Posted about 2 years ago

My First Foray Into Real Estate Investing (Wholesaling)

I used to think that the whole landscape of investing looked like a stair step progression. What I REALLY wanted to do was to be a large rental property landlord, but in order to do that I thought I needed to build up a lot of capital which means I needed to flip quite a few houses first. And in order to flip my first house, I needed to come up with the initial 10-20% down, closing costs and other fees which means I needed to close on quite a few wholesale deals first.

Looking from the first step above to the final step felt like a daunting journey. And with no time to waste I pulled out my notes on wholesaling and went online to find a company that would produce some bandit signs for me (Those ‘We-Buy-Houses, as-is and in any condition’ signs). Filled out the website and paid for them and waited eagerly for my first shipment of signs to arrive. At the same time this was happening, I also looked into driving-for-dollars and direct mailers as methods for creating a lead funnel.

I remember a time when I mapped my first route of all of the busiest intersections in South Tacoma by day and by night I would sneak out of my house at 2:00AM clutching a handful of signs, metal frames and a ladder and I would plant signs on the ground or staple them to the nearest telephone pole. I chose to do this so early in the morning because I was extremely shy and afraid of being seen doing the work in broad daylight. Eventually, I got everyone around me motivated enough to see this through and it truly became a family effort.

My mom helped write the template for the direct mailers and every week her and I would both spend hours shoving printed letters into envelopes and hand-writing addresses on the face of each letter.

My little brother and I would comb through a list of pre-foreclosure houses to drive-for-dollars on and we would split the route every couple days and compile notes when we both returned.

They were both great assets because I had a lot of time but not a lot of money and this seemed like the ideal way to break into the real estate scene.

Unfortunately, none of the methods I executed ever bore fruit and I quickly grew tired of the entire routine. The letters were costly to send in larger batches and tiring to write each week because mailers require at least 5-7 ‘touches’ before a seller would respond. And the driving-for-dollars campaign was pointless because we would compile a list of addresses on the route as we were going towards pre-foreclosure properties, but I didn’t have a plan for what to do with the information we gathered so I didn’t follow up with potential leads.

I decided that wholesaling wasn’t for me and nearly gave up until I heard about a group of people doing Lease Option, aka “Rent-to-Own”... (More on that another time)