Wholesaling vs. other ways in

[Garrett Reed]

Hey Folks,

I’m extremely eager to get into investing but lack the capital. I’ve been fantastic in the past at developing quick relationships and I thought this skill would fit wholesaling. Would you suggest another way?

[Don Konipol]

@Garrett Reed

Wholesaling is NOT investing. It is a form of brokering, which itself can be classified as a job, or at best a business. The vast majority of would be wholesalers do not complete even one deal. The few that do usually find it pays about minimum wage.

Those successfully running a wholesale business fall into two categories. Category one is the people who wholesale as a buy product of their main business; which is rehabbing housing. They naturally find more deals than they want to handle so wholesaling those they don’t want to tackle is a profitable side business. The second category are those that regard wholesaling as a serious, full time pursuit; and not something to be done on a free weekend afternoon. These people have systems in place, time and money invested, and spend $10,000 and more monthly on marketing, advertising and promotion. They’ve also put in the time and expense to become fully educated, and have talent in certain important aspects of the business.

So, what is the best way to get started as a real estate investor? Well, while no money deals are possible, to successfully pull the, off requires superior real estate knowledge, sUperior negotiating ability, tremendous persistence, and some luck. Most deals entered into with no or little buyer capital are alligators, i.e., they have negative cash flow. Most probably end up as very unsatisfactory investments.

Here are the steps toward becoming a real estate investor

1. Acquire knowledge about real estate in general, and real estate law in particular. A good real estate principles text book, or most state sales persons or broker licensing courses is a great place to start. Some people obtain college degrees, or certificates in real estate.

2. Get a job in the real estate field. Best, and hardest to obtain, is a job working for a REIT, developer, real estate equity fund, or the real estate department of a major corporation. Easier to get are jobs with real estate brokerage companies, mortgage brokers, or property management firms.

3. Develop great credit score. While loans are available to even the lowest scores, they pay three times as much as excellent credit.

4. Save capital! If you can’t save some capital, you’re at a severe disadvantage.