Why Newbies Have Trouble Getting Started Wholesaling (& How to Solve That)

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There’s been a lot of chatter surrounding the idea that newbies don’t know where and how to find the right people to assist them with their journey. I find this puzzling and want to introduce you to the importance of Meetup and Mastermind groups.

When I started wholesaling, I faced the same challenge, and I’ve had numerous individuals ask me: Where do I find people to connect with so I can get started wholesaling/investing?

The most popular response is go to your local real estate club. Although this is a great resource for information and meeting investors, I’ve found in my local market (it may be different in other markets) that the real estate club is filled with landlords and that not many experienced wholesalers frequent the club unless they are marketing a property — and then they are focused and don’t have time to chitchat. Again, this may just be in my market, but personally I have found the best place to go to meet investors that are doing what you strive to do is is in Meetup or Mastermind groups.

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What is a Meetup?

For those who may not be informed, a Meetup is a group of individuals who have similar goals and ambitions, similar to a real estate club and Mastermind, but with some differences. A Meetup is normally designed to have a facilitator, a presenter, and the group. The presenter may have a topic of choice to discuss. Oftentimes a Meetup is a platform for networking and open dialogue. Please read this article on networking first so you will be prepared before going.

I frequent Meetups often because they’re a great source of information and a great environment in which to network. Unlike with real estate clubs, there is a diverse group of investors that joins. There are wholesalers, agents, landlords, note investors, financiers, escrow agents, and novices. Also, you can get a review of the market from others’ points of view.

Related: The Ultimate Beginner’s Guide to Real Estate Wholesaling

You can find a local Meetup by engaging on Biggerpockets or by visiting Meetup.com.

What is a Mastermind?

A Mastermind is a bit more intensive than a Meetup; a similar concept, but a lot more personal and engaging. The Mastermind is formulated to ensure you set goals and milestones and accomplish those goals. Also, your Mastermind group will hold you accountable for tasks and responsibilities. In this small setting, there are 8-14 participants, and it’s an open forum to discuss how to help each other in business.

Already prevalent in the business arena, Masterminds are becoming more popular in real estate. In some ways, they follow the same approach the gurus use during coaching sessions; however, in a Mastermind you don’t have to lose your shirt and pants in order to learn, if you get my drift. If you are a real estate agent, brokers offer this to their agents, but again, it is now becoming an accepted practice in the real estate world so it may be becoming more easy to find your group. If you can’t find a real estate Mastermind, you can still probably find a business Mastermind. Those groups will be sufficient as well because of the personal attention you will receive and the direction the group will be able to assist you in.

The Takeaway

As a newbie you must remember that investors are always looking for a maximum return on investment, and that applies to anything, not just real estate.

Try something; it’s better to try and fail than constantly try and figure it out without taking action. At some point you have to pull the trigger, or you will remain a student of the theories and concepts of investing. There’s no better teacher than real life experience. For example, you cannot simulate how a seller will respond to a question; you only learn these things by talking with sellers.

Far too many times newbies ask questions (which is good), but don’t take actionable steps once they receive the answers. Seasoned investors want to help those who will take action. Talking and doing produce two totally different results.

I drive by a bandit sign nearly every day that reads:”Investor seeks full and part time real estate investor pt/$5k and ft/$10k a month.” Honestly, I see this daily.

Related: Is Wholesaling the Best Way to Get Started in Real Estate? An Investor’s Analysis

Investors are looking for acquisition managers; basically, someone who will beat the streets and answer live calls.Read the article: “Warning Newbies: Stop Wholesaling Now!” will give you an insight on how to interact and provide value to a seasoned investor.

Far too many people are looking for fast income (which is NOT going to happen) and not willing to make this a career. If you are serious about becoming a experienced and professional wholesaler, get your license so you can diversify opportunities. There shouldn’t be any question about getting your license or not. If this is going to be a career path for you, then invest your time and your money in yourself before expecting someone else to invest in you.
If you have any other ideas for those getting started or you are getting started and don’t know where to look, let’s see if we can help. Just ask!
Leave your questions and comments below.

About Author

Marcus Maloney

Marcus Maloney G+ is the Executive Officer of Equity Realty & Investments as well as 3rd Generation Management & Holding LLC, both are family owned and operated real estate investment firms. The firms' goal is to provide affordable solutions in real estate while providing exceptional opportunities for community redevelopment for the residents of Phoenix, Arizona and Chicago, Illinois. You can follow Marcus on Twitter

11 Comments

  1. David Roberts

    I was hoping this article was gonna be about how to research houses for potential wholesale deals. Perhaps you could write one of these? 🙂

    However, the topic that it was, was still fantastic. I definitely agree about taking action. Ive learned alot more from what ive done than what ive read. Reality is reality.

  2. I live in Miami and specialize in Fix and Flips purchased by Checkbook Control IRAs for all cash.

    The transactional part is easy because there is no Hard Money or traditional Financing and all repairs
    are done on a cash basis.

    However, finding a quality wholesale deal is daunting because so many wholesalers are in fact not “wholesalers” rather they wear the spots of a Retailer.

    I probably receive a dozen “Wholesale” Email Lists a week all with “Hot Deals”. Incredibly I often see
    the same exact property offered by several competing Wholesalers and at different pricing. I also see
    the same property listed on the MLS for more money??? Finally, many times I receive a “Price Reduction”
    on a wholesale property that has lingered on the market for 90 – 180 days.

    I know longer take a wholesaler’s word with a “grain of salt” I take it with a 10 lb. salt lick.

    • Marcus Maloney

      Tom,

      You are absolutely correct this happens numerous times and this is one of fastest ways for a wholesaler to loose creditability. I often tell Newbies do not wholesale properties off the MLS unless you can the property considerably below arv, and not just 10-20 off but the numbers need to make sense for a flipper. Thanks for your response.

      “Enjoying the Journey”

  3. Troy w.

    The blog post is miss leading… but I will share some things here.

    Also, Don’t be so hard Tom P. 🙂

    A lot of folks in the wholesale business don’t really understand the numbers, so because of this and this alone they really do a bang up job of wholesaling.

    As a wholesaler(took me a year to get it right!) and a fix and flipper(first flip was a dozzy), as well as buy and hold investor, there are different numbers that go for different investment types, but wholesalers really don’t understand this…they see $$$ after reading a few post or a book or watching you tube or even going to a REI meetup. Then from there they get business cards…drive for dollars….purchase websites…put up bandit signs….then go start
    a mailing campian.

    Then they come to BP and still have folks on here that “I” can tell has never done a deal before, yet give out bogus info …or info that is out dated. So what is a newbie to do? How do they know what information is correct or what is losey gosey?

    So I tell all my all my newbies that first find Buyers!!!!…then find the property. ..then close the deal…that’s just me. I tell them if your property is not assigned within a week or 2 maximum you don’t have.

    I tell folks to even look around on BP and see that a “wholesale deal” has been on there for months…the longer it stays on there it leaves the impression (may not be the case) that something is not right about the deal.

    All whoelsale deals are on the HUD 1 here where I live. So your buyer is always going to remember you and your seller will too. You don’t want to be a one hit wonder in the wholesale business or your buisness is done…period.

    Because they don’t understand the business. The wholesalers really are going with 70% or 65% – repair, but forget the closing…agent fees…holding cost etc etc.. and then to add the wholesalers profit.

    Myself and my buyers look at net profit as apposed to numbers persay…Numbers are needed for ROI% etc. But if I want 40K net profit in a certain area…and 85-100k net profit in another…that’s what I’m looking for. You get me that…I’m listenting. I don’t care how pretty you make the numbers…if they work they work…period.

    The avg. wholesaler looks at their profit first, then the 65%-70% minus repair..etc…and say “I have a deal”….No you don’t my fellow wholesaler…

    So when I break down the numbers that same 40k for them that I was told is my profit, it comes out to be 26k net profit. Where is my other14k?

    I show them how to break down the numbers, and how to bring a package to the buyers. But I know watching house flipping shows make it all seem so easy hahaha…
    * I like the shows because I like the rehab finish work and it give me great ideas!

    All in all I love the wholesale part of my business. I find my own properties through motivated sellers and either decide to buy them myself, hold or fix and flip…or whoelsale it out. But all my deals are wholesaled as if I was actually going to take title to the property. So my buyers are all repeat buyers and everyone eats!

    I always get this ?…what if a seller doesn’t come down to meet my price….then I say that’s not a property I want…then on to the next one.

    • Marcus Maloney

      Lori,

      Thanks for reading, there are many articles on lease option, there a more steps with lease option but its a great resource when a traditional seller will not sell at a wholesale price but still motivated. In a response above I supplied numerous other articles on wholesaling and some free resources to assist you.

      Thank you for reading.

      “Enjoying the Journey”

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