First Attempt At Wholesaling

[Darren Harper]

Hey fam. This is my first post. I’m a complete newb. I am interested in getting my first wholesaling deal. There is a depressed neighborhood in my back yard (Newark, NJ) that has tons of homes with potential but are dilapidated. I’m planning on driving for dollars on Saturday. If I reach a motivated seller, where do I find a motivated buyer?

[Erik W.]

@Darren Harper, hi and welcome to BP!

@Jerryll Noorden has given you some great advice.  Listen to him!  

The "problem" with wholesaling is credibility.  Since you are bringing no money or experience to the game, the only asset you have to trade on is rock solid, 100% your word.  If you fail to perform ANYTHING you say, you're name will be mud and you're done in that market.  Experienced investors will avoid you.  Sellers won't trust you.

You asked, "How do I convince Sellers to give up $5-15K in equity when wholesaling?"

My friend, you must do BETTER than $5-$15K.  Otherwise, there won't be enough "meat on the bone" for you to make money and for your Buyer to be interested.  If you can't get a spread of at least $20K, the deal probably isn't worth your time other than as an educational experience in the process.  

Why so much $$$?

Because I, as an experienced investor, can easily negotiate a 10-15% off market value on ANY property simply by tossing an offer at every property on the MLS that's been sitting for 60+ days, combine that with cash and a quick close, and 4 out of 5 Sellers will jump on it. I don't need a wholesaler to do that work for me.

BUT, if you can bring be a deal, gift-wrapped with a bow on top and for 20% or more below market, then I'll buy from you.

You might be asking yourself, "Wait....if I'm giving Erik 20% off market and I'm only buying for 10-15% off market, then how do I eat?"  Simple, you need to buy for 30 (thirty)% below market.

The art of wholesaling is finding people who want their house sold a month ago.  They are "don't wanters."  As in "I don't want this house and I am prepared to almost give it away."

My guess is you will talk to 50-200 potential Sellers for every ONE house you buy until you get really good at this.  Your competition is out there and has a high-traffic website and they spend $5,000 per month marketing and getting their signs up everywhere. When someone Googles "Sell my house in (city, state)" their name pops to the top of the list.  So unless you're ready to spend a ton of money right away for several months with almost zero return, you have one thing only that will help you succeed.

Grind.  That's it.  Grind.  Your competition will drive for dollar 1000 miles per month.  You will drive 2000 miles.

Your competition will mail out 500 letters this week.  You will mail 1000 letters this week.

Your competition will talk to 100 leads in the next 15 days.  You must generate and talk to 200 leads.

See how this works?

I'm not trying to discourage you.  I'm trying to give you a reality check.  There are so many gurus and bloggers who make wholesaling sound easy.  It is not easy.  You may work 3-6 months before seeing your first serious paycheck.  Think 50-60 hours per week, easily, scouting neighborhoods, looking at tax records, knocking on doors, etc.

If that's a game you want to play....if you're ready to hustle like no one else, then you will find the Sellers, and the Buyers like me will flock to you.  Give me 20% off, and I'll find you.  You won't need to find me.

I hope this helps.