New to wholesaling, where to start?

[Andrew McManamon]

Hello everyone, I've been doing a great deal of research about wholesaling and I'm getting a better understanding of how it works, but where do I start? I understand the concept of finding motivated buyers and sellers, the contracts, assignment or double escrow, but what's the best way for me to just dive right in without having to spend a fortune on mentors who turn out to be real estate gurus? Also, I'm 19 years old and don't just have a lot of money to throw around. Any advice would be much appreciated! Thank you, Andrew McManamon

[Doug Price]

Andrew,

I'm fairly new to the game, but I am learning a lot by trial and error. At this point I am marketing lightly and seeing a lot of traction from the marketing I have completed. Here is what I would recommend on getting started:

1. Start. Start something. Start anything. I studied for over a year before I put the wheels into motion. Way to long. I had head knowledge but no action. It was killing me with overthinking everything.

2. D4D was where I started...waste of time for me. Every response I got from homeowners (mailed them a letter) were situations that had big problems. They owed more taxes/penalties against the property than it was worth. Or they had judgments that far outweighed the value of the property. I spent a LOT of time chasing a couple of these to no avail. What it did provide me was a better understanding of my area and it also netted a couple of cash buyers (I called the for-rent signs I stumbled onto).

3. I also spent a lot of time getting my cash buyers list together. I set up an IFTTT on craigslist to send me the rentals posted in my area. As Tom Krol on "Wholesaling, Inc" podcast recommends I subtracted more key words than I searched for. Then I send this very simple mass email through GMass to every landlord; "Would you be interested in selling this property? Please let me know. You can also reach me at ###-####, call or text." I get about 60% response with this email. If they reply, "make me an offer" it is an investor and I reply with what I am doing as a wholesaler offering to work for them to find properties for their portfolio. If they reply with a call or text, they are a potential seller. This has been big in building my buyer list. You can also call the "cash" buyer bandit signs in your area. Tell other wholesalers who you are and what you're doing. You may stumble onto a person who will willingly help you get started. Some however you will learn to be keep at arm’s length. Unfortunately, I have discovered a lot of sharks in the water in the wholesale aquarium. You should be able to figure out which is which with a quick phone conversation.

4. Now that you have buyers calling you find out what they specifically buy and where. Ranch, 3/1, north side, <$70k, <$15k in repairs, 4 units a month, etc.

5. Get your offer spreadsheet put together. Determine what you need to get properties under contract for your buyer to bite. Every market is specific and every buyer is even more specific. You will need to build this based those two criteria. Once you have this spreadsheet in place you should be able to plug in the property numbers and generate a fast offer within minutes.

6. Get your contract in place. Either pull a contract from a place like uslegalforms specific for your state and/or talk to a local real estate attorney. I skipped this step and I regret it. I am know working priority one to get this fixed. It is highly unlikely a single page contract can be legal (like the ones almost every guru promotes) given the vast amount of required information in a real estate transaction.

7. Go shopping for what your buyers want. Agentpro247 is an inexpensive (~$20 a month for up to 2000 leads) online list source that I use. Build your list and try out yellowletterscomplete for your mailers. ONLY send first class mail! Standard letters get tossed in the trash. We'll call that, trial and error on my part.

8. Pick up the phone when it rings, but also set up a voice mail that requires the caller to leave their name, property address, and phone number. Sometimes you can gauge a seller’s level of motivation by what they say, or don't say, in their message. And for crying out loud, call every number back regardless of a message left, or not. I closed a $6k deal from a guy who left no voice mail.

9. FOLLOW UP. My second deal was a lady I had written off. She wanted way too much for her property. But I called her back a few weeks later. She dropped her price on the phone from $80k to $65k. My offer had been $58k so I knew she was motivated now. But I wouldn't have known if I didn't call her back. I ended up making $5k on that deal. I use pipedrive for my cheap CRM fix. That will probably change in the near future as it is very limited.

10. Get the house under contract with your contingencies in place. I ask for a 7-day inspection time frame. This allows me to get my buyers in the house and/or renegotiate the price if needed. Or back out if the inspection is negative.

11. Get the contract assigned. Hold the seller's hand and keep the buyer informed through the process of closing. Seller's will want to know everything. Buyer's most likely have done this many times before and just want to be kept in the loop. Also, ask your buyers what title agency they use for their deals or which ones are wholesaler "friendly". I promise you buyers will know. The right title agency will save you big headaches!

12. Read the book Profit First. You're going to need to because you just got your first payday of many more to come Enjoy!

Hope this helps you get started,

Doug