All Forum Posts by: William Johnson

@Kent Arrendell...while I hate Analysis Paralysis, I might suggest that you haven't necessarily spent the time to educate yourself on the right things.  If you have spent 6-months educating yourself, you shouldn't be asking what your first step should be.

I'm really not trying to be harsh or discourage you.  However, wholesaling is a really tough avenue to start out with, and you have the potential to make a mess of things for yourself and the sellers you encounter, if you don't enter into with the right knowledge.

You need a business plan.  It doesn't have to be elaborate, but you need to undertake the discipline of actually writing down...

• Your goals
• What strategies (wholeselling) you will employ to meet those goals
• How you will execute those strategies (i.e. Create a website for lead capture, mail 1000 letters per month, etc.)
• How you will measure your progress
• How will you contract on houses you find (i.e. Simultaneous Closing, assignment of contract)
• What your criteria will be for analyzing deals and what your threshold is for something being a "deal"
• How will you market your deals
• To whom will you market your deals
• How will you structure your wholesale deals to investors (This will be really important as you find deals and develop a "core" group of investors who will purchase the majority of the properties you find.)
• What types of properties will you target
• What areas (you need to pick no more than 3 manageable ares to start, where you can become an absolute expert in those sub-markets) will you target for your marketing campaigns
• How will you facilitate your marketing (internet, direct mail, door hangers, bandit signs, all/mix of the above)

If you had done this, you would know exactly what your next step should be.  Getting a phone number is the slam dunk part.  It takes 3 min on Google Voice.  What would happen if that phone number rang?  Would you know what to do?  Do you have contracts to use?  Do you have any clue how to vet a seller?  Do you have clue 1 about how to estimate potential rehab costs, if you had a chance to view a property?  You better have a clue, and you better be pretty darn good, because if you offer me a property and tell me it needs approx $20k of rehab, then I tour it, and it needs closer to $35k, there's a good chance that will be the last of your properties I bother with.

Again, I'm not trying to be harsh.  That's why I took time to write down the types of things you need to have ironed out, before you start.  There are tools for estimation in the File Place, and Contracts can be found there as well.  There are tons of information to fill in the blanks on the podcasts and in the blogs.  This shouldn't take that long, but you have to lay the right foundation, before you start building the house, or it's going to crack.

I would be happy to talk to you about any or all of the things I mentioned above (and I'm sure I forgot plenty).  Feel free to give me a call or email me using my contact information below.

Hattie

The good news is that successful Realtors come in all colors, sizes and personality types.  The bad news is that it is difficult to predict which will be 'successful' and which won't make it to their 2nd anniversary in the business.

Here is the best advice that I can give you: get up, get dressed, go to work.

In other words, treat it like a REAL JOB.  Set your alarm, beat your manager in to the office in the morning, dress sharp, listen intently to the experienced agents.  If you do these things, you will be ahead of 90% of the other agents out there and those experienced agents/managers will send business your way to encourage you (I know that I always send a hard working rookie business whenever I can because I want to see them succeed).

Plan to have little to no income for 6 months, maybe more.  Don't spend a lot on advertising initially but instead tell everyone you know and meet that you are actively building your business and ask them 'who do you know that is getting ready to buy or sell a home?'.

Pick up the phone and start making phone calls.  Friends, family, classmates, former co-workers.  Expired listings, for sale by owners, absentee owners, cold call a neighborhood.

Best of luck to you, Johnny!  It is a career that rewards those who work their tail off.  : )

Real Estate Myths. I am glad my Mentor @Karl Krentzel is willing to tell me the truth so I can get deals DONE.  Her are a few myths he helped me DEBUNK

1) Myth #1 Realtors mess up deals and are a waste of time.

False - Karl has always encouraged me to work with Realtors. I am working with one now on a deal and she has been great. She found my ad on craigslist, called me up, listened to what I have to say and brought me a buyer. Now that She's involved she is keeping everything moving forward quickly and efficiently.

Extra Credit Question: Who do you think was using a higher ARV. The Buyer with the Realtor who gets to list the house after rehab or the average fix and flip investor?

2) Myth #2 - MAO = ARV *0.65 - Repairs . What a joke. I love this formula because it helps me be competitive in my market. My competition used that formula on this deal and his offer price was 50k less than mine. Plus to top it off. ARV and Repairs is completely made up. Your taking two numbers that are completely arbitrary and up to massive interpretation and then popping them in a formula to determine your offer price. COME ON. At the end of the day you need to know your market to learn where the prices should be.

3) Myth #3 - State contracts are stupid. Wow, I have learned the hard way that things run so much smother if on a state contract. As a wholesaler you are selling CONTRACT not houses. So it is fair to say that a better contract is worth more. We determined above that realtors can bring buyers. Strong buyers in fact. Do you think it is easier to sell that buyer with a Realtor a State Contract or a 2 Pager? Use a state contract and your buyer pool opens up tremendously.

4) Myth #4 - You need to know how much the repairs are, and the ARV so you can advertise your deal. What a joke. You think buyers agree with your repair cost estimates and ARV? Why waste your time. When advertising this deal I didn't include either. Here is the property. Here is What I know, Here is my Asking price. Don't think for your buyer.

I can think of multiple examples in my business when these 4 myths have been debunked. It feels good to know the truth

Hope some of you can benefit from this insight.

Anyone who gives a blanket answer, yes or no, is blowing smoke out their @ss.

The fact is that this depends on state law, and at least sometimes on state administrative rules.  So the answer depends on two things.  First, exactly what activities are you defining as "wholesaling?"  Second, where are you operating?

There are people who will try to push some sort of global "get-out-of-jail-free" cared (or, "get out of trouble with the state RE commission free" card), telling you that the Constitution protects wholesaling (not true), or that any contract can be assigned and that contract law will trump regulatory law (not true), or that by signing a contract you create an equitable interest that always and forever places you beyond the reach of state law and regulation (not true.)

The real answer to the question, then, is "It depends."