wholesaling (setting up a platform)

[Matthew Izarek]

hello bp, I am active military and currently deployed. I have been researching and listening to podcasts and trying to learn everything I can about wholesailing. Listening to one of the podcasts and reading some of the ultimate begginers guide, they both mentioned sticking to one subject and focusing on everything dealing with it. wholesailing is what caught my attention and is what I want to pursue. To my knowledge I have a good understanding on how the process works, but of course there is always more to learn amd you never learn until you execute. By the time i come home i want to be to the point were i can close my first deal in a month. Right now I am trying to figure out what crm is best and exactly how they work. That being said I would apreciate helping someone else out either by doing cash for driving, if thats how its worded, or finding houses that are for sale for someone. Doing these things I feel will in a way get me in the game and help me better understand what things are like. So with all of this being said, does anyone have any tips or things that have worked well for them that involve with marketing, direcr mailing, or anything up the point of getting under contract. I hope this is not to much but if you took the time to read it I thank you.

[Ray Lai]

@Matthew Izarek

Thanks for your service. Driving for dollars is a great way to start, here is the bible for you to create your first list:

https://www.biggerpockets.com/renewsblog/2013/05/0...

Here is a gameplan if you want to use direct mail to find deals:

1) Attend your local REIAs and network, you need to build a buyer list of investors that will buy your properties and network with other people in our industry. Do not spend too much time on this but at least know a few guys at your local REIA that are actively flipping that you can sell to when you get your first assignment.
2) Next develop your strategy, build a list of at least 200 properties to mail to. Response rates are typically 0.5-2% so the bigger the list the better. Options include driving for dollars, absentee, probate, using listsource if you are not in a competitive market, buying lists that are exclusive for your market type (we partnered with a guy that does this)
3) Practice negotiating by calling ads on Craigslist (for sale by owner) for properties. Learn to listen for DMF (distress, motivation, flexibility). End of the day you need to figure out whether they are truly motivated to sell, and help them solve their problems.
4) Start a sustained direct mail campaign. First batch with postcards using first-class, then follow-up with yellow-letters using standard mail. There is no point in starting if you cannot sustain because statistical data shows that responses typically occur after at least 3+ mailings. You want to use postcards first since they are cheaper and some may bounce so you can remove the bad ones off your list and skip-trace those so you do not waste money mailing to bad addresses. If you wanted to, you can even skiptrace the bad addresses to find where the owner moved and target the right address.
5) Always mail first class postcard for the first part of your campaign. Feel free to ask why J

For fulfillment you can do it yourself to save money if you are broke, but ultimately if you want better response rates and focusing your time on value-add, then you will want to outsource fulfillment to a shop that has economies of scale and can offer you great rates.
Remember, a campaign usually does not get a response until 3+ mailings. A lot of newbies quit after 1 or 2 letters without realizing that people do not open the first letter they see. Focus and sustainment is the key. I would recommend a different marketing piece every 4 weeks for 5-7 months from past data analysis, but you should test this out for your market and see what works best response rate wise

Also, when you become more advanced you will want to do split testing and other methods. You should always be tracking your response rates and seeing what lists work bests. It is always best to include a website and a local phone number on the postcards as well to maximize your responses.

Another protip: If you are in a competitive market, deals are harder to find however if you do find a deal, someone will be much more likely to split the profits and show you the ropes if you make a friend in the industry. It is better for them to get half the profits than no profits, and you gain invaluable experience as they take you through the process with them.

DO NOT go half-cocked and mail without having an understanding of the legal requirements for your area for assignment contracts. That is how you get in big trouble.

Another recommendation: If you want to make even better money, invest in yourself and become a licensed real estate agent. That way you can buy houses from distressed homeowners (wholesaling) and sell the homes in good condition for a nice commission. You also learn a lot like how to run comps and get direct MLS access which is nice.