Is my city/county big enough?

Question

The city of Greenville, SC has a population of about 58k and the county has a population of 450k. I own a business that sells B2B and there is barely enough business in my area code to grow at a decent pace.

I want to do some wholesaling but I want to know what the possibilities are for a city my size. If I do some aggressive marketing, and lets say its effective, what are the possibilities in a market my size?

Account Closed · Answer

Philip:  Don't let the size of your community or comments here deter you from experimenting with direct marketing in your area. Not every investor has to walk and talk.  I worked a town with 10k people for years, and still occasionally do a deal there.  I'm from out of town and I'm not one of the local players that everyone knows by name or by picture.  Every seller needs something different.  Some people sold to me because they didn't want to work with the other guys.  Some people sold to me because I was a woman.  Some people sold to me because I have a different style (low to no sell and I make it easy).  Many of the sellers I work with are out of state and they aren't part of the community, so getting a letter is just what they needed.   I envy the skills and systems you have in place, as I'm not good with systems or managing lots of data (working on that).  With the right message, I think you could do very well in your area and maybe appeal to sellers that no one else is reaching.

Account Closed · Answer

If your 9-5 prevents you from doing some things in your business (driving buyers around, etc.) just work on automatingn some aspects that you don't need to personally do yourself.

For example, you don't need to drive buyers around. You can tell them where the property is located and they can see it on their own.

Also, you don't need $1,000 in marketing costs for each deal. There are plenty of free and cheap ways to find leads (Craigslist, other ad sites, passing out business cards, bandit signs, etc.) If you have the money, then paid marketing is usually workth it and more effective. But if you don't there are plenty of much much cheaper avenues.

Brian P. · Answer

Well Marie is right you don't need a major city but you may need to add some activity to your wholesaling to make the kind of income you seem to want, and if your hours in your business do not allow you to do everything, you will need to expand your hours, so it is a eat your cake and have it too situation, you can't do it unless your B2B is flexible.

My younger brother moved to a small town of 25K years ago and when his job finally went away he called his older brothers who had been investing for years. I moved there for a year to teach him the real estate business and so my wife and I could enjoy the area.

But to make the  income he wanted you just could not wholesale only, it required some additional activities, mainly rehabbing plus a few I will not cover here. Now he is the top investor dog in town but to be effective in building his business 9 to 5 M-F was out of the question unless he was willing to forgo some business.

Your area is bigger and should allow it but I would survey the competition factor before I made any projections. The area I restrict myself to now is about 100k population within a bigger setting. I totally limit my hours but nights and weekends still do come into play every so often.

Philip Klinck · Answer

Thanks for the comment Marie. I think what I will do is go into it with wholesaling on the brain but be flexible enough to be able to fix and hold if I have to. I would hate to get 2-3 under contract and then have no-one want them because there is not enough meat on the bone. The issue is that I can hold them if they are cheap but 100k houses are not going to work.

Clay Huber · Answer

Basic forces of the economic market should "equalize" the proportions. Meaning, in a smaller market, sure it may be "small", but it is also going to have less investors (aka competition); whereas in the bigger markets, sure there are more houses, but you can bet your bottom dollar that there are also more investors who want those houses along with you.

I have no idea what it is (and I'm guessing the statistic isn't even tracked, let alone how it could be), but it'd be interesting to know what the "investor per home" ratio is in different markets. I'd guess it is pretty similar, if not bigger, in the smaller sized areas.

Account Closed · Answer

Kama Ward great point! If you post the potential deal to BP, people will give you great feedback on if it is or is not a "deal." Don't be afraid to ask questions here!

Bill Gulley · Answer

Then yoru're not really new, but renewed.....try the letters, as I said it works for some. Then you know RE is not an armchair desk job....go get'em, the town is plenty big.....good luck

Philip Klinck · Answer

I may just need to get my weight up and go for a rehab flip or rehab hold. I'm use to residual income anyway. My goal was to increase my transactional income as my current business doesn't allow for that.

Kama Ward · Answer

If you get listings, get sellers to price them right, and always refer buyers to an agent friend or two (who will love you and scout deals for you- especially if they are exclusive buyer's agents)- you might be able to forget all the run around.

Having your license might be a drawback in the wholesale game, depending on disclosure in SC. You must disclose in NC, and sellers get their guard up.

If you do decide to try it, give it 12-18 months to get the processes smoothed out and your reputation up. If you are high profile enough, everyone who is in trouble will know to go to "that house buying guy".  You can get someone to screen the houses/sellers, but you are still going to have to go out on the odd Saturday night because "My ex is getting out of jail tomorrow and I need to sell this house now so he can't find me."

I'm really not sure about 2-4 deals a month. Our number of mls home sales in my county last quarter averaged 44 per wk (not incl land, commercial) + guessing 5-10 non mls per wk.  Guesstimate: less than 10% were investment- so let's say 4-5 investments sold per wk. If you want 1 per week,  you would have to capture 20- 25% of all investments sold. Sounds tough.

Break it down for your market.  If you are spoiled with your other business, it might not be worth it.  Wholesaling is for the young scrappy hungry people.

Philip Klinck · Answer

I have had my RE license for a long time. I sold for a builder a long time ago and have been interested in RE for even longer. But, now I am use to my 9-5 mon-fri that my B2B business has spoiled me. I cant run buyers around in my car all weekend. I suppose I could start building my listings but even that is quite a bit of weekend work. When you have an interest in the property you have some control. And when you have a GREAT deal you have even more control.

I am sure I can make something happen. I just want to make sure there is enough out there for me to do maybe 2-4 deals a month at $4k per deal. I am assuming it will take $1000 in marketing to find each deal. So netting 6-12k a month would be fine with me. But, doing a deal every 2-3 months is just not good enough.