Advice for a Newbie (The Smart Wholesaler)

[Shante Harris]

Hi everyone. I have been cruising around this site for some time now but have just recently decided to make an account and post. I purchased the ebook, The Smart Wholesaler, in hopes that it would teach me everything I needed to know in order to jump right in and get started with virtually no money down wholesaling. While the book gave some valid tips, I'm just not so confident in my executing my first deal. I thought I would be after anxiously and excitingly reading this book, but I'm not. 

I just want to get my first deal off the ground hoping that the others will just fall in line after that. I'm thinking of purchasing leads from Melissadata.com or ListSource.com. Has anyone used those and can provide feedback? Also, I have to purchase my postcards, yellow letters, smart signs, business number and some leads for potential buyers if they don't fall in line with the list I'll get from the two above sources. 

My question is, are there any tips that you guys can give me in order to easily gain motivated sellers and honest motivated buyers? Seeing as though those are the two main important things that's needed to start wholesaling. I've read all of the threads on here about obtaining them but wanted to know YOUR advice on what you do to get them. Also, should I acquire lawyers and title companies as well? I have the contracts that The Smart Wholesaler provided for me to get started. I emailed her but getting a response back while she is in high demand and busy with her ventures is probably not going to happen, despite the fact that she offers 60 days to work with her on deals. Any advice and suggestions would be greatly appreciated as I really would like to complete my first deal before the year is out. **Please no negativity. Be nice. I am a newbie.**

[Hattie Dizmond]

@Shante Harris 

Welcome.  You say you've been cruising around the site.  I sincerely hope part of that cruising has been listening to podcasts, particularly those covering wholesale topic.  Although, I haven't heard one that has not proved instructive.  If you haven't been listening to the podcasts, what are you waiting for?  Also, BP Blogs.

As for your first deal, understand that wholesaling is one of the most difficult strategies to execute.  It's also possible it has the longest normal lead time from start to first deal, because it's all about marketing.  That doesn't mean people don't get a deal quickly at times.  They certainly do.  However, wholesaling is about lead volume.

Even the best wholesalers have an exponential factor of calls, to leads, to deals.  In order to drive those numbers, you have to have your lead funnel flowing.  And, it can't just fill up once.  You have to continue your marketing efforts to keep leads flowing into your operation.

Additionally, you have to understand all the potential exit strategies, what makes a particular deal attractive for any particular exit strategy, and how to effectively analyze those deals.  Did I mention you also have to be an expert negotiator?

I'm not saying any of that to discourage you.  Instead, I want to ensure you have your expectations set appropriately and set goals you can control, because the reality is you can't control when you get a deal.  You can create the environment where probability is in your favor, but it's a little like rolling dice.  You know if you roll the dice enough times, you will get a 6.  Marketing for deals is very similar.  If you listen to the successful wholesalers, you're going to hear that they get x% (I'm not going to quote the %'s, because they are different for different areas & types of mailings.) response rate on mailings.  Then they have to talk to a certain number of those people, before they get a true lead.  For every x lead, they will close 1 deal.  It's a numbers game.

You need to get your marketing going, if you plan to do deals as a wholesaler. You have to be an expert marketer. A lot of people use Listsource. Never pay for buyer lists. Focus on your deals. If you have good deals, buyers will find you. Get involved with your local REIA's. Find out who the serious buyers are and what types of properties they are looking for in what areas. Drive those areas. Make notes of the houses that are abandoned, distressed, show signs of deferred maintenance. Look up the owner names on the county tax site and send them a letter.

Pick not more than 3 areas where investors are active and become an absolute expert on those areas.  Drive those areas regularly.  If you see contractors working on houses, stop and talk to them.  Find out if they are rehabbing the house for an investor.  If they are, ask if you can look around.  Figure out what investors are doing.  Talk to thee realtors that are farming that area.  Give them your card.  Tell them what kind of properties you are looking for and let them know, if they have sellers with homes that can't be sold retail to call you.  Visit every open house that is held in those areas.  Network like crazy.

Don't worry about your team.  Unless you are doing a double closing, you won't need a closing agent, just do an assignment of contract.  Use your own best judgment about whether you need a lawyer.  I'm not a lawyer and am not giving legal advice (required disclaimer!).  However, if you're going to use a standard purchase agreement and do an assignment of contract to your end buyer, there's really not a lot for a lawyer to do.

Don't pay for a business number, use Google Voice, it's free.

So, back to what I was saying before. Don't set a goal you can't control. Instead, set a goal to talk to x number of sellers...send out x number of post cards. Attend x REIA meetings a month. Write x offers per month. Take action, but don't set yourself up to become disillusioned and become one of the many newbie investors who starts off excited and just fizzles out.

Hattie