All Forum Posts by: Cornelius Garland

@Lisa Treadwell It would be a pleasure to speak with your son and his roommate. There is a lot of bad advice floating around regarding wholesaling. YouTube used to be a great place to learn, but now most of the wholesaling influencers are making entertaining content rather than informative content.

As a real estate agent, you can provide him with MLS access to see what houses are sold for with cash as well as cash buyers. With MLS access, he can know exactly what he needs to contract his properties for, and he'll be able to provide homeowners with accurate offers. When he gets his first deal, he can call the buyers from the MLS to see if they'd like the deal. If he wants to be proactive, he can also call the buyers to get their buying criteria. This way, he can focus his marketing efforts only on specific zip codes or neighborhoods that the buyers are targeting. Usually, the buyers on the MLS are serious and are not novices, so they'll gladly pay him an assignment fee for providing a deeply discounted property.

Please share my contact with him. I will connect with you and share my business email so we can coordinate a time to speak.

I'll try not to get him too excited as I want him to finish his studies and earn his degree! :)

@Lisa Treadwell When I first started wholesaling in 2015, I was torn over this very same thing. My father went so far as to tell me that I was "ripping off old ladies." That one stung and stuck with me.

8 years later, this is far from the truth. As wholesalers, we are really only serving 5% of the marketplace. Most of the homeowners I work with are of sane mind and not in a desperate situation to sell. They just prefer not to work with a realtor. Usually, it's because the house has extensive damage or they live out of state. I am not looking for "motivated sellers" like most wholesalers. I want to work with cooperative people who have a good idea of what investors do and already realize the advantages of working with one.

I believe wholesaling gets a bad reputation because new wholesalers have no idea what they're doing. Some of them are so hungry to close their first deal that they have no regard for the seller's wants or needs. They'll say whatever they need to do to get the deal closed.

Also, they are not knowledgeable about marketing. In reality, wholesaling is not really about real estate - it's all about marketing. Many wholesalers, both new and experienced, are not familiar with how to target their ideal avatars. I think wholesaling is a great entry into real estate, but I'd encourage your son to learn how to close a few wholesale deals himself to get familiar with going through a transaction from start to finish, evaluate which parts he's good at, and then specialize in a particular niche in investing where he's solving real problems while developing a useful skill set.

For instance, some of the guys I started with are only working probate leads where the owners are long deceased and the properties are tied up with liens. Some of these homes are sitting in limbo for decades and the city appreciates investors that clean up the title. Other people I know work specifically on foreclosures and short sales. I, personally, decided to niche down and currently, specialize in the marketing and business operations side of wholesaling (i.e., hiring and processes). 

I close deals by partnering with investors who struggle with this. I come in with my systems and my team, and I help generate leads. My joint venture partners will focus on acquisitions and dispositions (finding the buyer) while I'll handle transaction coordination. I cannot overemphasize how important it is to have a skill set that you can hang your hat on in this industry as wholesaling only works when the market conditions are right. Hope this helps.

-C.C.

 

@Jennifer Durkee Whichever service you go with, I'd ensure that you de-duplicate your list because, on a list with 10,000+ records on it, you'll likely have 200 - 400 of those as duplicate homeowner records. If it is a vacant or absentee list, you'll likely have more. 

The company I use charges 12 cents per search and has 99% hit rates (nearly perfect), so that could end up costing you $24 - $40. It doesn't seem like much, but I skip-trace 100,000 records per quarter, so the costs associated with skip-tracing duplicate records can quickly add up.

@Don Konipol Thank you for the positive feedback. This business model has been good to me. However, I started taking it seriously as a business on the first day and I've been optimizing it since then. I think I've 80/20'd it - where I'm only focusing on the income-producing activities. I keep on building on the same fundamentals and really focus on what works. I have so many people asking me "Have you tried this tool or this strategy?" I'm at the point where "if it's not broke then don't fix it." 

My business is "boring". No more drama. No more worrying if I generated enough leads today to get a deal. No more guessing if my KPIs are good. No more hoping that my employees will show up after a rough week. I get to use my free time and cash flow to focus on my creative endeavors outside of real estate as well as teaching. I only need 5 deals a month to live a good life while having minimal time involved in my business. It's doing everything I want and I could ask for from wholesaling. Sure, I could get to 10 deals a month, but that will require me to step in more than I want and hire more employees I feel comfortable with.

I will post more on Bigger Pockets because I see a lot of bad and/or repetitive advice on this topic. Again, thanks for the feedback, Mr. Konipol.

Respectfully,
C.C. Garland

 Great question. I get all of my distressed information from a non-profit called eig.org. Here's the link to the map: https://eig.org/distressed-communities/2022-dci-interactive-...

Distressed zip codes are in brown and orange. Affluent zip codes are in blue. I try to find a market that has a decent balance of brown and blue zip codes. This website has been my secret weapon over the last few years. They updated it once every 4 years.

@Marcy Ramich Yes, I would stay away from Data Zapp and Data Finder. Anything that charges 3 cents to 8 cents will give you outdated data and a lot of wrong numbers.

I use IDI data and help others skip trace their data because the contracts are costly if you're doing less than 5 deals a month.

With all the talk about AI and new advancements being made in real estate, I think now is a good time to talk about the fundamentals of running a real estate wholesaling business.

We are truly living in the time of "Shiny Object Syndrome". I don't buy into the hype. I haven't been doing this for too long, but I have seen fads and trends come and go during my 8 years of investing.

Trends and fads can get you a quick deal but there is no substitute for consistency through time-tested processes and systems. I have attached my Wholesaling Timeline. These are the 9 components that each wholesaling company needs to churn out deals on a monthly basis. I will go over each one briefly.

If you file your LLC today the very next step you want to take is researching your market. What zip codes comprise your MSA? What zip codes are war zones? What zip codes are too affluent to target? If you don't do this, you're setting up yourself for burnout. You could be dialing sellers in golf courses or neighborhoods where a deal will only net a $3,000 assignment fee.

After you do your market research, you want to pull your list by using criteria to get the best homeowners. Yes, your list-pulling tool matters. Then you want to skip trace these sellers with a quality skip tracing tool. Yes, the skip tracing tool you use matters as well. Low-quality data means you will be dialing "wrong number-after-wrong number". This can lead to burnout and dampen your spirits. I've seen many wholesalers quit because of this.

Message delivery - Are you cold calling, voice broadcasting, or doing direct mail? Whichever one you choose, just pick one or two and stick with it for 30 days. I've seen so many investors jump from marketing channel to marketing channel without giving it at least 30 days to see what works. We have to FOCUS here, guys.

Lead vetting - each lead that comes through is not worthy of your time. Some are follow-up leads - meaning you will give them a quick call today to establish communication, but will anticipate calling them back next month. Spending an hour underwriting a cold lead is downright foolish and a waste of time. Know which leads are hot and cold. This saves you time.

Lead follow-up - If you do this properly, 100 leads can yield one deal through follow-up monthly. This is very important throughout our slow months of the year, such as November and December. These new sellers you contact won't want to sell during these months, but the leads that you have been following up with over the months will be more inclined to sell with you.

Now, I'm not even going to cover acquisitions, dispositions, and transaction coordination because it seems like you all know this. These are not the only steps needed to run a successful wholesaling company. These steps are important but the wholesaling space really focuses on this heavily. I felt it was important to mention these other steps that are not as well-known.

-C.C.

@Abraham Cisneros Congratulations on starting. Many new wholesalers feel uncomfortable starting. Having a script to follow is important so you have a flow to follow. You don't want to sound like a robot, but it's a good starting point so you're not saying "uhh" or have awkward pauses on the phone.

Here are a few points I'd emphasize:
Start by asking the seller if this is a good time to talk after a brief introduction. You don't want to sound too formal but you want to sound pleasant.
Then you can transition to asking them about the property condition. It's important to ask them about this because you can use this as negotiating power to ask for a discount without seeming like it's coming out of nowhere.

Get them to talk about the roof, the flooring, the paint, the carpet, the HVAC - ask when the last time these things were updated.

It's also important to control the direction of the conversation by asking questions, but the seller should do the majority of the talking.

I'd also take time to get good at generating comps / cash offers. This is one thing that many new wholesalers struggle with. In order to identify if the seller is motivated or a tire kicker, it's important to know what distressed properties are going for in your area. You can do this by practicing comping out each lead you generate, even if the seller is cold. It may take you 30 minutes to an hour to generate a cash offer for one property, You want to get so good at this that you'll know instantly if you've got a deal or not. The seller's asking price determines if you have a deal or not - they can say they just had a hip replacement and all these other seemingly-motivated reasons why they're selling. In actuality, the only thing that matters that comes out of their mouth is if they want to sell for 50 cents on a dollar.

Also, do not be afraid to ask the seller questions that might seem inappropriate. For instance, "Do you have a loan payoff". Or "What are the tenants paying for rent?" I use these questions to gauge the seller's cooperation. If they're apprehensive about answering these questions then you know their motivation is lower than a seller that freely provides that information to you.

I wish you much success with calling. Orlando is a good market. Also, if you're finding those sellers to be too stubborn, Jacksonville and Tampa are also both great markets in Florida.

Yes, leave this house alone, especially since it's so far from you. This is the type of thing that can take the wind out of your sails. Chasing properties with no potential is a waste of your precious energy. Typically, I look for 20 or more homes sold in the last 30 days, so only 2 homes sold in the last year is not a good sign of any retail or cash buyer activity in that area. You're not missing anything by skipping over this one.