The kind that makes money! That’s probably the first thing that comes to your mind.
That is the ultimate goal not only for wholesalers but real estate investors in general. But there are other things to consider besides profit when designing your ideal business. Creating an ethical business should be a given. But if you going to create a wholesaling business that is not only profitable but one that is in alignment with your other goals both in business and your life, you will have to give this topic some serious thought right from the beginning. So what kind of wholesaling business do you want to create?
The 20 Best Books for Aspiring Real Estate Investors!
Here at BiggerPockets, we believe that self-education is one of the most critical parts of long-term success, in business and in life, of course. This list, compiled by the real estate experts at BiggerPockets, contains 20 of the best books to help you jumpstart your real estate career.
Setting Up Your Ideal Business
There are some key questions that you need to ask yourself when you are setting up your ideal business.
1. What type of property have I decided to focus on? You have to drill this down until you are clear on this question. Is your choice:
- Low Income Neighborhoods
- Bread and butter neighborhoods
- Properties for “move up” buyers
- Luxury Properties
- Multi-family or commercial properties
These types of properties can overlap to some degree, but it’s better to be known as the “go to person” for a particular niche especially in those early years of your business. Remember when we talked about creating your “expert status”?
2. Does this decision reflect the types of property my current cash buyers on my buyer’s list want to buy? If you don’t know the answer to this question, then call them up and ask them.
You need to be able to answer these questions:
“Do I need to build a different type of buyer’s list that will have my ideal cash buyers on it?”
If the answer is yes then ask yourself the question,
“What do I need to do today to begin this process?” What are the top 3 ways I can start immediately to build or expand my buyer’s list?
Be aware that this answer will be likely to change for at least some people on your list over time. It’s a really good idea to have some system for keeping in touch with your buyers on your buyers’ list from time to time.
As A Wholesaler, What do I want my ideal life to look like?
The answer for a single person may likely be a lot different than it would for a man or woman that has small children. Being a wholesaler is not a passive income strategy. If you are not careful, you will find yourself in a very demanding job, quite possibly like the one you worked so hard to leave behind (if you have managed to escape the 9 to 5 already).
Different folks will have different goals so it’s important once again to nail down exactly what you want and then go about creating that. It’s all too easy to just start marketing, taking calls and find that you are “letting life happen to you”. Once you understand that you can control how your business works and how it will affect your life on a day to day basis, you have taken the first steps toward creating a real business.
This is one reason it is so important to decide right from the beginning what your niche within wholesaling will be, and what you want your business to look like.
A Wholesaling Case Study
Here is an example for you. I have a friend up north that has built a great business wholesaling low-end properties. It’s not unusual for her to close multiple deals every month. These would typically be deals that would net her $3,000-$4,000 each. I would say that she is a “volume wholesaler of low cost properties” rather than one that wholesales more expensive properties (that would net her a higher wholesale fee on fewer properties).
She is known as the go to person for these types of properties in her area. She has built herself a buyer’s list of nothing but real estate investors that are looking for these types of cheap, good “cash cow” types of properties. She coaches other folks on how to do the same exact thing that she does. So that is one way that she finds her deals; through her coaching students.
Direct mail marketing and bandit signs are two of the main marketing strategies she uses, and she gets a ton of calls; calls which were taking up almost all of her time. The high volume of calls meant she was always working in her business, rather than on her business.
In her niche, she was able to find a VA in another country and train her take those calls, and also to do the initial screening. Her callers/motivated sellers are expecting a less sophisticated person on the end of that phone than someone that was looking to sell a high end property. She understands her business model and what she needs to be successful.
My Wholesaling Business: Learning to Outsource
Beginning the process of outsourcing some of your duties is a very big part of setting up your ideal business. Being the “type A” personality that I am, I will be the first one to tell you it was hard for me to outsource things in the beginning.
I like to compare it to the first time you hire a babysitter for your new baby. You fret and worry incessantly that “they won’t do things as well as you do”; “that something terrible will happen” in your absence. When you finally muster up the nerve to hire that first babysitter you quickly find out that everyone is safe and things went just fine. You will almost immediately think about scheduling your next “date night”. It works exactly the same with outsourcing. There are many affordable options for outsourcing too.
Once you manage to let go and outsource that first task, you will feel a sense of freedom that is indescribable. Slowly that feeling of being in a constant state of overwhelm will begin to subside. Then and only then will you be able to work “on your business” rather than “in your business” every hour of every day. This doesn’t happen overnight. But the sooner you begin to take baby steps to make this happen, the faster your business will grow.
Deciding on which things you want to ultimately outsource in your wholesaling business and creating plan for accomplishing this should be part of creating your ideal business right from the start. It is an important step for building a successful business rather than ending up with a painful, time consuming hobby.
Give Yourself This Gift
Whether you are brand new, a seasoned business owner, or you are one of those people that still has “a dream living in their mind that hasn’t yet fully taken shape”, set aside some time today to work on your business. Begin to create a plan that will give you back the gift of time through outsourcing.