Wholesaling help?

Question

Hey guys,

Since I'm new at this, I want to start wholesaling to gain enough money to invest on flips and rentals.

I've read Nick Ruiz's Flip book, I'm not sure what BP view is on him or his book, but i found it super informational. It broke down on a lot of the material for a beginner, even though 2/5 of it was mind set talk and his raise from his bankruptcy from the crash. Either way, I somewhat know what to do. He had few formulas and explained how he calculated his offers; my father has been in the painting business for about 20 years and knows what it takes to repair a house, so I have basic understanding on calculating the repairs. Of course l need more experiance and I'm nowhere near being a pro at it.

I've been doing some reading around here and I realized, wholesalers have a bad reputation and most investors dont bother looking at their deals.

So I want to know how and what can a wholesaler do to get your attention and willingness to work with them?

I was planning on being honest and letting them know I'm new to wholesaling, if i could contact them if I'm able to find a deal. I don't want to come off as a arrogant brat with the "best deals ever" type of wholesaler.

Finding the best way to contact and interact with investors is one reason why I havent started yet, the fear of being labeled as that kind of wholesaler (without knowing it especially).

Account Closed · Answer

My advice to new investors is to start wholesaling properties. This does not require much of any marketing money to start and to get deals closed.

First pick a neighborhood that you are either in or close to. Driver around all the streets and look for vacant houses. (Not by using Google maps because they can easily be outdated pictures) There should be some.

Then look in the county assessors website to find the owners. it should give their name and mailing address. Send them a letter (not yellow letter because they are getting dozens of them) telling them you found their house to be apparently vacant. But if it is obviously abandoned, say so in the letter. Tell them you will pay them cash for a quick close. Write it up as a personal letter.

When you do all that, then contact a local RE Agent to give you a list of all the houses in that neighborhood that have sold in the last 5 years with all cash. That typically is investors. Then again go to the assessors website and find their name and mailing address. Also do a name search on the assessors website to see how many other properties they own. If they own several they are obviously investors.

Once you get a response from the seller of the vacant house, negotiate a deal to buy it for all cash and get it under contract. Then immediately contact all the cash buyers you just found that buy properties in that neighborhood and tell them about the house and would they be interested in buying it. If you negotiate a good enough deal that pays you then complete the transaction with the investor to buy the house you have under contract.

Once you have done all that with that neighborhood, go to the next one and 'rinse and repeat.'

I hope this helps.

Steve Anderson

Kerry Baird · Answer

If you own the property, there is no "dealing."  Double-closing, where you go on title even if only for a few minutes, is a viable method.  You don't act as an agent, don't create the appearance of "agency," when you own the property. Transactional funding fits the bill.

Jorge Vazquez · Answer

@John Thedford
I appreciate the criticism and the advice, but i already know your views on wholesalers from your previous comments on other threads.
I respect your take on this and wanting to do things by the book, but please don't label all wholesalers as scammers and/or frauds.
Dealing with my wife's old school step-father, I've come to realize that old school will never understand new school and vise versa.

Jorge Vazquez · Answer

@Adrienne Bryson Oh yeah, that's why I haven't looked for deals just yet. I try to plan things out before I jump in and make a promise, I don't want to look like a reckless wanna be without having a strategy. I have 2 investors willing to work with me, the first is a starting investor (Used to be a CFO but now owns a garage floor company.. also my old boss) and the second is one of my contractors that used to house flip for a living a few years ago. Both are rather unreliable at the moment, so I prefer not to put all my eggs in one basket with them.

But, for the first time, how can I show them I'm serious without having a deal yet?

@David Bokman Yeah I agree. Sales and marketing is something I've been working on for the past year or so (before my interest in RE). The cost of the property I'm practicing, between being the painting industry and having relatives and friends that work in different parts in contraction gives me a general knowledge of it, again, no where near being a pro at it though.

@Lesley Rodriguez I agree! I saw an interview with him and later found a webinar of his that taught us all about it. Thank you! Good luck to you  too!

@Shaq Jones I actually thought finding buyers were the easiest, but reading through here, I understood more why a lot of investors look past wholesalers and why a lot of direct mail gets thrown away. I wanted to ask investors point of view on some things a beginning wholesaler can do to get their contact info and preferences without having the first deal yet.

I agree though, but it sucks that some wholesalers just try to give the rest a bad name, the ones who are actually trying to do the right thing.

David Bokman · Answer

I say this probably everyday on this forum but wholesaling is a sales and marketing business...Period!!! And the reason why most "wholesalers" get a bad reputation is because most people WITHOUT sales and marketing skills think that wholesaling is the easiest way into the real estate industry and have zero clue what they are doing when it comes to appraising a property, how to negotiate , how to market, construction cost, etc etc etc...I can go on and on here!

Just like with any other profession or business there are good and bad examples of each. Unfortunately for some reason people seem to think anyone can just jump right into wholesaling wthout any experience and start making money.

Adrienne Bryson · Answer

The best way to attract buyers is with good deals.  Seems a little counterintuitive so let me clarify... I'm not saying you should go out and get houses under contract without putting any thought into your exit strategy.  What I am saying is find a buyer or two or three that are definitely looking to buy a deal if you can find one.  Go out and find a deal that fits what they're looking for.  In the meantime, find as many potential buyers as you can.  You can be shopping for deals and buyers at the same time, knowing that if you don't find any more you at least have those few to fall back on.

Once you find a good deal, and it must be a good deal, contact the most promising potential buyers and ask if they're looking for wholesale deals.  In my experience when you contact buyers (or they contact you) for the first time, they want to see deals you have available.  Being able to show them an actual deal will let them know you're serious and not just another wannabe wholesaler with a lot of talk and no results, and make them more receptive to working with you even if you're new.

Jorge Vazquez · Answer

@Stephen Anderson Thank you! That actually gives me a better starting point than what I was planning@David D'Errico I just worry on not having investers to buy the property or even look at it. Being on here and reading about how some wholesalers make the rest look like scum doesn't really help.But thank you for the advise! I'll definitely practice!

David D'Errico · Answer

I would not be worried about approaching investors just because you are new.

"So I want to know how and what can a wholesaler do to get your attention and willingness to work with them?"

I don't  mind working with a new wholesaler. The thing that is MOST important is that you have a good deal. So learn how run comps and calculate rehab cost. Look up 70% rule, that's just a starting point.  If an investor doesn't want your deal then it's probably too thin and it isn't a deal. Analyze everything you see; look on Zillow in your area and practice running comps, not zestimate that's junk.

Here's two link on comps:

https://www.biggerpockets.com/blogs/3539/48938-the...

https://www.biggerpockets.com/blogs/5051/41444-fli...

Look on Craigslist keyword FSBO, investment, investor deal, etc

Just start analyzing anything you can to get the practice.

Also look in the marketplace on BP or look up other wholesalers near you and see if they have posted any deals. Run your own numbers on those. You get the point.

Good luck and don't give up

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