Wholesaling mentor holding me back?

Question

Happy Friday, BPers!

This is my first BP post, which I am compelled to write based on my experience attempting to wholesale with a mentor.

The background: I signed an agreement with local (Philly) wholesaler that says we must use her LLC, her buyers, and her contract for my first three wholesale closings in exchange for her "mentoring" me.

However, I am concerned that the arrangement is stifling my personal growth and money making ability.  Over the past two months, I've been securing leads through mail marketing, bandit signs and driving for dollars.  I pay for everything and do all the running around meeting with prospective sellers.  Our agreement requires that I take all incoming seller calls, schedule property visits, take photos during property visits, research outstanding taxes and utilities, and run all of it through the mentor.  Unfortunately, she is slow to respond to this information and sometimes sends contradictory information about whether and for how much to make offers.

During the past two months, I've secured about 40 leads, but have only signed one contract with a seller in large part because the mentor torpedoes the leads - either through prohibiting offers or making outrageously low offers, which aren't even in the same ballpark with what the sellers ask.

While I realize it's wholesaler suicide to sign a bad contract, i.e. price is too high, with a seller, I am concerned that the mentor's buyers list is very small and inactive.  Actually, it seems that if she can't match a specific buyer, in advance, to a potential deal, she scuppers the whole thing.  And since I must do three deals with her before I can do one with my own contracts and buyers, we could be playing this game a year from now and not have done three closings together.

So that's the skinny.  I'm looking for some seasoned guidance from the BP Nation on how I can improve my situation and move from this ponderous approach to closing on good deals.  I've been building my own buyers list for the past month and it's near 6,000 entries (obviously, I need to build rapport with buyers, but I can't do that if I'm prohibited from sharing deals with them).  Should I suggest to the mentor that we try marketing to my buyers list?

Wayne Brooks · Answer

Cut your "mentor" loose, today.  I seriously doubt you have any kind of enforceable contract that will keep you from going out on your own.  Your mentor may tell you it's enforcable, but the likelihood of them pursuing it, let alone prevailing, would be minimal.  I would start with "this isn't working out, I'm parting ways", but be prepared to go to "good luck, sue me, see ya'".

Jeff Morelock · Answer

You're being used and abused. You don't need a mentor - you have thousands of them right here.

Antoine Joseph · Answer

This post sounds like you've already made your mind up that your "mentor" is a poor mentor and/or poor wholesaler. Go do it yourself. Stop using her stuff, build your own buyers list and get everything under contract that you think you can sell. I will tell you tho, there is a lot of grey area in wholesaling, everything will not be cut and dry. You should go succeed and "fail" on your own, you will learn plenty from it.

Justin Fernandez · Answer

Don't do it.  One or 2 bad deals is enough to get circular filed among serious buyers.  Trust that your numbers are right and that you did your due diligence.  If you're not confident, then post your deal here.  Someone will tell you yes or no and/or how to improve it.

Troy Fisher · Answer

I don't think there is enough information here to allow us to help you make a decision, is she explaining to you, why the prices on the leads need to be so low?  Is there a reason why she torpedoes the deals?  Are you learning and gaining value from the association?  Like @Steve Vaughan says, you should be learning from her, and she should be mentoring you.  If that's not the case, then yes it's time to move on.  If you are learning it maybe that you are making common wholesaler mistakes and not finding enough value in the deals to make it worthwhile.

Regardless, of whether you continue or terminate your contract, you should be building your own contacts in the industry.  If you do 3 with her but haven't meet any buyers you are going to be stuck dealing with her.  I know people who are doing this type of mentoring successfully, but I like mentorships that work the other way:  A mentor who has a marketing system in place, and helps you build one with their own $$ and you work together on the deals.  Kind of like a VA or PA.  It strikes me that as a Wholesaler, where your deals come from is the biggest part of it, and just letting someone else do it, is going to limit both parties success.  That to me is unacceptable.

Steve Vaughan · Answer

A true mentor should be clearly explaining to you why or why not you guys are or aren't pursuing leads.  How else do we learn?    40 leads in your short timeframe sounds outstanding and she should also be congratulating and encouraging you @Ryan Igbanol!

I'm with @Wayne Brooks on this.  Kick this shady lady to the curb and go do your thing!  Follow up with some old leads/offers and see what happened while you're at it.

Jay Johnson · Answer

Is it the one on YouTube with the short-hair from (Philly) with that name, also? If it is, I remember her saying she never had a mentor. She said she learned by watching others do it. If you need a mentor, cool. If you don't, cool. If you see proof she knows what she's doing, maybe, you stick with her. She might know something about those leads as to why they were not good, but if she is mentoring you, she should have given you the reasons why. If you never see her doing any deals at all and she claims she's active and all you see is her coaching people, then, if you still want a coach, I would try to find one who was actively doing deals who you could, basically, be their assistant and see how everything works. You could see how they market, how they screen the lead, how they know what lead to pursue, how they talk to sellers, how they negotiate with sellers and buyers, how they built their list of real buyers, how they have a relationship with title companies/closing attorneys, see how they build relationships with realtors, contractors and other professionals, see how they do the paperwork, how to handle problems when they come up, how to know what leads that are a no for now, but they know that one they should follow up with a month, or so, later and everything else that goes with the business. People, actively, doing deals might not want to train the competition, so, be ready for that.

Much success to you!

Steve Babiak · Answer

That name sounded familiar - a BP member too with two profiles:

https://www.biggerpockets.com/users/TheREInvestor

https://www.biggerpockets.com/users/TheREInvestor2

Jay Johnson · Answer

I'll never understand some people. Why would you "stick" someone for a few bucks, and ruin the chances of working together in the future to make more money? That's just dumb to me, and it speaks to your character.

That's alright though. You can learn the business, and crush it without her!

Carolina E. · Answer

@Ryan Igbanol I was just curious, did you ever close a deal with your mentor?  And what was she charging if you don't mind sharing?  I have followed some of her videos and like some of her stuff.

Wholesaling mentor holding me back?

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