Is Wholesaling Dead?

[Mysonne Johnson]

Second year in real estate. My first year I been reading, learning, and even paid for a course on wholesaling but a couple months into my second year I am having trouble getting contact with sellers I have softwares I use and pay for and other free sources to acquire lists of leads and do direct mail BUT seems to always be a dead end or the seller isn’t interested. I been thinking of switching my strategy to acquire rentals but it’s almost the same process but me having money down for a loan and refinancing the deal. Any advice from investors on how they got started...

[Francois G.]

Originally posted by @Mysonne Johnson:

Second year in real estate. My first year I been reading, learning, and even paid for a course on wholesaling but a couple months into my second year I am having trouble getting contact with sellers I have softwares I use and pay for and other free sources to acquire lists of leads and do direct mail BUT seems to always be a dead end or the seller isn’t interested. I been thinking of switching my strategy to acquire rentals but it’s almost the same process but me having money down for a loan and refinancing the deal. Any advice from investors on how they got started...

If you made a financial investment to take a wholesaling course then you should absolutely make an investment to get your real estate salesperson license. The trouble getting in contact with sellers you're having wouldn't be nearly as difficult if you had access to an MLS. You would see all the Expired listings in your region from today to however far back they go (probably would have the ex-listing agents contact info instead of the seller, but you have an address to doorknock*). Or go on Zillow and filter out FSBO's in your region. It seems to me that you're expecting the business to roll in because you paid for the course, software, etc., but there's more to it then that.

People choose to go the wholesaling route because there's no significant financial commitment but they're quickly disappointed when they get into the thick of things. In REI, especially rentals, profits margins are very thin to begin with. Now your goal is to get a contract signed significantly under market value, just so you can sell it to someone who's also looking for a "deal", while still trying to flip a profit. It's extremely difficult and in some parts of the country it's not even worth the time commitment.

Get your salesperson's license, pass the state exam, hang your license with a broker, then start bringing some real value to your clients by getting their house sold and/or bringing them buyers. You'll make more money, you can re-invest your commissions into your investing career, and it's an excellent way to learn the investing side of the business.

My goal isn't to scare you from wholesaling, if that's your cup of tea then go for it. But I feel like getting a salesperson license is more of what you're looking for rather than wholesaling. I see you're from NY (I'm NYC/LI) which is even more of a reason to get your salesperson's license. You live in a state that has one of the highest home values in the country, one closed deal can easily be a 5 figure income.

Work smarter, not harder.