Being Successful at Wholesaling - Do you need a Mentor?

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Someone asked the question "Is it worth paying a mentor" regarding a specific mentor, in a different post and I thought it deserved it's own general response for anyone considering starting out in wholesaling. I've been finding "off market" properties for a number of years and here is my experience:

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Is it worth it?

It depends.

If you dig, you find that they tell you some interesting things:

One of them says they spend about $100,000 a month in advertising. That is not a misprint. $100,000 a month. They are not using grocery money to start a business and haven't had to for a very long time. They have the luxury of weathering a few down months. Can you advertise on a scale big enough to get clients?

Another says they have 8 people, acquisition, disposition, someone to maintain the database and other staff. Do you have staff to help you? You can hire VA's but of course that takes commitment and money.

Each has been at it for 15 years or more so they have built up their contacts and buyers lists. Do you have contacts and buyers? Contracts, scripts, escrow companies, title companies, attorneys, real estate agents, a source for printing materials, a web presence, a long term plan, money in reserve so you can eat, can you take a thousand "no, get out of my face" for every "yes"? Are you a self starter, do you think it is easy ? (you are wrong), do you think it takes No money (you are wrong) do you think people will welcome you when you contact them (you are wrong).

They have access to cash to complete the transaction. Do you have access to large amounts of money to buy the property, or the knowledge to do creative financing or the contacts to do a double close or transactional funding? Do you know what those options actually mean?

One of them says it takes about 200 Conversations with sellers to get a deal. Can you keep dialing until you've spoken to 200 people? It takes about 1,500 "dials" to get to 200 people. Most calls go to voice mail. Voice mail is not taking to a person. When they pick up the phone and talk to you, it is a conversation. You need to talk to 200 owners (not renters) Can you relentlessly dial for dollars?

Consistency, consistency, consistency. If you are Not at it every day you lose momentum and the whole process grinds to a halt.

Are you willing to be sued? In one video three or four of the ones you mentioned are discussing the number of times they've been in a lawsuit. It was unanimous, each has been involded in lawsuits several times. Let's face it, if you are successful wholesaling you will be sued. Those are their comments, not mine. Do you know the laws about wholesaling and are you willing to follow those laws?

And most importantly, did you read every word of this post? NO?? Then you will never be a good wholesaler. If it took you a second reading to see this part, good for you. You might make it. If you miss details in wholesaling, you get sued. You really have to know what you are doing. Skipping this information and not understanding it shows either you don't have the apptitude or you don't have a true interest. Save your money and do something else.

So, how do I know all of this since I don't wholesale? I have spent the last 25 years sourcing my own properties, off market, and I know what it takes. And I've listened to them to see if we have similar experiences, and we do. I personally have tried training over 60 people, mostly from BP, for no charge. Not one followed through. Not one. That was very curious to me.

Now, why do they sell "wholesaling" material? They develop a course and then sell it many times over. It is a profit center. They make their real money by massive advertising, & youtube gives them an army of people looking for properties for them to joint venture with. They split 50/50 with those very few who actually buy their courses and find a deal or two. So, if I had a couple of hundred people around the country bringing me deals from time to time I could also do a couple of extra deals a month. But that also means 95% of those same people never bring a deal at all.

So, if you buy their course for $5,000 and put another $5,000 into set up and advertising and you get your first deal for a $10,000 assignment fee when all is said and done, you split that with the mentor 50/50, so you get $5,000 and you are still $5,000 in the hole. You do an additional $2,000 in advertising to get your next deal and split that. It actually takes at least 3 deals before you start making any money. It's very rare to do one the first month> Let's say you do one the second and third months and if you last that long, you go on and make a living at it (or not, if you burn out). One of the guys says it's 92 days from the first deal to cash in pocket. It has about the same results as being a real estate agent. Unless you are really commited and real good. But, that is true for real estate agents too. There is not much difference income wise.

Is it worth it to wholesale? Absolutely yes, if you can do the things in this post. Otherwise, save your money.

That is how it works.