Brand New to Wholesaling - What is step #1?

Question

Brand New Student of Real Estate - Currently self educating, but curious as to how I get the ball rolling beyond just reading and studying. How do I get the wheels turning on finding leads, and materializing my first wholesale deal? Just looking for general guidance.

Laurance Kevin Washington · Answer

@Zachary Peacock, welcome to the real estate frontier! If you're just starting out I'll share my mind with you. Wholesaling is the spear-point of finding viable deals. The process can work for most any type of property & is well accepted across all asset classes; still, it's most common to start with residential homes. But if you identify a multi-plex of any sort, take action on it!! Underwrite it as if for your own portfolio; heck, like it's your Dad or Mom's portfolio. Remember, though, to keep it simple, simple, simple. *Educate yourself (but not on the computer all the time).... You need to engage yourself in "learn knowledge": Podcasts, relevant literature, BP forums (like you've bravely done here) and I would even recommend a legitimate RE Investment course that'll only run you about $150 schnapps or less. If it ain't in the budget; keep it pushing. Like @Rene Montelongo mentioned: Get to every single RE meet up near you. Build actual relationships & never fear from opening your mouth to what your need... which at this point is INFO, CRITERIA, LOCATIONS, ZIP CODES, & YES AREAS CURRENTLY getting HEAVY REI ACTIVITY.*Get access to some lo-tech (any-type of tech that works for YOU) data holders. You need the following: County Property records, and the ability to discern what the map is telling you. You'll need a way to save & review the leads you'll capture from the various actions you'll take to attract deals. I use excel because I'm an Excel "Pro" of sorts. if you ain't got the Excel skill; keep it pushing another way. *Get in the car & Scout (preferably w/ an area map): Pen, paper, or tablet. Just be prepared to take photos of struggling, under performing real estate. Record the address & near by streets. Find a simple way to inform them of your serious interest to purchase the RE. Mail -knock doors- get them on the phone- & when you're ready open a way for them to find you online. *Build your Relationship Building Muscles: No disingenuous, halfhearted, moocher networking. Get to know people, find out how you can actually help them. Give more than you expect EVEN THOUGH it may seem as if you have nothing to give. Realtors (who understand investors will appreciate you), developers & builders usually have a hard time finding land. & active investors are eager to analyze deals from a serious newbie & will bite the right deal. *If you have a deal the money WILL come. Balance building that buyers list with taking action to get control of property or the contract at least. Always be honest & real with your motivated sellers. We don't need the car-salesmen stigma to get any bigger with investors than it is. No shady business. I hope this helps & I'm sure your on your way to profits!

Rene Montelongo · Answer

Hey Zachary, great question. One way to start building a great network of buyers is to go to meet ups. All of them and talk to everyone, you'll start meeting buyers. You can ask them what their buying criteria is. You can ask what dollar amount they buy at, what area they prefer, are they buy and hold or flippers. Some have a specific criteria, others just want the numbers to make sense. Then you know what to look for. All you need is one good buyer to get started, then build your list. Hope that helps!

Account Closed · Answer

Read a wholesale book.

Hugo Alves · Answer

@Zachary Peacock I would take the reverse approach on wholesaling. I would recommend finding your buyers, vetting them for what they look for, what a deal is to them, then going to find the deals. This will at least give you a sense of direction on what to look for and knowing you will have a buyer makes you more comfortable making an offer. Just a thought

David Dachtera · Answer

@Zachary Peacock,Just to mention, also, some states are cracking down on wholesalers, misinterpreting their activities. Then again, wholesalers - especially new ones - kinda "do it to themselves" by marketing the property rather than their position in the P&S contract. It's a fine distinction and, under the law, the courts are erring on the side of the sellers and agents/brokers.For maximum safety, plan on doing back-to-back closings. For example, close the purchase from the seller at 1pm using transactional funding, close the sale to the end-buyer at 3pm and use the proceeds to pay back the transactional funder while walking away with the excess as your profit.Avoid using the phrase "double close" or "double closing". Many people interpret that as an A -> B -> C transaction where C's funds are used to close the A -> B transaction which is illegal in most jurisdictions now (thanks to abuses by short-sale flippers).

Jeff Stephens · Answer

Hi @Zachary Peacock, congrats on getting started! I would echo what @Hugo Alves said: it's a great idea to start by finding some legitimate buyers (make sure they are active buyers with some experience and funding) and interview them to find out what types of leads they like to receive, how they evaluate those leads, etc. Then you can target your seller lead marketing accordingly, searching for deals that fit their criteria. Wholesaling is effectively a function of matchmaking, so the better you know both sides of the equation (the seller, their needs, wants, etc and the buyer (their needs, wants, etc.) the better off you will be. In my own business, I try to focus on "placing" deals with buyers. In other words, I try to have a curated approach, where I know my buyers well and with 1-2 phone calls I can "place" a deal with them. This is a stark juxtaposition to how many people go about it (tie up a property then blast it out to hundreds of "buyers"), and I'm certainly not saying one method is right or wrong, but I personally take the "placement" approach to connecting a deal with a buyer.

Jose Castillo · Answer

Spend 90% of your time actually looking for deals and talking to sellers. Make as many offer per day as possible. It's all a numbers game. Then you'll build a huge list of potential clients to follow up with and that's when the money starts coming in. It's all in the follow up. Systemize.

David Dachtera · Answer

@Zachary Peacock,There are two schools of thought ...One is that you should build your buyers list first. Find out what each wants to buy, then go out and "fill their orders", as Hugo Alves suggests. I, also, follow that line of thought.The other is that once you find a deal a buyer is easier to find because you actually have something to show them. The question, though, what is "a deal"? That tends to be a subjective judgement, even when it's based on numbers. One investor's numbers may be different from another's.

Rene Montelongo · Answer

Hey

Zachary Peacock · Answer

Thanks for the positive feedback. I appreciate the creative approach to cultivating leads by building rapport with buyers, which leads me to my next question: How do I find quality buyers and begin building that network?