have been wholesaling for going on a little shy of 11 years doing this full time solo! Been interviewed on my success over the years on how I am able to get a signed agreement every week so I know what I am talking about! Hope to hear from ya!

New to wholesaling. Good way to start?

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