Why Wholesale?

Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes

11y

Originally posted by @Dev Horn:

It's probably just me, but sometimes the more words people use, the less I hear them.

Fair point. So:

"Devon, wholesaling is an idiotic approach for someone with no time or money. Don't do it!"

Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes

11y

Or maybe:

"Get a license!"

Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes

11y

Or:

"No!"

Brian Gibbons

Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes

11y

Wholesaling is like the car business at auction,

You have to pay cash for it, get on title, own it,

Get transactional funding to do that or private lenders or joint venture funders to do that

Then you can retail it

I think one of the biggest mistakes you can make if you don't have Cash Buyers interviewed and you know exactly what they want to buy, don't wholesale

Just getting an option agreement from a seller without having Cash Buyers is dumb

@Dev Horn

@Bill Gulley

@Will Barnard

2 Reply

Dev HornPro Member

Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes

11y

Most of the guys in our program do multiple kinds of flips - most do full rehabs, but almost all of them wholesale properties that they don't want to rehab themselves.

One of our newer licensees, in Miami/Ft. Lauderdale, has scored $60,000 on 2 wholesale flips in the last 60 days. He's a broker, he's a rehabber, and he also wholesales to his extensive list of cash buyers.

What an IDIOT.

2 Reply

Brian Gibbons

Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes

11y

Originally posted by @Dev Horn:

Most of the guys in our program do multiple kinds of flips - most do full rehabs, but almost all of them wholesale properties that they don't want to rehab themselves.

One of our newer licensees, in Miami/Ft. Lauderdale, has scored $60,000 on 2 wholesale flips in the last 60 days. He's a broker, he's a rehabber, and he also wholesales to his extensive list of cash buyers.

What an IDIOT.

Yes an IDIOT who is a transaction engineer and

not a one trick pony and

who is licensed

Investor · Watertown, NY · Member since 2015 · 225 posts · 88 votes

11y

There's a lot of knowledge on this thread! In fact I'm still googling a few questions from Bill. But they're right, you only know what you know and not what you don't.

So I'll make it simple. You have less than 3 hours a day. You have very strict complications.

1. I understand the my child is porcelain mentality. My wife is the same way. Develop necessary relationships in your community. Find a babysitter you can afford or trade time for.

2. Find a very serious buyer. Go to meetings introduce yourself and ask who buys a lot of properties.

3. Find deals for this buyer. Use their contracts that they personally use to close.

4. Create a plan to find those type of houses.

-where do these houses exist in your market?

-how far and how often can you farm these areas?

-learn your market -who's your competition? What are the metrics for your area (arv, repair values, material cost)

-know what a deal looks like, don't know how? Well then ask here, there's a forum for that. If it's good, someone will ask you on the side if they can bite.

-focus on your first deal. It doesn't have to be perfect, but it can work. Then reinvest your money after doing your aar. Reinvest that into systems. Ex. You have 3 hours a day you can dedicate to RE. Setup your DM campaign and use trackers to know what works. Setup a VA to field your calls. (There's a book for this on how to pre-qualify). Screen those deals the day before and create a best use route to drive by. If the drive by works, setup an appointment. The only way you make money is by creating deals. Just remember every hour that goes by is an hour lost to someone who was motivated enough to call.

Other recommendations

Check out the red pill investor (focus is negotiations, the podcasts walk you through a conversation with sellers)

You make your money when you buy. You get your money when you sell.

Keep it simple and move effectively. I promise you there is a light at the end of this road.

Always keep learning!

I hope this helps in some way.

4 Reply

Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes

11y

Originally posted by @Dev Horn:

Most of the guys in our program do multiple kinds of flips - most do full rehabs, but almost all of them wholesale properties that they don't want to rehab themselves.

One of our newer licensees, in Miami/Ft. Lauderdale, has scored $60,000 on 2 wholesale flips in the last 60 days. He's a broker, he's a rehabber, and he also wholesales to his extensive list of cash buyers.

What an IDIOT.

Does he have no time or money, like Devon?

Dev HornPro Member

Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes

11y

LOL. Your point is well taken. Our guy in that market spends at least $5K to per month on marketing, every month. Alas, it does take money to make money (not to mention expertise in real estate and a bunch of professional connections).

Podcast Guest on Show #106

Mike SumskyPro Member

Rental Property Investor · Bremerton, WA · Member since 2012 · 116 posts · 61 votes

11y

@Devon Woodson, looks like I'm a little late to the party, but I just wanted to mention that I run the REAPS Kitsap meeting that you spoke about, which meets in Poulsbo the 1st Thursday of each month. Feel free to bring your son next month, you can always step outside to the hallway if he gets a little fussy, and you don't have to stay for the entire meeting if it's not working out. We are a real friendly bunch over here, and I have a 6-month old daughter so I can relate to your situation. In fact, when we had our August meeitng, which was a house tour, I brought my daughter along and it worked out just fine.

With regards to whether wholesaling is a viable strategy, there was a lot of good information here. I agree that getting a real estate license can give you a great education, even though you don't need it in order to invest in real estate. I took the 60-clock hours required to get my license (90-hours required now), but I never hung my license with a broker. Still, it was valuable experience. Feel free to message me if I can be of more assistance.

Investor · Watertown, NY · Member since 2015 · 225 posts · 88 votes

11y

and boom goes the dynamite.

Investor · Marysville, WA · Member since 2014 · 146 posts · 62 votes

11y

Hi @Devon Woodson and welcome to BP, from across the water and way up north here in Marysville!!

Let me start by saying THANK YOU AND YOUR WIFE FOR YOUR SERVICE AND THE SACRIFICES YOU AND YOUR FAMILIES HAVE MADE TO SERVE THIS GREAT COUNTRY!! GOD BLESS THE USA!!

Wholesaling is possible and perfectly legal in Washington state as long as it's handled legally. Wholesaling is NOT easy.

My purchase and sale agreement clearly states that it's assignable in the contract AND I write and/or assigns after my business name on the line marked "purchaser".

I don't know anyone getting in trouble for wholesaling, but if you want to be super legal with no grey areas, find a good real estate attorney that works with investors.

I recommend you start by focusing on a specific area near you. LOOK FOR DEALS!

The deal is everything. Without a deal you have nothing.

Take time to analyze those "deals" to determine if they are deals. This is the most difficult part because determining accurate after repair values and repair costs is not easy when you're new.

What courses did you take from Rich Dad Education?

-AA

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

11y

LOL, yes, just "look for deals". Pretty easy, just drive for dollars, look for the sign in the yard that says "DEAL HERE", then knock on the door and do your thing! Don't waste your time on a place that doesn't have a "deal sign".....the bigger the sign, the better the deal is! :)

Those who got a real estate license passed a test showing competence, much of that is forgotten especially if they are not very active.

Saying that an RE education isn't necessary to invest in RE is rather strange, the thing about knowledge is that is stored information, it doesn't come up unless it's needed. And, it comes up without realizing it, your knowledge is used, you may not realize it. It saves you time and money, you can recognize that deal, without a sign in the yard! It also keeps you out of trouble, you'll know how to act around others and not look like an idiot. It's good for your reputation too.

If you really don't know the game, you're not investing, you're gambling.

Don't forget, just find the deals, don't worry about how to turn a property into a deal, just look for the sign in the yard! :)

Investor · Marysville, WA · Member since 2014 · 146 posts · 62 votes

11y

Hi @Bill Gulley,

I did not scroll down the page all the way to the button that gives e the option to page 2.

No way would I have posted what I posted after reading your massively large and informative post! Thanks for that and I wonder how many people who are practicing agent/brokers can answer 30 of the 60! How many experienced investors can answer 30 of the 60 without looking them up?

It's apparent @Devon Woodson struck a nerve with you and I get it. So tell us how you really feel. LOL

I gather that wholesaling as a sole investment strategy really pisses you off and you consider it incredibly risky and a waste of time?

When I first started working on my real estate business, I too considered wholesaling. My real estate attorney cautioned me to be careful and with the new laws in Washington state, involve a real estate professional (attorney or licensed broker) in some part of the transaction, which would satisfy the law's requirements and make it legal.

Where are all of the full time wholesalers chiming in on this post defending themselves?

There have got to be some that have read this thread.

Maybe @Lori Valene could shed some light on the subject?

-AA

Investor · Watertown, NY · Member since 2015 · 225 posts · 88 votes

11y

I am going full time in 10 years or so. I have a few things to finish in my career first. I finally got orders to go active duty, but that becomes real when they're in my hands and I'm getting shipped.

I am by no means an expert at anything yet. But I do plan to defend wholesaling. It's an art.

While people like Bill will always drop some intense knowledge and make you feel like the hours/days/weeks you put in mean nothing.

Good wholesalers keep to themselves, they hide their buyers, they let the gurus teach you. They setup multiple traps for you to stop contacting them to stop daisy chaining, fake locks, and pretenders wether they are buyers, sellers, other wholesalers.

I may not have known a lot of those items, but I refuse to play on the sidelines. I am going to win and continue to win and I may lose some here and there, but I refuse to put people at risk, so I take on deals I can handle and if I fail, there is no loss other than my time. When I become an expert at wholesaling I will train other wholesalers. But I won't eat their profits, I won't make them pay for my knowledge, I won't steal their deals. I will teach them sweat equity, show them the bigger picture. I will help them become good to great wholesalers because as much as everyone hates them, wholesalers are needed. As much as buyers beat you up on prices because of their "evaluation" and "costs" mean you should give the property for free or damn near your lock price. Sellers go dark, buyers back out but wholesalers get the bad rap. I have only ever had 2 people tell me no. And only one of them told me why out of the 40ish people I've talked to. How does one learn the trade then? By being too stupid to quit thanks @nassar.

But back to the topic at heart. Just don't quit, don't stop learning and don't let anyone tell you that you can't or aren't smart enough or know enough to get in the game.

Get your license, it brings options, don't get your license it brings options. Find a golden buyer and sell your deals to them. Think abundance and don't get greedy.

4 Reply

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

11y

Originally posted by @Aaron Ramm:

Hi @Bill Gulley,

I did not scroll down the page all the way to the button that gives e the option to page 2.

No way would I have posted what I posted after reading your massively large and informative post! Thanks for that and I wonder how many people who are practicing agent/brokers can answer 30 of the 60! How many experienced investors can answer 30 of the 60 without looking them up?

It's apparent @Devon Woodson struck a nerve with you and I get it. So tell us how you really feel. LOL

I gather that wholesaling as a sole investment strategy really pisses you off and you consider it incredibly risky and a waste of time?

When I first started working on my real estate business, I too considered wholesaling. My real estate attorney cautioned me to be careful and with the new laws in Washington state, involve a real estate professional (attorney or licensed broker) in some part of the transaction, which would satisfy the law's requirements and make it legal.

Where are all of the full time wholesalers chiming in on this post defending themselves?

There have got to be some that have read this thread.

Maybe @Lori Valene could shed some light on the subject?

-AA

Your welcome!

Actually, a practicing agent/broker should get 80-90% correct, some will only miss a couple, there is nothing there that they didn't study and they were tested on the materials and passed!

Like most newbies to BP, you read one or two posts and put a label on someone as a "wholesale hater", not true, you need to read more. You don't need to read 19,000+ posts, just those in the past 18 months on wholesaling.

Wholesaling doesn't "tick" me off, ignorance does, but ignorance will always be with us and everyone is ignorant about something. Just that people shouldn't be ignorant about what they do for a living.

I have no idea who Lori is, or her motivations, or experience or her education or the depth of her knowledge, but I'm not getting involved with another thread of arguing points as there are already plenty of threads like that. Looks like you called in someone to battle for your opinion.

Regardless of the industry, those with a better education make more money. There are exceptions, but who wants to try to be that exception when the deck is stack against them? That's either foolish or just plain lazy. But, good luck with that :)

Investor · Marysville, WA · Member since 2014 · 146 posts · 62 votes

11y

Originally posted by @Bill Gulley:

Your welcome!

Actually, a practicing agent/broker should get 80-90% correct, some will only miss a couple, there is nothing there that they didn't study and they were tested on the materials and passed!

Like most newbies to BP, you read one or two posts and put a label on someone as a "wholesale hater", not true, you need to read more. You don't need to read 19,000+ posts, just those in the past 18 months on wholesaling.

Wholesaling doesn't "tick" me off, ignorance does, but ignorance will always be with us and everyone is ignorant about something. Just that people shouldn't be ignorant about what they do for a living.

I have no idea who Lori is, or her motivations, or experience or her education or the depth of her knowledge, but I'm not getting involved with another thread of arguing points as there are already plenty of threads like that. Looks like you called in someone to battle for your opinion.

Regardless of the industry, those with a better education make more money. There are exceptions, but who wants to try to be that exception when the deck is stack against them? That's either foolish or just plain lazy. But, good luck with that :)

Trust me, Bill. There is no way in hell I am trying to argue anything with you! I am all about education. That's why I'm here and asking you questions. Trust me, it would be much easier to stop following this thread and move on, but I am learning every day as everyone should be. Just looking for clarification on the subject of wholesaling from your perspective. It's very apparent you are extremely experienced and educated and I'm interested in helping @Devon Woodson find a direction/starting point to get involved in real estate. 90% of everyone who reads this post can learn a lot from it, I'm sure. There is so much going on in this thread, I'm sure Devon has stopped reading by now or is extremely confused on where to start.

So your opinion is that getting a broker's license should be the first step in beginning a real estate investing career and not a single transaction should be done without involving a licensed broker or real estate attorney?

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

11y

@Aaron Ramm

You said;

"and not a single transaction should be done without involving a licensed broker or real estate attorney"

I sense a sarcastic tone, just they way I read it.

This thread is about wholesaling, not buying a property or leasing one, often you don't need a Realtor or really "need" an attorney.

I doubt you'd get a Realtor involved in wholesaling, maybe there are a few attorneys who might assist, but they could be hard to find too, as to just assigning contracts as a business operation.

Search the internet for "cognitive bias" that is pretty much the mental block and attitudes of those who advocate wholesaling, without a license, as a business, without the knowledge of the basics of real estate. For those interested in an education, how we think and justify what we do is an interesting aspect, it's good for self examination.

Learn the basics of real estate before trying to deal in real estate, you'll be ahead if you do. Good luck :)

Investor · Marysville, WA · Member since 2014 · 146 posts · 62 votes

11y

Originally posted by @Bill Gulley:

@Aaron Ramm

You said;

"and not a single transaction should be done without involving a licensed broker or real estate attorney"

I sense a sarcastic tone, just they way I read it.

This thread is about wholesaling, not buying a property or leasing one, often you don't need a Realtor or really "need" an attorney.

I doubt you'd get a Realtor involved in wholesaling, maybe there are a few attorneys who might assist, but they could be hard to find too, as to just assigning contracts as a business operation.

Search the internet for "cognitive bias" that is pretty much the mental block and attitudes of those who advocate wholesaling, without a license, as a business, without the knowledge of the basics of real estate. For those interested in an education, how we think and justify what we do is an interesting aspect, it's good for self examination.

Learn the basics of real estate before trying to deal in real estate, you'll be ahead if you do. Good luck :)

Nope, no sarcasm in that statement. My real estate attorney works with investors on a regular basis and informed me that wholesaling is legal in Washington state as long as a real estate professional is involved in the transaction. He offered to open escrow on property I got under contract to satisfy the law if I was to wholesale it. That would be involvement in the transaction by a real estate professional.

Devon Woodson

OP

Full-time Student & Father, WorldVentures · Rochester Hills, MI · Member since 2015 · 11 posts · 1 vote

11y

I have read this thread about 3 times now and I feel like I still haven't even gotten my answer. My question was to put yourself in my shoes and tell me what YOU would do if you were me with all my complications.

@Bill Gulley I bet Barbara Corcoran or Donald Trump can't even answer 30 of those questions so how is it that I ABSOLUTELY need to? I have been listening to the BP podcast for about 3 weeks now (10 episodes at least) and EVERY single person on the ones I've listened to has the exact same story, they came in and succeeded through trial and error. Just right now I'm listening to #77 with @Michael Quarles who has worked his way up to 1000 Wholetail deals (most likely more now). I'm trying to stay open-minded because I do realize I am the student and not the teacher. However, I feel that you were just pencil measuring. The whole concept of "I know more than you." Which is a game I am in no position to play, obviously.

Think about it though, when I go to a seller they probably won't know 10 of those questions. They just want to know they can get their house sold at a fair price. When I go to a buyer, he'll most likely know more answers if he's seasoned like you. However, let's just say hypothetically you are the buyer and you go and buy a property from a Wholesaler. What would be your reasoning for doing so? Because the numbers were accurate and you saw a potentially great deal, right? You wouldn't sit there and interview that wholesaler with those 60 questions, so why do I need to know that, right now, at this very moment?

Anyways, this has nothing to do with my question. I'm not defending wholesaling by any means. I'm not even sure what strategy is best for me which is why I asked my original question, What would YOU do in my given situation? I'm not scared of pulling the trigger, I just wan't to know which pill to take to start my journey down the rabbit hole...

Are you implying that you would hold off and make sure you learned everything before doing anything? If so, my only argument is that everyone learns differently. You sound like the type that can perform brain surgery after reading a book. However, not everyone learns like that. I can tell you for a fact that if I went into real estate after taking a class and passing a test, I'd probably be in the same position I'm in now, asking the same question, What do I do from here?

I feel like you never answered my previous question either, What is the theory of Real Estate? Those 60 questions go back to the mechanics of it, right? Or am I wrong? The way you used the word 'theory' makes me think of the reason why we do the things we do; the ethics and moral values behind those mechanics, etc. So I guess the problem really IS who do I listen to?

But I will say thank you to everyone who gave me direct answers, and even more to the ones who even went out of your way to contact me or refer me to someone else. Ya'll the real MVP's! LOL

Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes

11y

Originally posted by @Devon Woodson:

I have read this thread about 3 times now and I feel like I still haven't even gotten my answer. My question was to put yourself in my shoes and tell me what YOU would do if you were me with all my complications.

@Bill Gulley I bet Barbara Corcoran or Donald Trump can't even answer 30 of those questions so how is it that I ABSOLUTELY need to? I have been listening to the BP podcast for about 3 weeks now (10 episodes at least) and EVERY single person on the ones I've listened to has the exact same story, they came in and succeeded through trial and error. Just right now I'm listening to #77 with @Michael Quarles who has worked his way up to 1000 Wholetail deals (most likely more now). I'm trying to stay open-minded because I do realize I am the student and not the teacher. However, I feel that you were just pencil measuring. The whole concept of "I know more than you." Which is a game I am in no position to play, obviously.

Think about it though, when I go to a seller they probably won't know 10 of those questions. They just want to know they can get their house sold at a fair price. When I go to a buyer, he'll most likely know more answers if he's seasoned like you. However, let's just say hypothetically you are the buyer and you go and buy a property from a Wholesaler. What would be your reasoning for doing so? Because the numbers were accurate and you saw a potentially great deal, right? You wouldn't sit there and interview that wholesaler with those 60 questions, so why do I need to know that, right now, at this very moment?

Anyways, this has nothing to do with my question. I'm not defending wholesaling by any means. I'm not even sure what strategy is best for me which is why I asked my original question, What would YOU do in my given situation? I'm not scared of pulling the trigger, I just wan't to know which pill to take to start my journey down the rabbit hole...

Are you implying that you would hold off and make sure you learned everything before doing anything? If so, my only argument is that everyone learns differently. You sound like the type that can perform brain surgery after reading a book. However, not everyone learns like that. I can tell you for a fact that if I went into real estate after taking a class and passing a test, I'd probably be in the same position I'm in now, asking the same question, What do I do from here?

I feel like you never answered my previous question either, What is the theory of Real Estate? Those 60 questions go back to the mechanics of it, right? Or am I wrong? The way you used the word 'theory' makes me think of the reason why we do the things we do; the ethics and moral values behind those mechanics, etc. So I guess the problem really IS who do I listen to?

But I will say thank you to everyone who gave me direct answers, and even more to the ones who even went out of your way to contact me or refer me to someone else. Ya'll the real MVP's! LOL

LMAO young man, Barbra probly can anser those question, Donald is an idiot marketer, he probably couldn't answer what real estate is, if you had a silver spoon in your mouth when you were born, you too could be a sociopath and liar, he got nailed for fraud on his book/courses, so he's not someone to follow IMO.

There were no ethics in those questions, just factual applications.

Learn real estate before trying to deal in real estate! :)

Dana WhickerPro Member

Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes

11y

Uh, Barbara could answer all of those questions. Donald maybe 30.

Investor · Watertown, NY · Member since 2015 · 225 posts · 88 votes

11y

You're both right and both wrong. One assumes no knowledge and the other assumes no action/help. Bill is right that you need knowledge to be successful and continue to be successful. Take your time and learn the necessary keys to get your feet wet. Then get a few deals under your belt, then immerse yourself in the knowledge because he doesn't want you to leave money on the table. If you take his comments at face value, you'll lose every time. Bill is a very wise man and with wisdom comes reading between the lines. If you think he wasn't helping you or had your best interest at heart, keep reading until you understand his words. He wants you to be successful so he showed you the whole picture instead of the shiny object. He showed you how to avoid the shiny object. But you're also right in that you don't need to know everything to be successful. I've met many successful uneducated people, but bill doesn't want you to be like that. He wants you to be an educated successful investor and not some 2 pump chump. That did a deal or two and then got out. He may not be as direct as I am, but he sure as hell gave you more than anyone else did.

Alexander Schwartz

Real Estate Agent · Saint Louis, MO · Member since 2015 · 35 posts · 14 votes

11y

Read through the whole thread, very informative! Still, was interested to see where someone would point him.