Recipe for Wholesale Success (short and sweet)

[Thomas Burnett]

Investment Info:

Single-family residence wholesale investment.

Purchase price: $186,000
Cash invested: $4,000
Sale price: $215,000

Purchased wholesale course for $1000. Followed course, and sent out mail to DFD (driving for dollars) list. After about 3 months of consistent action - (still working full time) - found motivated seller. Total costs: program, $1000, direct mail postcards $2500, miscellaneous system fees and gasoline. Put property under contract and marketed contract to cash buyers - Cash buyer property inspection, offers by end of week. Contract assigned for $29,000 and nearly 10x my investment!

What made you interested in investing in this type of deal?

Gaining the knowledge to make money repeatedly is worth infinitely more than the actual cost and profit.

How did you find this deal and how did you negotiate it?

Direct mail. Seller called me after receiving postcard. I returned the call asap and talked to him about his situation and did not ask about price until I understood why he called.

How did you finance this deal?

The purchase was taken over by the investor and I did not finance anything.

How did you add value to the deal?

The seller needed to sell to solve a problem. I listened to understand the problem. I offered a solution that would benefit him. The contract price was a value to the investor who purchased it.

What was the outcome?

I now have an enlarged image of the check I received from the deal that I have altered. The signature was removed and that line is now in very fancy calligraphy text to display the word 'Persistence' to signify that persistence pays off for $28,323.66 and is hanging above my work space.

Lessons learned? Challenges?

Wholesaling is simple to understand, but that doesn't mean it's easy. It took me 3 months of spending all my free time during the summer when I wasn't working to be out driving for dollars and looking for houses that needed some love. I wanted to quit more than once when I would get a lead that would dissolve and not finalize, or when money started getting tight because of all the postcards and marketing that I was spending.

[Bryan Eltzroth]

@Steve Morris

I understand @Thomas Burnett and his attorney may not have been completely aware of brokerage details in OR but there's no need to stomp all over his deal. He hustled and solved a problem for two parties. The seller may not have desired to deal with an agent along with the commissions and contingencies that go into a normal transaction and the investor was looking for a deal. 

Functionally, it's no different from any other investor looking for off-market deals or steals on the MLS. If a BRRRR investor sent out the same letter, talked to the same seller, and closed the deal themselves, would we be ostracizing them for this deal? Unlikely. We would be celebrating the hustle and determination.

Looking outside the legal ramifications, I feel like wholesalers serve a valuable purpose in the industry. They charge a fee for finding deals and there is nothing wrong with that. It's easy to say investors are more than capable of finding their own deals but we all know that's easier said than done.