I'm Losing Faith In Wholesaling

[Anthony Watkins]

I'm in about 5 different investment groups on Facebook and they all complain about wholesaler calls, wholesaler text, wholesaling postcards, etc. As someone who aspires to be a Buy and Hold Investor, I try to put myself in the other person's shoes when making these phone calls asking someone to sell their home for 40% below market value....and I can't picture a world where an investor would be excited to take that deal.

Seriosuly wholesalers, how many calls are you making a day, how many postcards are you sending out, how much money are you spending on ads and gas to Drive For Dollars? Are you texting? Is wholesaling worth it in a hot market? I can see how this was a lucrative business model in 2006-2012. But now...how do you stand out? 

I'm 4 weeks in and 0-25 but I've reached out about 200 times using different forms of communication. 

[Eric James]

The reality is that much of wholesaling is predatory. If you're looking for off market deals for yourself it needn't be so much. There is legitimate profit to be made from taking on significant value add projects. But most of wholesaling is looking for suckers who don't know what their property is worth.

[Randall E Collins]

In more simple words. Wholesale price vs. Retail price. Who makes the most money in the sales department? And who's being ripped off, the sales person or the buyer? You think you're getting deal at Wal Mart? Find out how much they paid for the item and you'll have a different opinion. Of course Wal Mart has no full disclosure notice, so we'll never know.

Understood that the wholesale real estate market and the realtor's market if different from the average retail market. However the principle is the same. The retailer is the only one who's wealthy, certainly not the buyer or the wholesale company.

Understood also, there are not many single mothers with children buying homes. Question is why, answer is because it's too darn expensive. If one were to be lucky enough to come up with a down payment and obtain a mortgage/loan. The payments would be so high they wouldn't be able to buy anything else. Hence, foreclosed homes. And more homeless women and children. Alternatively if she could purchase a home at a more reasonable price, from say a wholesaler. She'd likely be able to keep up payments from her job at Wal Mart.

Only for those who say wholesaling is illegal, in Texas at least. Maybe you should read Texas Occupation Code 1101.0045 Equitable Interests in Real Property.

[Randall E Collins]

As I said Jay, maybe you should read it for yourself. As for the rest, forgive me. I sort of strayed from the subject of wholesaling to the subject of today's economy. Fact of the matter is real estate and even rent is why too high and overly priced.  The rich getting richer and the poor getting poorer. There are too many greedy, money hungry people that don't care about others who are struggling to survive and I'm tired of it. I'll say no more.

[Eric Janson]

Back in 2011, it took me 1 year to do my first wholesale deal.  There was a lot of trial and error.  Finding deals is always tough, but they are out there.  You have to find right situations where it is a win win for everyone involved.  

[Joe Gonzalez]

What's going on Anthony,

This is quite the thread with many different responses. I'm a full time wholesaler and here are my 2 cents.

I am currently spending about $20,000 a month in marketing - spending this amount of money positions me to run a more predictable business (although nothing is guaranteed in any business.) 

Would I say that one needs this kind of budget in order to do their first deal? Absolutely not.

I didn't start off with these kinds of funds in the beginning, I am a first generation American with no college degree.

My first deal came from a a hand written letter, I had no marketing budget.
However it took me months of preparation and constant rejection, this business is FAR from easy. 

Although I didn't have the funds this is what I did have:

Ambition, time, a growth mentality, sales background, focus, aptitude for business, no other option but to succeed.

What I sacrificed:

Eliminated all distracting relationships, cut out music for a year and listened to podcasts, 12 working hour days, 1-2 books on real estate a month, reinvested profits into real estate seminars.

As far as your question regarding "what seller would sell at a discount?"- just remember that when you do wholesaling correctly you are a listener more than anything.

Lowballing is not the name of the game, it's all about listening.

If you ask the right questions a homeowner will tell you how much they NEED in order to ink a deal. 

No matter how much it confuses people, the reality is that there will ALWAYS be a market for convince. Every day thousands of cars are sold to car dealerships at a discount, is it because car owners didn't know they could sell it for more on Craigslist? It would be foolish to believe so, its all convenience.

Disregard all negative thoughts/ outside opinions  - focus on growing in this business and most importantly just know it's possible.

Best of luck.

[Jonathan Greene]

I didn't read this thread at all, but the headline is like saying I am losing faith in pyramid schemes. It's hard to lose faith in something that is inherently built on mistrust. The few the run real businesses as wholesalers know the rules in the state and know their numbers, but that's the 1%. The rest don't even deserve faith to be in the equation.

[Account Closed]

Don't lose faith, don't stop mining when you're only 3 feet away from gold!
I started mid-to-late last month and here it shows I make about 174 calls a day, I try to go from 3-7 but on friday and saturday 3-8

I don't do sms blasting... yet, and I don't do anything with mailers also yet. I have door hangers I got from ballpoint marketing that are actually pretty good conversion wise as they look pretty and hand-written, I just put them on properties that need a decent amount but not too much TLC. I set up a website and am working with a marketing agency that is working on my seo/sem while I'm running FB ads as well with $10/day set for 2 different ads.

I'll tell you this, I've been at it for about 1.5 months I think and I've gotten 1 deal under contract (working on getting it assigned now), and 2 leads that might turn into contracts and a few that I'm waiting to get back to.

Right now, I'm focusing on brand awareness via legally planted signs and my current main project is designing the most efficient system to follow-up with people on a quarterly basis for my small-scale business looking to get 2/3 deals a month.

But it seems like you're getting the wrong idea here, there is a reason that some wholesalers thrive and it's because they become essential. By that, I mean they become an outlet for the people who NEED to sell their home fast. People who NEED some sort of creative solution to their problem that might not be as simple as "selling it for 40%." From what I've learned, many more deals are to come the longer you're in on the game.

I know I probably seem like I'm talking a little ahead of myself, but it only makes sense that people who are active for longer durations with aggressive marketing will be able to perform better as wholesalers. Why do I think that? Well, if you're about to lose your home to a tax sale, are you going to think about the random "We Buy Houses" sign on the side of the road or the professional looking company/gentleman that has been consistently asking you if you want to sell your home? If they have seen your brand by other means, then that's another reason for them to think about you specifically.


I know this picture shows 0 leads but that's because of the way I have my tags set up after I get off of the phone with people.

I have spent ~$200 (Batchdialer + Propstream) + 8000 leads skip traced, so ~$960 (I need to upgrade to list automater from here on as it would actually save me money given the amount of leads that I skip trace.) I paid $850 for contracts + an attorney consultation (these guys are worth their weight in gold!), I spend $20 a day on FB ads so I've probably spent around $300, I spent $50 making my site with bluehost for the year, $750 working with the seo/sem team, and $650 on signs. All in all, I've spent around $3700 so far. However, this produced 1 deal so far and I think that it will be at least 150% of my total expenses so far, while majority of them have been large one-time expenses. My current monthly spending is ~$625/skip tracing (about to go down), $200 for batchdialer and propstream, and $300 for fb ads. Is it a lot? Yes, $13,500 a year, which is slightly more than ONE really good wholesale fee. Just keep putting in the work! 

[Jerryll Noorden]

No offense to all above me, but you are doing it all very very wrong.

Let me paint a picture for you all.

All these leads are completely free. I don't do a thing to get them, and they are extremely motivated. My lead generation is on auto pilot. I get anywhere between 4 and 12 leads every single day. I can count and rely on these leads. I know right now with 100% certainty that my next Monday I have an other 23 leads in my inbox.

What this means is simply this.

You were concerned about the cash offers.

Earlier this year we bought a house for 10 dollars. We litterally bought a house for a gallon of milk.

ARV= $250K

It is the green house. No liens no auction, simply a motivated seller.

We also bought a house for $11K while ARV =$183K

(their neighbor offered them $40K and they had to bring $70K to the table. They picked us.

We also bought a house for $70K, ARV = $450K.

We get these deals ALL-THE-TIME.

Why?

Because motivated sellers find us, we don't look for them. They already decided to sell to us vefore I even know they exist.

Therefore our deals are insane. and our profits... well...

You can either be offended when I tell you, you are doing it wrong, or you can swallow your pride and start doing it differently.

I have been on BP for years and years and what really boggles me is this. I show proof, screenshots, graphs, evidence all-the-time, yet people blatantly ignore evidence, skip right over it and follow the advise of the other struggling investors when they themselves are not successful. most people here are STUPID dumb and ignorant and it simply is insane crazy to me.

Stop it with the driving for dollars, DMM, cold calling and any and all marketing venues that has less than 1% success rate. Any mentor or guru that tells you to send out 10K mailers, f%&ing walk away. You will for ever be struggling.

Think on your own, open your eyes and SEE (gadamnit) that a 3% success rate is obviously not good enough.

I never said you can't make money with DMM and the like, but there are way more efficient automated and scalable ways to not have to rely on 3% luck rate to make it.

Get a website. Make it credible, work on SEO, while you work on SEO, start PPC and or facebook ads (AFTER your site is credible) Make money now using a logical system and not gambling.

Do it this way, don't want to hear but but but, do it, as this is a logical and strategic way to get deals right now. Skip over this message, and you deserve to fail!

I am blunt? Yes extremely. Those that can handle it WILL succeed. Those that are offended, this space is just not for you!

[Jake Soper]

People should start taking some of their wholesale profits and focus them into rentals or sfh, not just more wholesaler marketing. Then you'll have some cash flow and something to stand on if the wholesaling well dries up.

[Don Konipol]

@Jerryll Noorden

If I were going into wholesaling, I would definitely follow your advice! Maybe the majority of wanna be wholesales are “scared of success”, so they continue to do what doesn’t work. Letters, post cards, driving for dollars, direct mail, had its heyday 20 years ago. Like tv ads, it could still work with a huge budget and limited expectations. Keep up the good work.

[Jerryll Noorden]

Originally posted by @Don Konipol:

@Jerryll Noorden

If I were going into wholesaling, I would definitely follow your advice! Maybe the majority of wanna be wholesales are “scared of success”, so they continue to do what doesn’t work. Letters, post cards, driving for dollars, direct mail, had its heyday 20 years ago. Like tv ads, it could still work with a huge budget and limited expectations. Keep up the good work.

 Thank you my friend. And yes, I really don't get it. it doesn't matter how much proof you show them, somewhere in their mind they are dead set on DMM, cold calling etc. etc, and then they ask "how to do it" not for the intention of finding out how to do it, but just to hear others say "yeah go do DMM" so they feel better doing what they want to do ).. (not directed at the OP).

But this is exactly what I think is happening.

It is like asking "Am I pretty?" but then get pissed when someone says "no, you are not!" 

Then why are you asking?! When are you asking when you will only accept one answer?

[Jerryll Noorden]

Originally posted by @Jake Soper:

People should start taking some of their wholesale profits and focus them into rentals or sfh, not just more wholesaler marketing. Then you'll have some cash flow and something to stand on if the wholesaling well dries up.

 Jake, your message of cash flow is not wrong, but consider this though as this is an other big mistake people make.

People think that rentals and only rentals is passive cashflow.

That is wrong. VERY wrong.

I am now working (very) hard to automate my flipping business. What do you consider passive income? Or cash flow?

You not having to do anything and get cash flow right?

If I convert every single action I need to take to flip a house and convert that into a step by step system, I can hire people to do that work for me. I hire an acquisition manager, a setter, customer support etc. etc, and the last person I hire is a CEO.

Then I step out, travel the world and am free, while the people that focus on rentals make what... $300/month per door? Well, I make 50K/FLIP! And if I average about 6 flips/month well that is $300,000.00/month.

$300K/month PASSIVE income.

I am not going to start that debate again flipping vs. rentals. That is NOT what I am saying.

All I am saying... passive income doesn't mean HAVING to get rentals. You can absolutely do passive income through flipping (and/or wholesaling) as long as you know how to scale and automate.

And if you think about it...

I had a ton of friends when I just started that were hell bent on rentals.. now 4 years later, they have 6 houses and no liquid money. Me? I have enough money coming in to by 2 houses every month in cash with my own money!

People HAVE to start being smarter when it comes to this business. There are just SO many sheep out there that follow the ancient old rules without question! That is friggin rediculous to me. People look at my success and they are impressed. I always tell them, don't be impressed, be ashamed! I did nothing special other than be smart and have a brain.

If you want to make it in this business stop listening to advice from people that they themselves have not made it yet through a reliable system (not luck).

just my 2 cents

[Jake Soper]

Originally posted by @Jerryll Noorden:

Originally posted by @Jake Soper:

People should start taking some of their wholesale profits and focus them into rentals or sfh, not just more wholesaler marketing. Then you'll have some cash flow and something to stand on if the wholesaling well dries up.

 Jake, your message of cash flow is not wrong, but consider this though as this is an other big mistake people make.

People think that rentals and only rentals is passive cashflow.

That is wrong. VERY wrong.

I am now working (very) hard to automate my flipping business. What do you consider passive income? Or cash flow?

You not having to do anything and get cash flow right?

If I convert every single action I need to take to flip a house and convert that into a step by step system, I can hire people to do that work for me. I hire an acquisition manager, a setter, customer support etc. etc, and the last person I hire is a CEO.

Then I step out, travel the world and am free, while the people that focus on rentals make what... $300/month per door? Well, I make 50K/FLIP! And if I average about 6 flips/month well that is $300,000.00/month.

$300K/month PASSIVE income.

I am not going to start that debate again flipping vs. rentals. That is NOT what I am saying.

All I am saying... passive income doesn't mean HAVING to get rentals. You can absolutely do passive income through flipping (and/or wholesaling) as long as you know how to scale and automate.

And if you think about it...

I had a ton of friends when I just started that were hell bent on rentals.. now 4 years later, they have 6 houses and no liquid money. Me? I have enough money coming in to by 2 houses every month in cash with my own money!

People HAVE to start being smarter when it comes to this business. There are just SO many sheep out there that follow the ancient old rules without question! That is friggin rediculous to me. People look at my success and they are impressed. I always tell them, don't be impressed, be ashamed! I did nothing special other than be smart and have a brain.

If you want to make it in this business stop listening to advice from people that they themselves have not made it yet through a reliable system (not luck).

just my 2 cents

I'm not talking about passive income here, but more of a change in strategy. True passive in REI is rare as we both know.

My suggestion was more for the folks in the last couple years who made their names as wholesalers and never expanded to other investing strategies. Both rentals and wholesaling require hard work, but only one of them leaves you owning an appreciating asset, and the potential for extra cashflow.

With Fix and flip, of course you're going to have more cash on hand than a rental investor. Before and after a job. Not arguing that at all. 

[Daniel Smyth]

@Anthony Watkins

I never care about people on the net or fb groups when they complain.

Most want it as east as it seems in the free seminars, and get all frumpy when they have to actually work for that 10k finders fee.

Wholesaling is great. How else would you learn?

In Wholesaling you do all of the work you would to buy and flip, without doing the work!

Thing is, the tools are only as good as your ability to plug in the correct numbers.

Then you need someone to believe your numbers and pay you for your time.

When you can wholesale and make money at it, you can be the king of your world as you would like it to be.

[Jerryll Noorden]

Originally posted by @Jake Soper:

Originally posted by @Jerryll Noorden:

Originally posted by @Jake Soper:

People should start taking some of their wholesale profits and focus them into rentals or sfh, not just more wholesaler marketing. Then you'll have some cash flow and something to stand on if the wholesaling well dries up.

 Jake, your message of cash flow is not wrong, but consider this though as this is an other big mistake people make.

People think that rentals and only rentals is passive cashflow.

That is wrong. VERY wrong.

I am now working (very) hard to automate my flipping business. What do you consider passive income? Or cash flow?

You not having to do anything and get cash flow right?

If I convert every single action I need to take to flip a house and convert that into a step by step system, I can hire people to do that work for me. I hire an acquisition manager, a setter, customer support etc. etc, and the last person I hire is a CEO.

Then I step out, travel the world and am free, while the people that focus on rentals make what... $300/month per door? Well, I make 50K/FLIP! And if I average about 6 flips/month well that is $300,000.00/month.

$300K/month PASSIVE income.

I am not going to start that debate again flipping vs. rentals. That is NOT what I am saying.

All I am saying... passive income doesn't mean HAVING to get rentals. You can absolutely do passive income through flipping (and/or wholesaling) as long as you know how to scale and automate.

And if you think about it...

I had a ton of friends when I just started that were hell bent on rentals.. now 4 years later, they have 6 houses and no liquid money. Me? I have enough money coming in to by 2 houses every month in cash with my own money!

People HAVE to start being smarter when it comes to this business. There are just SO many sheep out there that follow the ancient old rules without question! That is friggin rediculous to me. People look at my success and they are impressed. I always tell them, don't be impressed, be ashamed! I did nothing special other than be smart and have a brain.

If you want to make it in this business stop listening to advice from people that they themselves have not made it yet through a reliable system (not luck).

just my 2 cents

I'm not talking about passive income here, but more of a change in strategy. True passive in REI is rare as we both know.

My suggestion was more for the folks in the last couple years who made their names as wholesalers and never expanded to other investing strategies. Both rentals and wholesaling require hard work, but only one of them leaves you owning an appreciating asset, and the potential for extra cashflow.

With Fix and flip, of course you're going to have more cash on hand than a rental investor. Before and after a job. Not arguing that at all. 

 understood

[Neil Rose]

Wholesaling can be very tough. It really comes down to connections and the right system. That usually includes a huge budget as well.

[Jay Hinrichs]

Originally posted by @Jake Soper:

Originally posted by @Jerryll Noorden:

Originally posted by @Jake Soper:

People should start taking some of their wholesale profits and focus them into rentals or sfh, not just more wholesaler marketing. Then you'll have some cash flow and something to stand on if the wholesaling well dries up.

 Jake, your message of cash flow is not wrong, but consider this though as this is an other big mistake people make.

People think that rentals and only rentals is passive cashflow.

That is wrong. VERY wrong.

I am now working (very) hard to automate my flipping business. What do you consider passive income? Or cash flow?

You not having to do anything and get cash flow right?

If I convert every single action I need to take to flip a house and convert that into a step by step system, I can hire people to do that work for me. I hire an acquisition manager, a setter, customer support etc. etc, and the last person I hire is a CEO.

Then I step out, travel the world and am free, while the people that focus on rentals make what... $300/month per door? Well, I make 50K/FLIP! And if I average about 6 flips/month well that is $300,000.00/month.

$300K/month PASSIVE income.

I am not going to start that debate again flipping vs. rentals. That is NOT what I am saying.

All I am saying... passive income doesn't mean HAVING to get rentals. You can absolutely do passive income through flipping (and/or wholesaling) as long as you know how to scale and automate.

And if you think about it...

I had a ton of friends when I just started that were hell bent on rentals.. now 4 years later, they have 6 houses and no liquid money. Me? I have enough money coming in to by 2 houses every month in cash with my own money!

People HAVE to start being smarter when it comes to this business. There are just SO many sheep out there that follow the ancient old rules without question! That is friggin rediculous to me. People look at my success and they are impressed. I always tell them, don't be impressed, be ashamed! I did nothing special other than be smart and have a brain.

If you want to make it in this business stop listening to advice from people that they themselves have not made it yet through a reliable system (not luck).

just my 2 cents

I'm not talking about passive income here, but more of a change in strategy. True passive in REI is rare as we both know.

My suggestion was more for the folks in the last couple years who made their names as wholesalers and never expanded to other investing strategies. Both rentals and wholesaling require hard work, but only one of them leaves you owning an appreciating asset, and the potential for extra cashflow.

With Fix and flip, of course you're going to have more cash on hand than a rental investor. Before and after a job. Not arguing that at all.

One other point that is missed in wholesaling.. compared to building your real estate business as a licensed agent.. wholesalers are only as good as the next deal  its like drugs  they have to have the next fix.. If you put this same effort and money into building your real estate business you WOULD have residual income without further advertising or very little advertising. B/C your going to have all sorts of repeat clients and referrals.. how many owners that are dumping properties refer their friends and relatives  could happen but not much I suspect.. A top producing agent then can build a team if they wish with the help of the brokerage now your leveraging new agents time and efforts for your income .. and you only pay them when they perform..  Agents can use all the same techniques wholesalers use to build a monster brand that they will then do for a lifetime.  Be it direct mail type stuff   SEO like Jerryl sells or whatever..  But i can tell you watching my wife who has almost 30 years at this not a week goes by without an old client wanting to buy something or list what Lori sold them or whatever.. She has not spent ONE DIME in marketing money since we were doing fly Buy programs in CA selling out new home subdivisions on Oregon and Washington..  Granted to be a successful agent is not easy it takes time it takes money and it takes some years but once your there its pretty cool.  And the guys that specialize in commercial shoot they get rich !!! 

So just food for thought for all those who think wholesaling is the only way to make money starting out.. nothing could be harder than whoelsaling 

[Brian M.]

@Anthony Watkins @Anthony Watkins we spend about $25k month on marketing. This doesn’t include wages, data or bonuses. We make several thousand attempts at contacts per day plus run ads.

It IS a numbers game, a skill game, AND a time and circumstances game/ business.

Stand out with credibility markers, professionalism and really knowing your numbers and who you’re talking to. If you’re calling seasoned investors, the conversation if different than if you’re calling a novice or non- professional landlord. Focus on solving a problem, not a property. And understand 90+% of the time there will be a NO or there is no deal to be had. It’s a simple business that requires consistency and trial and error because each market has its own personality.

[Terrell Garren]

ARRGGH!!!! Enough Already.

Wholesalers call me, robo call me, pay an Asian lady to call me, text me, email me and send me snail mail. And now this (below).  About now, I would trade my Covid vaccination for a wholesaler vaccination. I'm afraid to go to bed as there may be a wholesaler under the sheets.

[Randall E Collins]

All the haters on BP. How absurd and bias. By the way Terrell Garren, I have some nice Ocean Front property for sale in Arizona, half price. Are you interested? What's wrong with a wholesaler being found under your sheets? Specially if she's attractive. Good Day!!!

[Nick C.]

@Terrell Garren if you come up with a wholesaler vaccination you will make more money than Pfizer. 

[Avihay Ohana]

@Anthony Watkins

I have tried to get off market deal for 6 month. Using cold caller from the Philippines.

It is hard.

It wasn’t until a month ago that we found a list that WORKS. And currently with 4 deals under contract + one that we bought. So 5 total.

We got into unbelievable deal last month on a fully renovated property. The owner literally told us that a broker was suggesting he can sell for $275K but he “understand we need to make money”. After negotiations we agreed on $230K and we now under contract with buyer at $307K.

Don’t give up.

Three things I learned during this short period:

1. Find a way to test cheap. I wasted $12,000 and 3 month on the same lists- I now test 1500 records in less than 5 days before I decide if the list is good or not. SUPER IMPORTANT to spend you $$$ on marketing that works so keep testing small before spending more.

2.If you read an article about it or saw a YouTube video about it it’s probably doesn’t work anymore.

3. Watch who you are against up and don’t be afraid to go an hour away from where you live where there is less competition. It is very hard to win a war against a tank when you only use M-16.