I am repeatedly asked these two questions:
- How do I close my first deal?
- How do I find a mentor?
Since wholesaling is always taught as the best way to get started, people believe that it’s the easiest way to get started. This is not true, as proven by the above two frequently asked questions.
Like many, when I started, I had little to no cash, little to no experience, and little to no help. Sound familiar? If you’re not in this position, you have an advantage. If you are in this position, we’re about to change that.
I’m currently reading The Power of Broke: How Empty Pockets, a Tight Budget, and a Hunger for Success Can Become Your Greatest Competitive Advantage by Damon Johns, and he states in the book that it’s great to start with minimal resources because then you have to be aggressive and use everything you have to get what you need.
Related: Newbies, Want to Succeed at Wholesaling? Focus on Finding Deals! Here’s How.
The majority of markets around the country are seller’s markets. This means it’s challenging for investors to find deals. Many sellers are using the traditional market to sell their homes. That’s not to say there aren’t deals out there (I currently have four set for the closing table), but we have to get more creative. This is an advantage for you because you can be one of the resources the investors use to find deals.
We use numerous methods to find deals, including internet marketing, direct mail, cold calling, door knocking, and more. This is where you come in. You have to become a resource investors do not have. You have to be a set of eyes and ears they can rely on. I’m sure some of you just took the leap, did everything on your own, and learned from your mistakes. That is great, but others are still fearful and afraid of making mistakes. At some point, you will have to overcome that fear, but for now, it’s OK to move a little slower and ease your way in. Not everyone is a bulldog, but I guarantee you will be able to reach a nice level of success.
There are many ways to find a mentor and a deal at the same time, but this is my suggestion.
I was talking with one of my cash buyers after walking a property, and he told me they closed 12 deals this year on MLS-listed properties. Yes, 12 listed properties even though everyone says the MLS is dead for deals, especially in Phoenix, one of the hottest markets. This reminded me of a time when I sat for hours putting offers in on listed properties. Here’s how I found three deals and a mentor using this strategy.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
3 Steps to Close Your First Wholesaling Deal (& Find a Mentor in the Process)
1. Sync up with a local wholesaler.
I am big on relationship building, and this is where you will need to start. Find a local wholesaler in your city. This is pretty easy; simply Google “wholesalers in [my city],” contact them, and let them know that you are going to be writing offers on listed properties. Inform them you would like to offer these properties to them. Your response from them will either be yes or no. You have a 50/50 shot. When they say yes, you will then need to start gathering the needed items (see #3 below).
2. Find an aggressive real estate agent.
You will need to find an aggressive real estate agent to send you listings. These listings will need to be those that fit in the following categories:
- 90+ days listed
- Cancelled or expired listings
- Handyman specials or fixer uppers
- Seller financing available
You’ll want to find a novice agent—someone who recently received their license. You can find them by contacting local brokerages and real estate schools. These individuals will be ready to learn from an investor and willing to submit low-ball offers on your behalf. It is important to train them on what investors are looking for.
3. Gather your needed items.
To begin submitting cash offers, it is standard practice to submit these offers with a proof of funds (POF) letter. This letter validates to the listing agent you have the means to close on the transaction. This is essential if you’re going to utilize this strategy.
So how can you get a POF letter?
You will need to ensure the investor you’re working with knows you understand their buying criteria. You will need to understand the numbers, the location, inspection period time frame, the amount of rehab the investor is willing to perform, and the acquisition amount.
In a seller’s market, investors need to use as many tools as they can to close more deals. Now is the time for you to get in the game, and this strategy will help you close your first deal and find a mentor simultaneously.
Where are you in the process to land your first wholesaling deal?
Leave your comments below!