Lessons Learned from Wholesaling

[Robert Richards]

I am interested in reviewing the 'lessons learned' from your wholesaling experience.  What has worked well for you and what has not worked well.  Of course this applies to all facets of your business e.g. marketing, negotiating, closing, etc. My wife and I are new to wholesaling and I being very process oriented want to establish a system in which we can measure our successes and failures.  Because we're new, the feedback from 'lessons learned' will help us establish our initial framework.

[Tom Cafarella]

The steps to take are below. In terms of things not to do/are wasteful in the beginning:

Doing any activities except for getting your marketing system set up. These include trying to find investors to buy your deals, finding contractors, partners, worrying about anything legal or accounting etc. Your singular focus in the very beginning has to be getting 1 on 1 appointments with motivated sellers.  So as far as lessons learned, I would say the most important lesson is to try to do anything besides the marketing and lead generation on day 1.  I see this trip people up all the time.  

In order to find motivated sellers you must:

1. Determine what kinds of properties you want to buy. This may sound simplistic, but you need to get laser focused on exactly what you want so that you can then plan your marketing campaigns.

2. Build a database of all of these properties in a CRM preferably

3. Find all of the owners contact information(cell phones, correct mailing addresses, emails, etc)

4. Market to these people on a consistent basis:

a. Calling them(either you can do this or you can hire someone to)

b. Mailing them

c. Emailing them

d. Using facebook ads to stay in front of them

e. Using google adwords to target them.

If you are going to generate all of these leads, you need to properly monetize all of them, meaning that you make sure that you are making as much money on all of them that you can so that you are getting back all of the dollars you are spending and then some. This means that you are:

1. Buying the absolute best deals that come from these leads(you cherry pick the best ones)

2. Wholesale the deals that are just "ok" to other investors who are desperate for deals and are sick of buying on the MLS

3. Have an agent partner that you are referring the deals to that are not interested in a true investor offer(this will be 80% of your leads)

4. Have an agent partner who can help you generate and profit from generating buyer leads on all of the listings that you have(there is big money in this if you do it right and it is pretty easy to do)

Regarding the agent partner: when you are marketing for motivated sellers, you are going to end up getting one on one appointments with a lot of sellers. The reality is that roughly 80% of sellers are not going to want to take an investor offer.

When you meet with a seller that does not want to take an investor offer, almost all of the time, they still want to sell. The better option for these kinds of people is to refer them to an agent partner of yours to help them get top dollar for their house. If you are a licensed agent yourself, you can take a referral fee on this.

It is important to make sure you montetize(make money on) every single lead that you get because if you don't you will be throwing marketing dollars out the window.