Best starter plan?

Question

I am thinking of starting out with wholesaling to build experience and make some money and whenever I raise enough, I'll put it towards a buy and hold property for the rental checks. This way I can earn more faster, but eventually move into buy and hold completely.

I don't currently have a job though, so I'm trying to decide what would be the best option:

1) Work full time and wholesale in the evenings and weekends.

2) Work part time and wholesale when I am free.

3) Don't work and go completely into wholesale.

How long does it take a wholesaler to start getting momentum? This will have a large impact on which one I choose.

I also have found someone in my local area that is willing to mentor me, so I should be able to get into wholesaling quicker than if I was doing it on my own.

Shaun Reilly · Answer

Depends on the job and how much all that stuff is going to be running you.

IF you can get away with a part time job and just minimize your living expenses that would be better since you will have more time.

This would be what I would aim for.  Also I would see if I could get that part time job (or full time if it has to be one) in a related field.  Working with a Property manager, in a real estate office, with a construction company, doing labor for a contractor, working a local building supply store or a Home Depot or Lowes... you get the idea.

Tom Sylvester · Answer

@Justin Foster - There are some good recommendations in this thread.  I would suggest going to get a job for now.  I worked a full time job (and still do) and was still able to start a buy/hold real estate business as well as a wine/liquor store on the side.  It took a lot of effort, but having the full time job allowed me to support myself and my wife, as well as show a W2 to banks for financing and for other credit.  That way, I did not have to depend on my side gig until it can support me.

Also, although many gurus pitch wholesaling as an easy way to get started, I would personally not recommend it.  Disclaimer: I have never wholesaled a property.  In order to wholesale a property, it requires that you find a great deal.  I say great deal, because there has to be enough in it to give yourself a cut, plus the person you are wholesaling it to.  This requires a lot of time and/or money, especially if you are first starting out.  Additionally, it requires knowledge to know what is a great deal.  This means understanding ARV (after repair value) as well as renovation costs.  I think this is very challenging for a new investor.

If you eventually want to have buy and hold properties, my recommendation would be to get a full time job (especially if you don't have expenses) and sock as much money away as you can.  Learn real estate on the side and start looking for a good deal.  If you find one, you can either wholesale it.  Or if it is a multi-unit and you can get approved for financing, you can move into one unit and rent out the others.

Todd Plambeck · Answer

Part time is fine so long as you are generating enough money to cover your living and marketing expenses.  More marketing equals more leads, more leads increases your chances of scoring a deal.

I think @Shaun Reilly has a great idea.  If you can learn more about the business while earning money you're killing two birds with one stone.

In the interim, there are lot's of things you can do on the cheap to get started. Go out and drive neighborhoods, go and visit realtors and tell them what you are looking for.  Most of what you are looking for are listings they will turn away because most retail buyers won't even look at them and many aren't financeable.  For around $50 you can go to Kinkos and print off 1000 flyers and buy a couple bags of rubber bands and walk your neighborhoods and put the a flyer on every door.  I'd suggest rolling them so you headline is showing when you roll it up and rubber band it to the doorknob.  They are going to have to pull it off door knob and they will see your message.  Something like "JUSTIN BUYS HOUSES!" would be great.

Justin Foster · Answer

@Todd Plambeck

How many hours do I need to work in order to have a W2 income?

Todd Plambeck · Answer

Something else that you may want to consider is if you are going to buy and hold down the road you are going to need to get those properties financed.  That will most likely mean banks and banks are going to want to see W2 income unless you are hugely successful at wholesaling and have a mountain of cash.  My suggestion is to get a job, store up some cash, get your credit above 680 and wholesale part time to start.  You can meet up with sellers in the evening when most of them are home anyway.  Are you going to miss some deals from people who will sell you their house if you can show up before any other buyers?  Yup...  But you'll be able to hang in the game long enough to get you marketing machine and sales processes up to speed so you have a chance to succeed.

Shaun Reilly · Answer

Hey @Justin Foster

Glad it was helpful.

Good luck finding something that will work and get you in the field.

The construction companies, contractors and supply stores will probably be the best since you can learn some more about what goes into fixing stuff and should help you ball park costs when making your wholesale offers.

Justin Foster · Answer

@Shaun Reilly

I don't have living expenses since a live with a relative, so I'll see if a part time job can cover the rest.

From what I've seen, property managers need a bachelors degree and the real estate office jobs I've found would just be answering calls at the front desk.

I'll look into local construction companies. I never considered home depot or lowes, which is a really good idea. I'll apply there while I look for the other options.

Thank you for being very helpful!

Justin Foster · Answer

@Shaun Reilly

Do you think a part time job would be enough?

My concern with a full time job is that I just wouldn't have enough time to put into wholesaling.

Shaun Reilly · Answer

If you are about to start to get all those expenses to hit you should probably look at getting some steady income for now and keep learning and get some marketing started on the side as you are unlikely to hit the ground running and close enough deals fast enough to cover that for a little while.

Justin Foster · Answer

@Shaun Reilly

I am taking a break from college due to moving last month. However, I am staying with a relative for a little while so I don't have to cover housing or food bills.

The expenses I have are school loans starting next month, paying my mentor once we get started, and car payments once I buy a car.

Best starter plan?

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