The Power of NOT Having to Wholesale

[Greg Helbeck]

Today I want to talk about a great lesson that I learned as I had more experience under my belt.

It is the power of not having a wholesale every property that comes through my funnel.

When I got started in this business, I only had one exit strategy...Assigning.

I love this assignment strategy and I still do this a ton today.

However, after accumulating some experience and capital, I can now say that having more than one tool in the toolbox is extremely beneficial especially in competitive situations.

Here are three tips on why it makes sense to not wholesale every property.

Tip #1 YOU CAN MAKE MORE MONEY

Most of the time, you are going to make more money if you close on the property. When you wholesale the property. Unless you need to pay your bills immediately, taking down a few properties a month instead of assigning them can dramatically increase the profitability of your company. I'm not saying to close on everything but I'm just saying that cherry picking the best deals to take down is a great way to squeeze the most juice out of your leads.

Tip #2 YOU CAN BE IN A BETTER POSITION TO NEGOTIATE WITH YOUR BUYERS

When I got started, I had no money so I was desperate to sell my property to cash buyers because if I could not get them to buy the house, I could not close on the property myself. Because of this, I had no leverage when it came to negotiating so I never wanted to buyers to know that I really needed them. If you can close on the property, you can try to put out the wholesale deal at a higher margin and if you don't like what the cash buyers can pay you you can just close on it yourself to make more profits. Also, this is very beneficial if a buyer falls out at the last minute. If something goes south before the closing, you can save the deal by closing on it yourself.

Tip #3 YOU CAN BEAT YOUR COMPETITION BY BEING ABLE TO CLOSE

Let's face it, sometimes this business gets extremely competitive and you can be up against five or six different buyers on the same property. Something that I have used that has given me a competitive advantage in the markets that I buy in has been removing assignment clauses and guaranteeing that I was going to close on the property in order to win over a competitor. I actually had a deal that I closed on yesterday that was strictly because of the assignment part of the contract that got removed. The seller was actually the representative of a church and he wanted to make sure that the property did not get assigned. If I was going to only be able to wholesale this property, I would not have gotten this deal.

I still love wholesaling and I do it all the time but these are three lessons that I definitely have learned that have added some water tools to my tool belt in order to be more effective in my business.

We are looking for some passive partners who would be interested in getting involved in some of our rental and flip deals in New York from a passive perspective. If you were ever interested in finding out how you could get involved, feel free to reach out and we can talk about some potential options on working together.