Why Today’s Market is Just as Good for Wholesalers as 5 Years Ago

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I often hear people say that they should have started years ago because today is just too competitive. They give up very easily, they are intimidated by all the “I buy houses” signs, and they think everyone in their local real estate club is taking action, leaving no room for them. I am writing this to inform you that you are limiting yourself, and today is a better time than ever to jump into real estate. There are more buyers who are willing to pay more to get a deal. The MLS has dried up in most cities, so your service as a wholesaler is needed more than ever. We don’t know how long the economy will be this good. So, why not take advantage of it while we have it?

Related: What Warren Buffett Just Told Me About Real Estate is Great News for Investors

Allow me to give you an example. I am doing a lot of direct mail marketing these days. When I used to come across deals during the recession, I would be happy to make $3-7k, and I would have to split that with my partner. Fast forward to today, if I can get deals with the same numbers, I am making $15-20k per wholesale on those deals. As you can see, I can make more money than ever before in this market. Don’t be a negative Nancy and focus on the negative things. If you were to focus on the positive things, you’d reap a more positive outcome. So let’s say you spend $4k in direct mail, but you get one deal and make $11k. You just profited $7k off that mailing campaign. That is a lot better than a job.

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A Few Benefits of Wholesaling in Today’s Market

I know some of you are saying, “But in some pockets, it’s just too difficult to find a deal.” Remember, we are wholesaling — and believe it or not, rehabbers have it harder than us in these hot pockets. I am working on a deal that I been talking to the seller about since 2014. I offered $27k, they agreed to it, I sent the contract over, and the seller decided to change his mind and keep it. My potential wholesale profit was $5k. I offered them $60k in 2015, the seller was much happier, then still decided not to sell, and I lost about $8k in potential profit. This year, I offered $77k and can potentially make $20k off wholesaling this thing. Again, in this market, you can make just as much as rehabbers are making with less risk, no contractors involved, and no payments on the house while you are praying the contractors hurry up and complete the job.

Another benefit of the hot market is the ease of finding buyers. You can literally make a post on BP looking for buyers in your area, and you will have a few people step up the plate. Five years ago, I had to work hard to find a buyer. With the conditions today, I have not used Craigslist or any third party site to sell a property since 2013. I have been finding my buyers off market, and it’s not difficult to do. I love working with agents who have a network of cash buyers. I have no problem paying their 3% (some of them require more, which is fine because they have buyers for all kinds of properties that some more traditional investors won’t touch).

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Related: 3 Factors to Study in Your Market BEFORE Buying an Investment Property

Attitude is Everything

In conclusion, I wrote this article to get you guys to look at the upside of being in this market. Get started today and stop putting limits on yourself. The owner from Under Amour sportswear was just broke in the late ’90s. Now he is a direct competitor of Nike and arguably has two of the best, most popular athletes signed to his brand (Cam Newton and Stephen Curry). What if he would have said, “You know I can’t compete in this space because no way can I ever be as big as Nike, Reebok and Adidas.”

I’ve said it many of times before, but it’s good to get into self development to create a can-do attitude. Attitude is everything in life, and adapting a positive outlook is extremely important in being successful. If you ever think about quitting, just think that if Joshua Dorkin would have quit when things got tough, you would never get to read this valuable content. BiggerPockets has existed over 10 years and wasn’t just built last year. Just let that marinate.

Wholesalers: What are you seeing in today’s market?

Let me know with a comment!

About Author

Nasar Elarabi

Nasar is a corporate failure who was saved by Real Estate. Nasar is now a Wholesaler, Rehabber and Landlord in the Charlotte area. Nasar may have just barely graduated college but can flip a house like an acrobat. Nasar's work can also be found at RealEstateDoru.com.

23 Comments

  1. Tim Silvers

    Excellent article and exactly the inspiration I need to hear. I had been flipping full-time for the last few years, had a good run the first couple years, then crashed, getting into some bad deals. I always looked at wholesaling as something you do as a beginner and before you step up to the next “level” and do flips and so I thought it was “beneath” me. How wrong I was. At the end of the day, it’s the wholesalers that made all the money while I was left with a loss. So, for the extra few thousand I could’ve made on my last flip vs getting my profit in 10 days with zero hassle, no contractors, waiting to find a buyer, paying holding costs, I took a wholesale deal. That was all the spark I needed to start wholesaling – or rather co-wholesaling.

    Question: Regarding working with agents, how exactly are you getting MLS deals under contract since they’re already listed and paying them their fee as you say? I know with REOs and short sale listings, the bank won’t accept assignment contracts. The other issue is preventing buyers from circumventing you and going direct to the listing agent.

    • Nasar Elarabi

      Tim,

      I do not deal with listed properties. I work with agents who have access to buyers I do not have access too. I offer them my properties and tell them to put their 3% on top of the purchase price on my deal. hope that helps

      thanks for reading

  2. Alex Franks

    Flipping Is always been an easy thing or wholesaling regardless of what you call it. Very well written article. I just think from 2009 to now. Very little product left over from the mess. Most of what is being flipped or wholesaled in most markets are the lower end. Which there is always a reason that product is left over or recycled. Depedning on which way you prefer to call it.

    As for Charltote, and wholesaling I know Nasar from my market here and Charlotte. Not a better guy to contact if you are looking for deals.

    Alex Franks

  3. Wes Emert

    Good article, perseverance is key. Today’s seller albiet motivated is more sophisticated and more and more will be looking past the higher pressure message that often comes along with the I Buy Houses message. Wholesalers will need ro adopt a more consultative approach to the model and offer today’s seller more options that hoe beyond the rock bottom offer.

  4. brandon toney

    Thanks for this article Nasar! It was just what I needed to hear. I am new to RE investing and starting in the wholesale space. I just sent my first round of yellow letters and the calls are beginning to come in. I just had a rough conversation today with a potential seller who was upset at me for soliciting business from him. It’s weird how a person will be mad at someone sending a letter. Why not just throw the letter away and move on?
    Anyway, it’s great to hear your input on wholesaling and this market. It’s easy to feel like there aren’t deals to be found but I’m going to keep moving forward and digging for the deals.
    Thanks again!

    • Nasar Elarabi

      Brandon,

      You are going through what we all go through on a daily basis. There are deals where you are but you have to pay your dues. I thought the same thing at my market at first but I did not give up and I am thankful I did not.

      thanks for reading

    • Nasar Elarabi

      Rehabbers just cant go on the MLS like they could 5 years ago. They have to depend on off market deals and most dont know how to market for good deals. Alot of rehabbers have to rely on wholesalers to bring them good deals.

      thanks for reading

  5. Attitude really is everything – which is why these self-defeating “the system is rigged, you can never win” types annoy me so much. Even more so when they mock you for having aspirations and call you deluded because you think if you work hard enough you can accomplish something great. Talk about “crabs in a bucket”.

  6. willie morales

    Hi Nasar,

    I’ve been reading your posts, thank you for being generous. I wanted to know do you need earnest money deposit more than $10.00, like some investors say? Wouldn’t the seller not take you serious if you offer that amount?

    Thank you.

  7. Oyama Lewis

    Thanks for such a motivational article Nasar. One time I love about our business and this community in particular is the sense of family who constantly motivate and push each other forward.Thanks again brother.

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