Newbie Introduction, Advice

[Marlon Long]

Greetings BP world!!!

New investor here, my brother and I are embarking on this journey together as new real estate investors. I currently live just outside of Philadelphia, PA and my brother lives in the DC area, where I am originally from. I don't have a lot of experience in RE investing outside of the purchase of my own properties, but I am an accidental landlord from a condo I own in CT where I used to work and live. This property is really hands off, I don't cash flow alot for this property but the tenants have been really good, they almost never contact me for anything, the husband is very handy and helps repair most of the small things inside the house and the HOA takes care of the outside.

I have a little money saved up and my brother and I are planning on saving aggressively for a year or so, while learning as much as possible before we make our 1st deal. I have been binging on RE books (Rich Dad Poor Dad, ABC's of Real Estate investing, etc), websites, youtube videos and of course BP forums and articles.  I am on bigger pockets almost daily trying to learn something new and further design and plan out our personal strategy. Plus I love the calculators and practicing deals from random properties on the mls.

I do have a question regarding the risks involved with wholesaling. Our ultimate goal is to purchase several great multifamily properties in the Philly and DC areas that cash flows well, using the BRRRR strategy to rinse and repeat and pull our initial invests out of the property. Butt before we do that, in order to help augment the savings I was thinking about wholesaling a property or two to get my feet wet in the industry. This seems like a great opportunity to earn a good profit with low or no money down, depending upon the deal that we are able to find. And it would also give me 1st hand experience in finding good deals for the original goal of multifamily properties.

Any suggestions or advice for newbies getting into wholesaling? General pros and cons that we should be looking out for? What are the main capital investments when dealing with wholesaling other than the marketing portion.(direct mailing, website set up)  Does this make sense as a beginning strategy to raise capital for a multifamily buy and hold property?  Any and all comments are welcomed. Sorry my 1st post was so long, but I may be just a little too excited.

Thanks in advance,

Marlon

[Brett Snodgrass]

Hey @Marlon Long

A wholesaler from Indianapolis here. I love the excitement and determination you seem to have. The book choices you have been reading are excellent starting points. Sounds like you have a solid plan of getting into real estate too! Now it is time to choose a strategy...

I personally love wholesaling over any other real estate investing strategy. I love the excitement and hunt of the deal and then the reward of making my investor buyers happy with a great property. I tried being a flipper for 3 and a half years, and in my experience, I made about the same amount of money that I did as a wholesaler, only with a lot more stress and headache. Now, I would say it depends on what kind of wholesaling you do, as there is a lot more risk and stress involved in assigning contracts then what I do in buying the property fully, and then reselling it. And my method does take a lot more working capital, but for me the transaction is cleaner and simply less hassle. 

Check out my BP blogs:  https://www.biggerpockets.com/renewsblog/author/brettsnodgrass/

I believe that wholesaling can work in every market, but it does differ on how you go about it. For example, we do a lot of Indianapolis deals, and many investors love those all over the world. Indy is well known and a great place to sell properties to investors. However, we also do small towns on the outskirts of Indy. These towns are a little lesser known, and we sometimes have to go a different route to sell them, like putting up signs, craigslist ads, and sell to more of a local investor who buys there.

The biggest thing is to learn in a “needs­only” incremental approach and to take action. When you are just starting out, there is so much information out there that it’s easy to get bogged down. First determine what strategy you’d like to start with. Then only learn what is needed for the next step. Then once that’s completed, learn what’s needed for the following step, and then the next and so on. This way, you won’t get distracted or overwhelmed. If after you’ve done some deals you want to try a different strategy, that’s fine but when first starting out pick something and stick to it until the end. Whether it’s getting your first flip down, wholesaler deal or rental property, choose only one, see it through and then assess if you’d like to make any adjustments from there.

Keep educating yourself and take action soon!

Hope this helps! Good luck & God bless.