What's the real deal?

Question

I've been reading old BP posts and other articles all over the place, and I just want somebody to tell it to me straight: what's the real deal with wholesaling? I know it's more of a business than an "investment", but some of the success stories just seem fishy to me.

I've heard of people saying they're doing two, three, four, or more deals per month! Is that a load of baloney? I must admit, I did think it was going to be easy......but now that I learn more and more, I'm getting a whole new respect for this wholesaling thing.

I'm still up for it and, in fact, I'm already working on putting together everything I'll need (marketing lists, driving, mailings, ads, getting an agent and an attorney for questions and advice, et cetera). I definitely WANT to put in the work and WILL put in the work.

But the thing is, I'm hearing about people that might wait MONTHS or over a YEAR before getting a deal, and they'll wait that same time until their next deal.

So what's the real deal? How many deals are you really finding? I want to work hard but I don't want it to be for nothing. With as hard as it is increasingly seeming, I think I'll be lucky to just find a deal, period.

Jon Holdman · Answer

Let me start by saying I'm not a wholesaler.  And, at the moment, I'm not even trying to buy.  But I have been buying in the recent past, and have given my information to numerous wholesalers.  So, here's my perspective from seeing what I've been sent.

Also, I've done no formal tracking, so take the numbers with a grain of salt.

Well over 50% of "wholesalers" NEVER send me even one deal.

A few do actually send a deal or two.  Most are bad, some are truly awful.  One offered a deal at 90% of ARV and to read their e-mail, it was the deal of the century.

I get deals frequently from four guys.  One is the local Homevestors franchise.  Another is Bill Bronchick, who runs CAREI and will send out deals on behalf of members.  The other two are local guys.  One sends a weekly newsletter, and usually has two or three deals.  Sometimes the same deal appears two weeks in a row, usually not.  So, I'd guess he does 4-6 deals a month.  The other guy sends e-mails as he gets deals, usually two or so a week.

IMHO, wholesaling is, in essence, being a real estate agent.  You're finding buyers and sellers and putting them together.  Yeah, yeah, I know all the stuff about assignments, double closings and flash cash.  All that's to avoid ACTUALLY brokering and the associated licensing requirements.  More specifically, as a wholesaler, you're a listing oriented agent.  So, you spend a lot of time and effort to generate listings (i.e., deals.)  If you work at it, you can find the deals.  But, its going to be serious work.  You're going to have to market continously.  Pick your niche.  Do direct mail.  Put up a web site.  Return phone calls.  LEARN THE VALUES.  Have a real buyer's list.  Live up to your promises.

I think the people who hype wholesaling as a quick and easy way to generate some cash do a disservice.  This is real work.  The people I mentioned above who seem to really turn deals around really work at it.  As far as I can tell, they're all full time.  Just like, again as far as I can tell, the agents who's signs you see all over my neighborhood.

Ryan Webber · Answer

Cherry, are you prepping to do a guru pitch or something?  Your posts are off and you smell fishy to me.

TX_Eagle, its a business and its work.  I've been wholesaling for a living for about 6 years now.  I find multiple deals a month (except during the winter months), and have consistently for the last 6 years. Yes, you can find deals every month.  It does depend on the size of your market, and the strength of your competition, and most importantly, your personal drive.

I live in a town with about 200,000 people, and my first year in wholesaling I wholesaled 37 houses.  My second year I did 82.  I consistently do somewhere between 30-60 houses a year depending on how hard I want to work.

Yes, its the REAL deal, but it does take REAL work.  Waiting months or years for a deal is really the wholesalers own fault (remember most importantly its about your personal drive).

Yes, as Jon shared, most wholesalers are worthless and don't last in the business very long.  That's not because of the opportunity but because of the individual.

John Chan · Answer

To get more leads, I find bandit signs to be very effective. I get most of my leads from bandit signs, both on the buy side and the sell side. I also run Google ads and get a few leads from people who want to sell me houses around my area.

Micahel Lorent · Answer

Jon,

If I may ask, what are those local investors in your area doing that generates them all of those deals per month? I mean, I get the marketing thing, but just how extensively do they do it?

I didn't expect autopilot anyway. I want to take it step by step, and focus on just generating one deal, and then the other, and then the other.

Account Closed · Answer

Jon

You hit the nail right on the head but I would have to disagree about double closing a deal, especially when you have your own inventory and you find some other great deals that you just can't pass up.

What I mean is I have my own portfolio of properties but I got some inventory from a hedge fund company and they allowed me to cherry pick from there list and I had a client looking for some of the properties in there that I did not have in my own portfolio.

Long story short I double closed on the properties only did $1,000 per asset plus closing costs and they were happy and so was I after that I started doing more double closings and now 27 months later I have been apart of 2,050 transactions.

Most the properties I got I would buy and resell quickly for a profit to companies that wanted to buy those cheap and resell after they rehabbed them and put property management on the with a tenant for another investor.

Jon Holdman · Answer

Honestly, I don't know everything they do.  But here are some of the things I've seen.

There are two agents in my area who generate a lot of listings.  One sends out a quarterly flyer that lists sales over the last quarter and some of the statistics.  The other periodically sends out a note pad with their name, picture and phone numbers.

Bill Bronchick, like I mentioned, runs CAREI, which is our biggest local REIA.  At the meetings, members can stand up and present deals.  The meetings have become too pitchy for my taste and I've not been in a while, but there were typically 6-8 deals at the big meetings and 3-4 at the smaller meeting.  I assume members can send him their deals and he will mail them out.  Or, since he does mentoring, perhaps its his students.  I don't really know.

The homevestors guys have web sites, bill boards, and send letters.  I've received some of their letters for my rental properties.

The guy with the weekly newsletter tends to move a lot of HUD properties.  I think he's just very persistent and makes a lot of lower offers and offers what he gets to his list.

Don't know what the other guys do.

I really think this is a long term game.  You get your name out.  You want to be in peoples heads so if the urge to sell strikes they think of you.  You send a lot of letters.  You build a web site.  You do SEO for your key words.   When you get a deal you close it.

What's the real deal?

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