If you’ve read any of my other articles, you know I’m a believer in doing whatever you can to make the most efficient use of your time; which, in return, creates the maximum amount of freedom possible (the end goal for the majority of people getting into real estate). For the flippers out there, the one “to do” item on your daily checklist that never disappears should be:
Find a Wholesaler.
As far as I’m concerned, a wholesaler is right up at the same level of a lead contractor in terms of value. In my eyes, it’s not even really up for debate. When you look at the big picture, a worthwhile wholesaler is worth their weight in gold. If you find yourself thinking, “This is awesome! There are wholesalers all over the place!”, then take a step back, take a deep breath, and accept the fact right now it is NOT ‘that’ easy to find the type of “worthwhile” wholesaler I’m talking about.
I’m not going to go into great depth about this as there are various other quality articles on BiggerPockets about ‘what’ to look for in a wholesaler, but just a few little thoughts.
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
What To Look for in a Real Estate Wholesaler
1. They look at it as a business rather than a hobby. By doing this, all the following points will fall into place naturally (well… hopefully).
2. They provide honest/accurate data. Whether it be after repair value or rehab costs, if you are getting inaccurate (or none at all) estimates, move on.
3. They actually DO MARKETING and/or HAVE CONNECTIONS. There is nothing more of a waste of time than getting an over-inflated property that is listed on the MLS for much less than what is being offered to you. I don’t mind buying properties off the MLS from wholesalers, but it needs to actually ‘make sense’.
Think about all the time that is required to do the items listed above correctly. Here’s just a few things to get started…
1) Determining which marketing methods to use
2) Testing those marketing methods – was it worth the money?
3) Fielding phone calls – many/most of which will be dead leads.
4) Checking out properties – figuring out the numbers on them
Those are just a few items. If you are a flipper just getting started and looking for deals, odds are you are doing all this yourself as you don’t know any wholesalers. I know I was when I first got started.
I’m not saying this is a bad use of your time by any means. What I ‘am’ saying though is that it is a use of your time, and not to state the obvious, but there are only 24 hours in a day, so time is limited.
It’s all a matter of goals and circumstances, but if your goal is to free up time and focus on other things, finding a worthwhile wholesaler is a great way to do it. What are the “other things” you could then focus on? How about…
- Networking with contractors and subcontractors to really build a SOLID SOLID rehab team.
- Refining your processes so that they become even more efficient…
- Finding other worthwhile wholesalers…
- Deciding if you want to go to Hawaii or the Bahamas… 😉
Avoid This Mindset
Don’t be like me and get trapped in this mindset trap that snared me when I was first getting started: I want to save and therefore make as much money as possible, so the last thing I want to do is buy some deal from a wholesaler who is marking it up on me.
Eeeek! The logic in my thought process is/was so flawed. Do you pay more if you buy through a wholesaler? Yes. Well, kinda… It may be more, but not by much. Remember, if you are doing it yourself (assuming you do it correctly), you will be spending money on marketing, networking, gas money, etc. Add on this the amount of time you spend on it, which takes away your ability to maximize other processes, which in the long run costs you even more time, so in the grand scheme of things, you are probably just paying a tad more.
Is that “tad more” worth it to you? There is no right or wrong answer to the question. To me, yes, it is worth it. Maybe not for you though.
Listen Up Wholesalers!
There is HUGE demand for you. Let me say that again, there is HUGE demand for you! Sure, there are many wholesalers out there, but make yourself a worthwhile wholesaler and you’ll have investors beating down your door. I currently have a couple worthwhile wholesalers that I work with, and I cherish them like gold. They make my life so much easier.
I know the gurus make wholesaling sound easy. It is not. But, get a good reputation for yourself, and like I said, the investors will hunt you down… no doubt in my mind.
If you like and enjoy being a detective to find those quality properties to flip, then finding a worthwhile wholesaler isn’t going to be at the top of your “to do” list. There’s nothing wrong with that. This is the best part about real estate. You get to do what you enjoy and what you think makes the most sense.
If you want more freedom, then find yourself someone who can help build that for you: the worthwhile wholesaler.
This isn’t easy to find, but when you do, you will quickly see how much time is freed up within your day. With that being said, go make some friends!
Photo: Tami Hills