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Updated about 8 years ago, 09/23/2016
Feel like giving up!
I have been at this for a solid year with no success. I sink $850 per month in direct mail campaigns. I drive for dollars every weekend. I have great investors, but nothing to give them. What am I missing?
I've been told to find a mentor, but all the "mentors" I meet comes at a price that is well over $1,000 per month. If I were already making money, I'd definitely go for it but it doesn't seem to make sense financially right now.
Any advice?
Certainly depends on your state.... it appears difficult to wholesale here in Ohio for legal reasons that are beyond me so I suppose my perspective comes from that. I would agree that if your only reasoning is to gain MLS access than its probably not worth it but as a current wholesaler I would think you could expand your business with your license and not necessarily have to get into representing buyers and seller aside from your investors, which includes the resell side commissions for your investors who could use you for the sales on the tail end of their flips projects along with purchasing the deals you find for them on the front end. Just some thoughts, nothing wrong with wholesaling if its working for you, though if it's not a license is just a suggestion for possible path to follow.
As you are in Memphis I am stunned you can't find a deal in a year. There is something fundamentally wrong somewhere in your approach OR your expectations/criteria are unrealistic. I lived in Memphis for a year from overseas and flipped over 150 homes. Deals are everywhere. Everybody goes on about how tight and competitive Memphis is but there are deals everywhere. There is such a large percentage of unsophisticated owners and poor money management that finding a distressed seller is usually as hard as spending 5 minutes at IHOP or a liquor store.
I'm happy to help yo if I can, (NO CHARGE), but I need to know first what exactly are you looking for criteria wise? Stop wasting money on direct mail and let's get you into a deal so you feel like you are getting somewhere.
Feel free to PM or email me if you don't want to talk here in the forum!
There is a difference between getting your license and getting MLS access. Your license is generally a 75 hour course (can be done on-line) and a $50 test. You then sign up with a broker (some have $0.00 monthly fees and just splits).
DISCLAIMER: I am not familiar with your states licensing practices but I am sure they can be found at the department of state easily enough.
This allows you to advertise to the public. You are allowed to find a house and offer it up for sale on Craigslist, signs flyers, tv ads, internet sites etc. You are not trying to get equitable interest and claim to be buying for yourself or selling only to a "select group" of buyers. You are selling their house for them and if it doesn't sell they can go elsewhere. You will be working WITH a broker who has a vested interest in you succeeding. So a built in mentor of sorts (Find the right one). Although you will not have MLS access at this point.
Now that being said, if you want MLS access you have to pay for board fees etc (Can be a couple thousand a year). IMO, MLS isn't even the best part of being an agent, the fact that you can find a distressed house and make flyers or a FSBO's and make flyers and try and find buyers. Actual buyers like people who want a house to live in... or flip. You are licensed to perform those actions. You don't have to sneak into alleys and sell a contract for a house that someone owns and you want a fee, but it can't be on the HUD-1 form and blah blah. For $300 a license lets you be on the form and advertise to everyone. Buyers can say "I need a VA loan or an FHA loan and guess what? you can still work with them, still put in contracts and work with houses that are not "Cash only".
You don't have to run Open houses by any means, if you want to you can for other agents... or pick any HUD house and try and sell it, Open it on a Tuesday at 3:00 if you want to, get some buyers under your wings and contacts.
I wish you the best of luck in whatever you decide to do!
- Mike Cumbie
Looks like Dean is your go to guy! Good luck! Because of connections like this is why I enjoy the BP forums!
@Mike Cumbie Well said.
@Amanda Moore I'm hoping this post gave you some direction and certainly hope you are following up with @Dean Letfus with that offer he just gave to assist... gotta love BP, shows the power right there
Amanda Moore I think your best bet is meeting with some locals like Dean above. There are wholesalers all over the place making money. It is definitely a viable business model. It's just hard to get going.
@Amanda Moore before giving up take a look at this thread: https://www.biggerpockets.com/forums/87/topics/165331-started-2015-by-spending-15k-on-marketing
Oh dear @Mike Cumbie- as much as I love a good mention, I do believe this was intended for @Amanda Moore. ;-) Best of luck, Amanda!
@Amanda FishmanYea, I caught that too! :)
@Mike Cumbie I still got the message, even though it was misdirected. Thanks so much!
- Real Estate Broker
- Memphis, TN
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@Dean Letfus You are correct about finding deals in Memphis, TN. If you work hard the deals are there to be found!
I may start hanging out at IHOP more often... Realistically a 9% - 15% net return is doable after buying a distressed property and FULLY renovating it.
New roof, HVAC, all hard flooring surfaces (no carpet), upgraded kitchen and bathrooms, landscaping and more! These are my standards with every home I buy/sell.
The best way to minimize you risk is to buy more expensive properties, that may have lower returns (on paper) than the cheaper homes.
$800 + rents seem to have less issues.
- James Wachob
Dean Letfus
I'm curious. What are some of the other techniques you are using to get convertible leads other than direct mail.
I agree with you btw. Direct mail seems very low return.
@Tony Gunter it's what us kiwis refer to as hard work basically :-). I only know what works in Memphis and a number of things Amanda is doing are not going to be effective for her. I prefer more hands on activity like trolling websites for listings in misplaced categories, connecting with the right people in the right industries and as much face to face private seller finding as you can.
For example Craigslist, even though very spammy, has made me a lot of money. Some of the lesser known FSBO sites also.
Everybody has their own methods I just know what works very well for us!
Dean Letfus
Fair enough! I just wanted to be sure you had not discovered some secret sauce, besides BBQ sauce there in Memphis. Thanks.
Not really but my native market is very different and I found applying my kiwi strategies in the USA has been very successful. In New Zealand to buy one good deal you would expect to make up to 100 offers and you might end up doing due diligence on 20 or more homes before you buy one and that process can cost you over a thousand dollars per home!
We have no private note industry, no REO, no tax sales, no notes and liens industry, and bankruptcy stuffs your entire life for over a decade so I find America to be like heaven when it comes to RE. So many ways to make a dollar!
Quite a different world!
@Amanda Moore, in TN there is no such thing as an NOD which is why the title Co didn't know what you were talking about. Banks don't have to provide any sort of public notice before foreclosing on a property. At least, that's what all of my research has told me. I'm still trying to find a way to get that sort of information.
I have also recently started wholesaling in Memphis. I've done two deals this year (I took off for the summer because of some personal stuff) I sent out some direct mail this afternoon. I'd be happy to meet up sometime to compare notes.
My last deal was from a lead that came in from one of my websites. Do you have a website? What if anything are you doing besides direct mail?