All Forum Posts by: Braden C.

@Edgar Soriano Get an inspection from a reputable company. I am almost done with a flip that needed a completely new system. We had a company come out and tell us that everything looked really good but they couldn't do a complete check unless they pumped the tank. Two weeks after closing we got the devastating news and lost a huge chunk of our potential profit. After everything was said and done it ended up costing us around $17k, I had some quotes for over $30k.

One of the more well known gurus has or had a course a couple years ago that taught people to be "instant gurus". In his hype video he admitted that he never really did real estate but always told people he had made millions. 

People are looking for get rich quick courses and there's plenty of them out there. 

@Richard Holzhauer like @Nick Boullion said, it's a pretty loaded question. Each market is going to be different with several different factors. In my market, we need to send approximately 1,000 letters in order to get one deal, on average. You might be in a very competitive market where it's necessary to send 2,000 letters or your number could be less. Your budget will depend on how many letters you need to send in order to start creating revenue for yourself. 

As with anything in life, you probably won't start out as a great wholesaler. So it's going to take time and persistence with your mailings in order to get your acquisition costs down. 

We work with a lot of very successful investors and one thing that sets them apart from others is being consistent with mailings. I constantly see people buy a list with 500 names, send out one letter and then give up when they don't get a deal. 

Good luck! 

A very refreshing thread/question that isn't asked nearly enough by those who want to get into wholesaling. Your initial numbers sound reasonable, however you should be prepared to not get a deal and have the flexibility to either lose that $5,500 entirely or spend more money if you feel like you can eventually make the business work. 

Obviously in addition to your $5,500 for the business, you should have AT LEAST six months of living expenses saved up as well, unless you plan on continuing to work a job. 

New wholesalers often don't plan ahead and find themselves in a bad financial situation quickly. That situation turns into desperation and they'll put just about any "deal" under contract in hopes that they find a buyer. Now, they send out a bad deal to their cash buyers list that they've worked so hard to build and instantly lose credibility. 

It sounds like you're properly planning and thinking ahead, good job!

@Matt Bell Driving for dollars is a great way to find deals, especially if you're good at really digging for information. I have a few employees but I still personally D4D myself. From my experience, most wholesalers who can compete with us on the volume of direct mail we send won't drive for dollars anymore and rely mostly on their letters. They're either too busy or not willing to put in the work (it is boring and you can get car sick quickly). 

I can usually come back to the office after 2-3 hours with a list of 50-75 potential deals. It takes my assistant a day to go through the list and weed out the bad leads. Once I have the good leads, I'll do as much research on each property as possible and find out everything that I can. If I can get one deal from that initial list of 50-75, I am very happy. 

It sounds like you might be doing them a favor. If they're living in a house that's a fire hazard, they need to move. More than likely, they don't have renters insurance so if a fire did happen they would lose all of their possessions, or much worse, someone could get hurt or killed. 

I 100% agree with what @Wendell De Guzman said. A HUGE part of being a successful investor is being a good problem solver. Almost nobody sells at a wholesale price unless they have a problem, great investors or wholesalers figure out a way to solve the problem and in return, get a discount on the property. 

If you want to wholesale the property, just assign the contract. Your name and address will never be recorded in public records. You've already said that it's cheap enough to be a tear down so I don't see any problem with getting a buyer to take the deal sight unseen. Just obviously be upfront with potential buyers about the situation. 

Buy the property at land value with a slight discount for the hassle of dealing with the tenant situation.

If you're on a limited budget, then I would suggest driving for dollars. We send out 2,000 letters per week just for ourselves but we'll still do some D4D from time to time. Yes, it sounds tedious but we got one deal last year that netted us over $50k, so the work was well worth it. 

Keep track of the areas you drive in and create a spreadsheet with all of the leads. When driving, look for properties that appear either very run down or vacant. When you spot a vacant house, look at the front windows and see if there's paperwork hanging from the inside. If there is, it's 99% of the time already controlled by the bank, so in your case you should just move on. 

Research the properties and find out who owns them, if they have a mortgage, and if there's equity. Once you identify your strong leads, send them a letter and always FOLLOW-UP. If you can, find a phone number and call the person. 

Remember, if it was easy, everyone would be doing it. Most people see wholesaling and think it's a fast and easy way to become rich, I can assure you that it's not. It takes a lot of work and a certain type of personality. You can make a lot of money but it's not going to happen overnight. Most people give up before they get started.

I would say 95% of people who get started wholesaling fail. As @Edgar U. said, treat it like a business and you'll have a much higher chance of being in the 5%. Learn your market, create a business plan, have the necessary working capital, etc.. 

Always remember, if it was easy everyone would be doing it.

It's all about what your time is worth. I think if you're handwriting the envelopes, it will take quite a bit more than four hours. It currently takes us about an hour to do 1,000 letters, which is with commercial equipment that does everything for us. Our equipment prints everything, stuffs, inserts, seals, and stamps. 

If you're just starting out, doing it yourself might be worth it. There's a lot of satisfaction with doing it yourself, even though it's terrible work :).