How do I take my first step?

Question

Hello everyone, I've been wanting to do real estate wholesailing for the past two years now but I never knew how to start. I've been doing a lot of reading an watching videos on how to get started. My biggesst question is what is the first step that I can take to get me on the right path to start? I understand you need to find a seller, write up a contract, and find a seller. But I know there is a bit more to it then just those 3 factor.

Chris Piper · Answer

@Sierra Gordon I don't think you need a mentor to wholesale. It's a pretty simple process once you get it down. Here is the quick overview of the process:

1. Find a motivated seller

2. Do a walkthorugh of the property and see what repairs need to be done to get it into retail shape(move in ready)

3. Pull similar and accurate comps using a RE agent or Real Quest

4. Run your numbers: ARV(after repaired value)-30%-Repairs-Your Profit= MAO(maximum allowable offer). Never pay more than your MAO, and always offer a little less in your first offer than your MAO to leave you room to negotiate if needed.

5. Make an offer, and negotiate a purchase price with the seller.

6. Fill out and send the seller a purchase agreement. Make sure it ALWAYS says "this contract is assignable."

7. Go find cash buyers. Put out bandit signs, craigslist, advertise on here, etc.

8. Collect a non-refundable deposit form the cash buyer at the time of signing the assignment agreement with them.

9. Close and get paid.

As a side note @Ethan Johnson, whenever you put out bandit signs, since most cities forbid them and will fine you, always use a burner number or a Google voice number to ring to your cell phone. That way, the city or whoever can't link the number to you and can't fine you.

Sierra Gordon · Answer

Thank you both for your input and advice i am most certainly looking for a mentor as well as taking a another step towards my first deal. I have just started searching for motivated sellers in my area!

Thank you so much!

Best of Luck!

Sierra

Ethan Johnson · Answer

Sierra,

I believe whether you realize it or not you have already begun taking the first steps to start wholesaling.

Chris is right. You HAVE to meet other real estate investors near you who are like minded . Even if you don't end up working with them, sitting down for coffee or lunch to pick their brains about questions is priceless. You can only learn so much from videos podcasts and books.

I am also in the  beginning stages of launching a wholesale marketing campaign to try and find off market homes that still have some meat on the bone for me and the cash buyer I assign It to. So I am new at all of this too.

Your next step will be to decide how you are going to find deals. some different options are direct mail (which is what I decided to do), driving for dollars, which is driving around neighborhoods in your target market and looking for unkept, overgrown, run down properties that you can contact the owners to see if they will consider selling, or bandit signs which you would place around busy intersections or areas with a high volume of traffic that it will be seen. These methods have all proven to work but you need to stay consistent and have a plan.. My recommendation is when starting out just choosing one method and sticking to it. If you spread your self too thin I would imagine you may not see the productivity you were expecting and possibly end up quitting before you even get started.

A SIDE NOTE ON BANDIT SIGNS if that is what you decide to do. Make sure you do your due diligence on the laws pertaining to signage in your area/market. I haven't really been too fond of them, and hopefully someone can correct me if I'm wrong but I believe you can receive some hefty fines if it is against the law and you are caught with bandit signs in the area.

Those are just my thoughts on the topic. Once again I'm about as green as they come in the world of RE INvesting, but I've learned that answering easier questions on BP and interacting through the forums and Personal MessagesS will substantially increase your knowledge and networking skills overall.

Pm me if you have other questions!

BEST OF LUCK.

Ethan

Chris T. · Answer

@Sierra Gordon

Go network in your local REI, find the active wholesalers and offer them your value - in exchange of learning from them. Maybe even shadow them.