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Updated 6 months ago, 06/02/2024
Looking to Start a Wholesaling Company! (FEEDBACK WANTED o_O)
I'm eager to kickstart my business, but I could use some direction on where to begin. Should I prioritize market research or focus on building
a network of industry contacts? If you have experience in wholesaling or real estate investing, your insights would be invaluable in helping
me navigate these initial steps. Additionally, I'm on the lookout for resources and tools that can aid me in this journey. Any guidance or
advice you can offer would be greatly appreciated as I take this exciting leap into the world of wholesaling. Thank you for your assistance!
I think market research isn't bad. Though personally I'd want you to get your financials dialed in if they aren't already. Get an idea of how much extra money you have available to put into the business consistently. If you don't have any that is fine, but it's good to know where you are and what you can afford. I am including figuring out your available time as well. Knowing how much time do you have available will be just as important.
Maybe you can cut a few things and create a budget for your business. Your budget or lack of budget will probably have the biggest impact on how you move forward. That is why I think you start there.
Once you have that figured you can make better decisions on your next steps.
Quote from @Kevin Scott:
I think market research isn't bad. Though personally I'd want you to get your financials dialed in if they aren't already. Get an idea of how much extra money you have available to put into the business consistently. If you don't have any that is fine, but it's good to know where you are and what you can afford. I am including figuring out your available time as well. Knowing how much time do you have available will be just as important.
Maybe you can cut a few things and create a budget for your business. Your budget or lack of budget will probably have the biggest impact on how you move forward. That is why I think you start there.
Once you have that figured you can make better decisions on your next steps.
Nice! Thanks for the feedback
Quote from @Kevin Scott:
I think market research isn't bad. Though personally I'd want you to get your financials dialed in if they aren't already. Get an idea of how much extra money you have available to put into the business consistently. If you don't have any that is fine, but it's good to know where you are and what you can afford. I am including figuring out your available time as well. Knowing how much time do you have available will be just as important.
Maybe you can cut a few things and create a budget for your business. Your budget or lack of budget will probably have the biggest impact on how you move forward. That is why I think you start there.
Once you have that figured you can make better decisions on your next steps.
This 100%. I would start with your market, and make sure you get your eyes on as many deals as possible, whether they are on market or not. When I started I had a lot of time and not much money so I drove for dollars and wrote letters to the owners of those properties by hand. It worked, I got a few deals that way after awhile, but there are more efficient ways to market if you have more capital to work with like PPC or hiring VAs for lead generation.
I'd still advise that if you're just getting into business, I would start slowly in terms of marketing spend. Make sure you dial in a strategy that works before you go all in on it.
Quote from @Jeremy Bourgeois:
Quote from @Kevin Scott:
I think market research isn't bad. Though personally I'd want you to get your financials dialed in if they aren't already. Get an idea of how much extra money you have available to put into the business consistently. If you don't have any that is fine, but it's good to know where you are and what you can afford. I am including figuring out your available time as well. Knowing how much time do you have available will be just as important.
Maybe you can cut a few things and create a budget for your business. Your budget or lack of budget will probably have the biggest impact on how you move forward. That is why I think you start there.
Once you have that figured you can make better decisions on your next steps.
This 100%. I would start with your market, and make sure you get your eyes on as many deals as possible, whether they are on market or not. When I started I had a lot of time and not much money so I drove for dollars and wrote letters to the owners of those properties by hand. It worked, I got a few deals that way after awhile, but there are more efficient ways to market if you have more capital to work with like PPC or hiring VAs for lead generation.
I'd still advise that if you're just getting into business, I would start slowly in terms of marketing spend. Make sure you dial in a strategy that works before you go all in on it.
about different strategies for getting started. I'm curious, from your
experience, which method do you think yields the best results: cold
calls, sending out mailers, or door knocking? Each approach has its own
merits and challenges, so I'm interested in hearing your perspective on
what works best.
Cold calling has worked the best for me, but I think you could see success in any of those methods as long as you get a good strategy down. It also depends on the competition in your market I think. If a lot of people around you are cold calling, you will likely be calling the same people. My advice would be try to pick a marketing strategy that is unique if possible. I haven't done a ton of mailers or door knocking, just stuck with what was working for me. Although now I am expanding into PPC and SEO, I would recommend just doing 1 thing until you have it down before trying a lot of different strategies.
Cold calling and getting wholesale deals under contract is really the only thing to do to get started. Buyers come out of the woodwork once you get the deals under contract in Metro Detroit (assuming that's where you will be working). Selling your wholesale deal is the easiest part. Putting the hours in to get those deals under contract is a bit harder. Don't, I repeat DO NOT, start by trying to find the buyers and building a buyers list. Also, until you make the first 100 cold calls don't bother trying to outsource it to a VA in the Phillipines, there are too many moving parts at the beginning.
In order:
1. Cold call (order Propstream and start there)
2. Letter write, manually without typos
3. Drive for Dollars - then implement 1 and 2 above.
4. Collaborate with other wholesalers at local meetups. Meet the guys and gals doing it, copy them ruthlessly. You can find them by signing up for wholesaler lists near you. STAY LOCAL.
- Kenneth Jenkins
Quote from @Chris Morris:
I'm eager to kickstart my business, but I could use some direction on where to begin. Should I prioritize market research or focus on building
a network of industry contacts? If you have experience in wholesaling or real estate investing, your insights would be invaluable in helping
me navigate these initial steps. Additionally, I'm on the lookout for resources and tools that can aid me in this journey. Any guidance or
advice you can offer would be greatly appreciated as I take this exciting leap into the world of wholesaling. Thank you for your assistance!
Find deals, EVERYTHING else will take care of itself. But here is the BIG question. Do you know what is a good deal? Do you know how to determine reno cost? Do you know how to determine the ARV ? Do you know how to find deals ? IF you answered no to any of these questions get to your local RE meeting. It's not rocket science but you need to know. Hey even the cashier at Mc Donalds needs training, :)
Good luck
Why does everyone want to chase strangers – and ignore their own personal network?
Which do you think will be more competitive, buying from wholesalers or your own referrals?
Per this NY Times article, the average American knows around 600 people.
https://www.nytimes.com/2013/02/19/science/the-average-american-knows-how-many-people.html#:~:text=The%20average%20American%20knows%20about,do%20you%20know%20named%20Kevin%3F
Per the US Census Bureau, the average American moves 11.7 time in their life, which based upon an approximate lifespan of 84 years, works out to be about every 7 years.
https://www.census.gov/topics/population/migration/guidance/calculating-migration-expectancy.html#:~:text=Using%202007%20ACS%20data%2C%20it,one%20move%20per%20single%20year
So, if the average American knows 600 people and they each move about every 7 years, that means that the average American knows around 85 people that move in any given year.
How many of those moves do you want to be involved in?
To maximize the number of transactions you’re involved in you will need to:
- Be Top of Mind when they think about moving - which requires consistent reminders.
- Be seen as an Expert – which requires a consistent message and Evidence of Success stories
- Gain their Trust – which requires communicating integrity
So, start out by listing everyone you know in an Excel spreadsheet.
Why Excel? Because later, you can easily use it as your mailing list! Create columns for Name, Street Address, City, State, Zip and then contact info: Last Contact, Relationship, Status, Email & Phone.
IMPORTANT: do NOT ask people for THEIR business, ask for referrals! Why? Because they will get defensive if they feel you are pressuring them. Remember, they can always refer themselves😊
Now, make it a goal to call at least 5-10 of these people EVERY day and ask a MAX OF THREE off the list below of who they know that:
- Just inherited a home
- Had a loved one pass away
- Is behind on their mortgage or tax payments
- Has a relative that can’t take care of their house anymore
- Has a house they’re having trouble selling
- Is facing bankruptcy
- Knows a probate attorney
- Knows a bankruptcy attorney
- etc
Why only three off the list per contact? Because on average, we can only remember three things at a time. If you try to go over the whole list, you’ll lose the attention of an average person and they won’t remember anything!
It should only take you about a month or two to contact everyone on your list and then the tough part – you start all over again.
Why the repetition? Because it takes repetition for people to remember things and you have to be top-of-mind when they encounter a potential client for you!
Have you ever been to McDonalds? Of course you have! So, why is McDonalds still spending billions on advertising?
One more tip – people remember stories that trigger their emotions. So, tell a story of how you (or a fellow wholesaler) helped a seller out with their challenge(s). Change your story each month as different stories will resonate with different people AND use each story to emphasize one of your “who do you know…” questions.
As you start closing deals, you will need to reinvest your profits into mailing lists and other scalable activities to grow your business.
One last thing – we recommended you create a Status column on your spreadsheet, now we’ll explain why. If you find someone that seems to know a lot of people needing your services, wouldn’t it make sense to focus more resources on them? Conversely, you will run into people on your list that just seem to be a waste of time, so you’ll want to avoid them. So, create status codes for both of these and a few in-between codes to help you work smarter, not harder.
- Michael Smythe
Quote from @Kenneth Jenkins:
Cold calling and getting wholesale deals under contract is really the only thing to do to get started. Buyers come out of the woodwork once you get the deals under contract in Metro Detroit (assuming that's where you will be working). Selling your wholesale deal is the easiest part. Putting the hours in to get those deals under contract is a bit harder. Don't, I repeat DO NOT, start by trying to find the buyers and building a buyers list. Also, until you make the first 100 cold calls don't bother trying to outsource it to a VA in the Phillipines, there are too many moving parts at the beginning.
In order:
1. Cold call (order Propstream and start there)
2. Letter write, manually without typos
3. Drive for Dollars - then implement 1 and 2 above.
4. Collaborate with other wholesalers at local meetups. Meet the guys and gals doing it, copy them ruthlessly. You can find them by signing up for wholesaler lists near you. STAY LOCAL.
As someone that runs a VA Call center for Real Estate, I completely agree. Trying to outsource too early in the game is not gonna work. Its the blind leading the blind and you won't now how to convert the leads a VA caller will give you. Get some deals under your belt, take some leads from prospect to close and THEN add some leverage like a VA caller.
- Gustavo Munoz Castro
Quote from @Gustavo Munoz Castro:
Quote from @Kenneth Jenkins:
Cold calling and getting wholesale deals under contract is really the only thing to do to get started. Buyers come out of the woodwork once you get the deals under contract in Metro Detroit (assuming that's where you will be working). Selling your wholesale deal is the easiest part. Putting the hours in to get those deals under contract is a bit harder. Don't, I repeat DO NOT, start by trying to find the buyers and building a buyers list. Also, until you make the first 100 cold calls don't bother trying to outsource it to a VA in the Phillipines, there are too many moving parts at the beginning.
In order:
1. Cold call (order Propstream and start there)
2. Letter write, manually without typos
3. Drive for Dollars - then implement 1 and 2 above.
4. Collaborate with other wholesalers at local meetups. Meet the guys and gals doing it, copy them ruthlessly. You can find them by signing up for wholesaler lists near you. STAY LOCAL.
As someone that runs a VA Call center for Real Estate, I completely agree. Trying to outsource too early in the game is not gonna work. Its the blind leading the blind and you won't now how to convert the leads a VA caller will give you. Get some deals under your belt, take some leads from prospect to close and THEN add some leverage like a VA caller.
Definitely agree with everyone above,
The tendency is to want to move quicker because it's true no one likes to build wealth or get rich slowly. Of course we want it to be fast. That isn't reality though, in the real estate world you have to be diligent and go through each step one at time before you move on to the next because they can crush you if you don't understand them thoroughly.
Crawl before you walk and 3 years out you will be rewarded. Consistency is the name of the game.
I find myself needing to be reminded to crawl first all the time. Keep at it.
Quote from @Chris Morris:
Quote from @Jeremy Bourgeois:
Quote from @Kevin Scott:
I think market research isn't bad. Though personally I'd want you to get your financials dialed in if they aren't already. Get an idea of how much extra money you have available to put into the business consistently. If you don't have any that is fine, but it's good to know where you are and what you can afford. I am including figuring out your available time as well. Knowing how much time do you have available will be just as important.
Maybe you can cut a few things and create a budget for your business. Your budget or lack of budget will probably have the biggest impact on how you move forward. That is why I think you start there.
Once you have that figured you can make better decisions on your next steps.
This 100%. I would start with your market, and make sure you get your eyes on as many deals as possible, whether they are on market or not. When I started I had a lot of time and not much money so I drove for dollars and wrote letters to the owners of those properties by hand. It worked, I got a few deals that way after awhile, but there are more efficient ways to market if you have more capital to work with like PPC or hiring VAs for lead generation.
I'd still advise that if you're just getting into business, I would start slowly in terms of marketing spend. Make sure you dial in a strategy that works before you go all in on it.
about different strategies for getting started. I'm curious, from your
experience, which method do you think yields the best results: cold
calls, sending out mailers, or door knocking? Each approach has its own
merits and challenges, so I'm interested in hearing your perspective on
what works best.
Sorry for the late reply been on a couple trips and stayed offline at least less than usual.
All three work well. We have done a ton of mail and calling. The door knocking for us is used on the realtor side and is more to get the know the neighborhoods but others I know that have used it for getting flips or wholesale deals say it works great.
As for which one is best I'd jump back to needing to know your financials/time restraints. Calling is almost free, door knocking niche lists is pretty cheap but takes a lot of time. Mail is expensive and you will have to outlay a lot of mail and money before getting a deal which might take several months to close (or you can get lucky too).
For the flip side we currently still do mail (less though), less calling, reasonable amount of ppc and youtube videos. The realtor side we are doing ppc and youtube paid videos.
Quote from @Jeremy Bourgeois:
Cold calling has worked the best for me, but I think you could see success in any of those methods as long as you get a good strategy down. It also depends on the competition in your market I think. If a lot of people around you are cold calling, you will likely be calling the same people. My advice would be try to pick a marketing strategy that is unique if possible. I haven't done a ton of mailers or door knocking, just stuck with what was working for me. Although now I am expanding into PPC and SEO, I would recommend just doing 1 thing until you have it down before trying a lot of different strategies.
Totally Agree with doing one thing, and my opinion on why (for those that would like a reason) is below. You should decide what you want to do based off your financial and time situation and just do the one thing (possibly 2) but really no more than that. It will get you bogged down and questioning everything. The only reason I might throw in a second one is just so the person doesn't just feel they chose the wrong channel even when they all pretty much work. (they might think that anyways with 2)
The Why:
The issue with doing more than 1 or especially more than 2 in the beginning is you don't have enough time or money to get enough volume or market saturation to reach any statistical signficance. You will get a deal with enough marketing but you might not get there if you are spread thin without luck (positive side of variance).
Basically doing larger numbers in one type of marketing gets you data faster that you can use to adjust based on your results. Most people see this as more obvious in ppc etc but it works the same in everything else as well.