Negotiating within wholesaling

[Jonathan Grzeszczyk]

Soon I am taking a job with a wholesaling company on the acquisition side of the deal. Their business model is interesting and has a couple different exits strategies when getting a property under contract. So, coming in to the real estate field with no capital it seems like a good first step to get my feet wet and get a better understanding of real estate investing as a whole.

Since I will be on the buying side of the deal, obviously negotiating will be a big part of my job. Therefore, I have been trying to study up on techniques used to make good offers and over come objections. However, I have not found much on the subject relating to wholesaling. 

Pretty much everything I have seen and read is:

Find out the sellers motivation/problem and speak to solving that issue.

Give an offer but explain how you got your numbers.

Other than that, it seems pretty limited for negotiating information. For those of you who are wholesaling, what are some other ways you go about the negotiating phase? 

(Further context on the role, the business has solid marketing and network established. So, I will not be needing to source leads as much. Most of the work will be following up with warm leads already.)

[Don Konipol]

Quote from @Jonathan Grzeszczyk:

Soon I am taking a job with a wholesaling company on the acquisition side of the deal. Their business model is interesting and has a couple different exits strategies when getting a property under contract. So, coming in to the real estate field with no capital it seems like a good first step to get my feet wet and get a better understanding of real estate investing as a whole.

Since I will be on the buying side of the deal, obviously negotiating will be a big part of my job. Therefore, I have been trying to study up on techniques used to make good offers and over come objections. However, I have not found much on the subject relating to wholesaling. 

Pretty much everything I have seen and read is:

Find out the sellers motivation/problem and speak to solving that issue.

Give an offer but explain how you got your numbers.

Other than that, it seems pretty limited for negotiating information. For those of you who are wholesaling, what are some other ways you go about the negotiating phase? 

(Further context on the role, the business has solid marketing and network established. So, I will not be needing to source leads as much. Most of the work will be following up with warm leads already.)

When you say you’re taking a job, will you be an employee on salary + commission or an independent commission only “contractor”.  If the latter you may just be an independent “bird dog” for a wholesaler competing with everyone else. 

Does this wholesaling company you’re going to associate with actually purchase the property and then resell, or do they just “flip” the contract?  and only close IF they find a buyer to either pay for the contract assignment or pay a higher price for the property?  If the latter, depending on the jurisdiction, YOU may need to be a licensed real estate agent/broker to engage in what’s commonly called “wholesaling” but is actually “flipping”. 

Sorry if I’m discouraging, but I’ve seen this movie before. My personal experience after 40 + years in the real estate industry is that “wholesaling” is a very INEFFICIENT AND INEFFECTIVE way to gain knowledge and experience relative to real estate. People most successful in all aspects of real estate investing and the real estate BUSINESS, gain knowledge and experience n three areas: (1) real estate principles, (2) real estate law, and (3) real estate finance.  At best, wholesaling may require that you obtain a minimal understanding and experience in these three “foundations”.

Look, I wish you luck in your endeavor, and I sincerely hope you end up in the 1% that find wholesaling  to be a profitable business.  But I’d be amiss if I did not suggest that instead you gain knowledge of the aforementioned 3 foundation by studying for a real estate agent/broker license, and then seek employment with REITs, real estate operating companies, real estate managers, or real estate brokers.  Any of these will leave you in a much better position for success, and provide a greater income while you learn.