Wholesaling: too many failure points?

Question

Hi BPers,

First, thanks to all who replied to my first post about possibly walking away from my wholesaling "mentor," who I suspect is holding me back.

As I continue learning about the wholesaling business while ramping up my marketing and expanding into new geographies, I wonder about the fundamentals of the business model.  In my experience, there are A LOT of failure points that stand in the way of moving from finding leads to closing day a.k.a. getting-paid-day.

When folks say that wholesaling is hard work, I haven't yet seen anyone describe it as so because of all the failure points built into the model.  Specific to my situation, I'm finding that unreliability is the most significant failure point.  I'm seeing unreliability among prospective sellers, folks who say they're serious buyers and folks I send to look at a property to take photos and analyze it, etc., yet don't actually visit the property.  With sellers, I've seen some who proclaim their dire need to sell yet don't return phone calls or  give you phone numbers that are disconnected within days or go to voicemail boxes that are full.  With buyers, I'm experiencing, among other things, folks who give me their contact info, tell me they're interested, yet don't return e-mails.

Frankly, it seems the only reliable aspect of wholesaling is vendors - list vendors, mail vendors, etc - who gladly take my money for services rendered.

So BPers, I'm hoping something's gotta give, but I'm also not trying to hit $10,000 grand out of pocket on marketing and other expenses, and still not have done a deal.  I'd appreciate your insight into my conundrum.

Alex Franks · Answer

My friend where  to start answering this. First and foremost this is not an easy business. So don't give in to negativity. At the same time its not the missed or answer calls. Its the ones you land and follow up with your self. Regroup and start over. Some times the best place to go back to is the place that got you started .Ask your self why ( that's confusing ).  I been involved in this business for 16 years. Still learning every day. I still love the business. It is my passion every time I talk about real estate. It shows, and I can talk for hours about this business. Promise that's the truth some times to much.

I was recently super stressed. Building 24 new construction homes, currently have 14 retail rehabs in progress. So went to visit a very wise man. ( my father ) Simple cup of coffee and good conversation. My dad told me to go back too what got you here today. What got me here today. I had to think for minute. Then it was simple answer.  Networking on sites like Bigger Pockets, going to local rei meeting. Jumping back in  networking , helping answer questions on real estate. Talking about real estate. It was very refreshing for me personally.

So you got great advice from every one above. I'm just throwing in my two cents..

Hope this helps

Alex

Eric H. · Answer

@Ryan Igbanol you said a lot there buddy. And it seems all bad. Smile. Besides, it feels better than frowning.

Wholesaling is challenging, competitive. But that's what makes most things in life satisfying. Enjoy the journey. Smile again.

Disclaimer: I started my direct mail campaigns at the beginning of the year. Deal #4 is set to close Oct 8. I have not gotten rich by any stretch of the imagination. I have pretty much broke even. But the journey has been great and I have learned so much. 2016 is set to be amazing!!

As for your struggles........If sellers aren't returning your calls then they aren't motivated. Bottom line. You need motivation and equity. If you don't have that there is no need to waste your time.

Buyers......try email and calls. I have a form set up on my website where buyers can input their investing criteria. On that call, invite them to lunch. You pay. Pick their brain about their investing strategy. Buyers will also take you more serious than the wholesaler that just mass emails mediocre deals. Furthermore you can develop a marketing campaign focused on exactly what the buyer is looking for.

Boots on the ground.....fire them immediately. Where are you investing? If you need some boots on the ground in Baltimore City and surrounding counties give me a shout. You have to be firm with any partners/employees. If they aren't performing to your standards let them know immediately.

Happy investing and keep us updated about your journey!

Sincerely,

E. Harris

Ryan Igbanol · Answer

All,

Thanks for your responses.  I recently passed the PA real estate exam and have interviews with two large brokerages near my residence.  I hope to learn a lot more about various aspects of real estate - whether it's selling residences or wholesaling - while growing as an agent.

Daniel Nolan · Answer

i presently use my DM  for Motivated sellers to find  creative financing deals. I mailed Absentee owners in my market area. I often find sellers who are fellow investors -rehabbers and buy & holds. These can be easily converted to possible Cash Buyers. So while I'm searching for buying opportunities I often find qualified buyers for my wholesale deals. Since I'm also licensed I can get good MLS comps (ARV) and can estimate repairs costs pretty accurately.  The hard part is finding that desperate seller that needs friendly persuasion who's willing to sell at a deep discount for fast cash. I still need help with that.

All feedback is greatly appreciated

Dan Nolan

Member Investor

Orlando Fl

Nathan Paisley · Answer

@Ryan Igbanol good points from above especially what @Chris K. said its a process. Meaning you don't know what you don't know and what you don't realize is you're weeding out the wannabes from the true players. It takes time to build buyers, sellers, agents, marketing etc... 1 thing I learned early on is that if you wanna succeed, you can't rely on others to get things done quick or even the right way (your way).

It's a numbers game trust me that's why I hate dealing with sellers lol but when you find a motivated one it'll slap you in your face and put a grin on your face as big as the Grand Canyon.

Marketing takes time and money typically months for it to pay off. There are exceptions of course including my first deal but it comes down to trial and error. You've already learned what's not working so now you just need to figure what does work.

Go to some rei meetings and talk to the people actually buying in you're local area. They have money or they know people with money.

Bill R. · Answer

@Ryan Igbanol

If it was easy everyone would be doing it. Wait, everyone is doing it!!!!! But only a few are doing it correctly. One of the difficult parts of wholesaling is to find a deal that is truly a deal. If you read the posts here that say 1st deal - what to do? 99% are not even close to a deal and people are trying to manufacture a deal. The only way is to get out there and market to people that fit the characteristics of motivated sellers and go through all the B.S. calls till you find the one that is really motivated - it is a great thing to hear that seller say" I just want out and I need it quickly".  Marketing, patience, and analyzing deals correctly is the name of the game. If you don't want to spend a ton of money - get on your city/town assessors site or go down to the town/city hall and courts and make your own list's - it takes time and you need to be free during the weekday's but there is always a way. This is definitely a hurry up and wait type of business.

Chris K. · Answer

I wouldn't consider those "failure points", those things are part of the process. At the end of the day it's a numbers game, get thru 100 of the BS'ers and you'll eventually get a deal.

Karl Krentzel · Answer

I'm sorry to hear about your experiences.  Take heart... I just got off my Coaching calls with some of my students, and one just locked up a 42k Wholesale deal, and another just completed his 18th wholesale deal so far this year.  There's nothing special about special people... it's what they do.

Have a Powerful Sales Day!

David Bokman · Answer

I'm not sure my response will add much more value than some of the other posts already posted. But wholesaling regardless of which industry is Sales and Marketing. Unfortunately if you don't have a background in either or both of these fields wholesaling will be VERY challenging to say the least......and this in my humble view is the main reason why most people either fail or give up.  Some people might get lucky a get a deal here and there....but if you want long term success, you have to understand how to build that, and that only comes with time and experience. I have been doing sales and marketing for over 15 years and I'm still learning everyday........if your already getting "frustrated" this might not be the business for you....

just my 2 cents.

Curt Smith · Answer

@Bill R.

Bill what lead sources have you found to be most motivated today?

I hear delinquent real estate taxes are very good.  I've not mailed these because in GA they are not on line and harder to get in list form.  Google your counties tax commissioner site, call, check on line for delinquent taxes lists.

Wholesaling: too many failure points?

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