All Forum Posts by: Aaron Lietz

1. Contact all the new agents that are just becoming licensed. You can add help educate them on the mortgage process, and it is the best time to get on their list. Possibly only a few will end up top producers but it could be a great way to build those relationships early on.

2. Be easily accessible and able to assist when other loan officers aren't. When agents that have go to loan officers are in a pinch, they will reach out to you because you are available.

3. Research some not so common loan types that your brokerage offers but don't get used very often. Maybe loans on mobile homes, bridge loans, new construction loans, whatever. This gives you a unique marketing position and can get you in front of many agents that want to learn a different product that may help. In many cases agents will call you about this product and it may not work but you can flip it into a traditional loan.

4. Be everywhere. This sounds silly but show up to open houses, Realtor events, chamber of commerce meetings, home shows, community events, community yard sales, whatever. The more you are out and about, the more you will get noticed and be given a chance.

Good Luck! Aaron

Wow! Aaron, thank you so much! You are awesome.

1 Vote

Phoenix, Arizona

I've recently made a big change in my career (and I believe it's for the positive). I left a large retail mortgage company and I am now with a broker here in Tempe. My question is for my realtor friends. What is the best way to begin networking with realtors to build a consistent stream of referrals? In other words, what kinds of things do you look for when looking for a great lender to send your clients to? What things are most important to you?

I once read a great book called The Go-Giver and I'm trying to brainstorm as to how I can best "lead with value" in this space.

This is a new journey for me, and any good advice would be awesome.

Thank you, friends!

0 Votes

Phoenix, Arizona

Originally posted by @JD Martin:

Quote from @Aaron Lietz:

Originally posted by @JD Martin:

Quote from @Joe Splitrock:

@Aaron Lietz I would argue in your example that a guru isn't a rock star. They are more like a music teacher who never became a rock star. Most wholesaling guru were moderately successful at best. They pivot to being a mentor, because it is more profitable (for them). A successful wholesaler is too busy doing deals to mentor people. This is the "guru fallacy" that dates back to television infomercials from people like Carlton Sheets. It is has not moved to social media and the internet.

I wouldn't even just pick on wholesalers. This low success ratio is true in much of real estate. Most "investors" never buy more than one property. Most realtors do very few deals. That is because there are skills that cannot be easily learned. Being a self starter and good at sales are not a textbook skill. Business has many functions, each with risk if you do them wrong. Legal, marketing, accounting, taxes, etc. are all part of business. Sometimes the person who is good at one thing, isn't good at the other things. You need to do it all, or be good at hiring things done.

@JD Martin is a rock star and investor, so curious to hear his thoughts on this.

LOL. I've had my 15 minutes of fame but mostly I'm a rock star in my own mind 🤣🤣

My thoughts on the analogy

1. I've been in a lot of music stores in my life and I've never heard or had that conversation. That would be a pretty weird conversation to have, because outside of some really young guys, most people who show up in music stores with no experience and no equipment are usually just looking to get started for fun as a hobby. Virtually no one past the age of 20 shows up at a music store to buy the lessons and equipment they think will make them the next John Mayer.

2. The low barrier to entry analogy: not even close. Anyone can buy a guitar and even start a band. Beyond that, you are talking about a lot of work and a level of commitment few people can maintain. Our self-produced album - meaning we had no record company to answer to, so total artistic freedom - took almost two years to complete. To even get to that point, the band had to be competent enough to play music that could be recorded, overdubbed, mixed and edited. I had to fire a musician halfway through the project. Getting multiple people to practice on a regular - and productive - basis is way, way harder than it sounds.

3. I agree that "not making it" can be separated from hard work, skill and effort. It depends on your definition of "making it", but I've known plenty of excellent musicians that were hard workers that just made a living, and some barely that. "Making it" in the music business depends on skill & talent for sure, but also a level of work and commitment that is more or less an obsession. You have to sacrifice *a lot* of your life to "make it" in the music business. Just maintaining enough work as a professional requires a ton of sacrifice. I can't count how many times I played gigs on a Thursday that were a 1-2 hour commute, you start at 10 PM, get done at 2-2:30, load up, commute home, in bed by 5 AM and get up for work at 6:30 in the morning. The guys (gender neutral) that "make it" do this for years.

4. Selling the "tools" for success - yes, to some extent a good analogy. Except the vast majority of people that start playing music have no delusions of grandeur. Virtually everyone who wants to start wholesaling has visions of drinking Appletinis on a beach all day and giving the big middle finger to the working world.

5. Getting lucky - no such thing in the music business. Yes, you have to be the right product at the right place at the right time with the right people, and that's a situation out of your hands, but you have to have every bit of the groundwork in place the moment that opportunity presents itself. Luck is where hard work & opportunity intersect. I think the same is mostly true with wholesaling.

6. Overhyping self-employment: I don't argue this point. I probably work more hours when I'm working for myself than working for someone else. Just not working for someone else can't be the only goal.

@JD Martin

Thank you for taking the time to reply. Very respectfully, nearly everything you mentioned above applies to wholesaling.

• Music salesman/teacher/guru - there are lots of music teachers (who also sell music gear and work on commission) that will tell you that if you "just work hard enough" you will be a success (just like wholesaler gurus selling mentors/programs and imply that it just has to work if you work hard enough). They may not tell me what kind of success I'm going to have, but they are still selling a dream that is not achievable for the overwhelming majority of people (even for those who don't give up and "grind really hard"), same with wholesaling.
• Low barrier to entry - Any beginner wholesaler (or musician) can easily get into the game with little to no money (or even tons of training). I can skip trace a list and start calling it (i.e. - buy a used guitar/computer, start a band, practice songs/covers, and start playing gigs), all while using YouTube University. In wholesaling, I can download an app and start knocking doors. I can drive for dollars (and on and on, just like getting into music). It would be hard to count how many pop/hip-hop/dubstep lovers started with a laptop, a mic, and a set of headphones.

• Hard work, skill, effort, and sacrifice - We agree! This is the same thing as wholesaling. In a similar fashion to the music business, I can work hard, have the skill, put in tons of effort, and sacrifice a ton, and yet my chances of replacing my good-paying corporate sales job (which pays 6 figures) are slim (and this is even if I put tons of money into advertising).

• Believing you can make it in the music business is part of the picture. Yes, not everyone who buys a guitar thinks they can possibly be a rockstar, but nearly everyone who is trying to make it big, believes they can (kind of like the lottery), when in fact they can't due to how unlikely it is. I think this makes wholesaling look even worse than the music business (yet still similar) - because at least playing music is fun whereas the process that most beginner wholesalers do (cold calling, door knocking, texting, D4D, mailers, bandit signs, etc), is not. The overall point of my post though is about likelihood. In other words, for me it seems like any given person is just as unlikely to be a big success in wholesaling as they are in the music business. But then again, maybe it has more to do with how I go about wholesaling?

• "Getting lucky - no such thing in the music business. Yes, you have to be the right product at the right place at the right time with the right people, and that's a situation out of your hands..."

Being in the right place at the right time...That is called luck my dude :). I go to a casino on Monday and roll the dice with no success. I go to that same casino 5 years later, roll the dice at the same table, and hit it big (i.e. - right place, right time - all with little to no effort or skill). The point is, I think, I have to work hard in the right area.

"...but you have to have every bit of the groundwork in place the moment that opportunity presents itself. Luck is where hard work & opportunity intersect. I think the same is mostly true with wholesaling."

There are more musicians who believed this than not, and yet the overwhelming majority of them did not make big success in the music business (like the gurus implied they would). In fact, the overwhelming number of musicians who get signed and tour don't wind up having big success. They wind up in debt, sell very few tickets/albums, and get shelved or dropped by the label. This is the same in wholesaling. Sure this person might do a few deals, but how much money did they have to sink just to get to those deals?

I guess we are going to have to mostly disagree here - your profile doesn't say anything about being a professional musician, so unless you tell me otherwise (and provide some street cred to back it up :) ) I'm going to have to just shoot down a lot of your points again - maybe more effectively this time:

1. The word "lots", "a bunch" and similar is just a way of making a point without any facts to back it up. I've never done a study on how many music salespeople are trying to sell a dream of success to would-be musicians, but I've known literally thousands of musicians in my life and hardly any of them had any delusions of "making it" in the music business. Most of them just wanted to be able to play some music and have a good time doing it, and that was their definition of success. The two fields you are trying to connect have virtually nothing in common. Music is an artistic pursuit that *some* people end up making money at, a very few make a lot and become famous, and most people just enjoy it for the sake of doing it without any expectation of remuneration whatsoever. I expect the vast majority of people who get into wholesaling do so with the hope/expectation of making a lot of money.

2. Low barrier to entry - you're still trying to conflate the ability to obtain tools with the effort involved in using those tools to accomplish anything. The only similarity of music to wholesaling here is what you do with those tools. Downloading an app is a low barrier to entry. Knocking on doors is not - that requires time, work, effort, and a pretty strong backbone. Buying a laptop, a mic and a set of headphones (not what I would consider a "musician" anyway, but I digress) is a low barrier to entry; spending many hours writing, mixing, getting gigs, performing, etc is not - that requires a lot of work.

3. Believing you can "make it" in music - you vastly overestimate the number of people who play music who you think is trying to "make it". As someone who's been a professional musician almost my entire life, and has played a lot of places and on bills with some fairly famous people (Darrell Scott, Carrie Rodriguez, Avett Brothers, etc), professional musicians can largely be sorted into 2 camps: those who enjoy playing music and aim to make a reasonable living doing it (think studio musicians, professional cover bands, etc) and those who have a manic dedication to their artistic vision and couldn't care less if they "make it" or not, and some of them happen to (think Bruce Springsteen or Darrell Scott). Virtually no one is "trying" to make it big - that's just popular culture talking.

4. Casino example is incorrect. If you're walking through the casino and you bump into Paul McCartney and he asks you to play on his next album, it's not luck or anything else if you don't know how to play an instrument and play it well.

5. Finally, and this is the old days as it doesn't really apply any more, but a decent number of acts that are signed by labels & tour did reasonably well because labels weren't in the business of spending money making albums and promoting artists they didn't believe would provide a return. Getting signed in the first place was the difficult part. Yes, many musicians didn't have staying power, but that's less a factor of their talent, work or anything else than an indictment of the process in the first place.

In any case, I go back to my original premise. Your post sounds good to a layperson that doesn't know anything about music or the music business, but you're comparing apples to oranges. Wholesaling is almost exclusively about making money. People want to wholesale because they believe it's a cheap & easy way to get into real estate to make a lot of money. In all the years I've been here I've never saw someone post about wanting to get into wholesaling because it seems like a fun hobby or a good way to get together with friends outside of work.

However, don't conflate my disavowing of your analogy with the idea that I disagree with your premise about wholesaling - I think your thoughts on wholesaling are largely correct :) . I think a closer analogy to wholesaling might be about losing weight than anything like playing music.

It may be the case that we are talking past one another. A few things here:

1. I had not planned on using a genetic fallacy to support a point about my music background. In other words, "I was a professional musician for X years (or I am one now for X years), therefore I'm right" is not something I planned on doing since it's not valid or sound reasoning. The thought I'm considering is about likelihood (and the question of the investment of time in one endeavor over another). My focus is the music business, not just anyone playing an instrument. I'm comparing those who seek to replace their day job by playing music professionally with those who seek to replace their day job by wholesaling professionally. Intuitively, my focus is on doing better than just getting by (since there are lots of pathways that are far more likely to get me there, it seems to me, than starting a wholesaling business and trying to compete with every other musician (I mean wholesaler) on the block who is doing the exact same thing.

2. Low barrier to entry - In general a Low Barrier to Entry means:

that anybody wishing to enter the business does not have to spend a lot of time and money or make a huge investment to enter into competition with the existing suppliers (for example - a lawn care business).

or

Low barriers to entry mean that there is not much, such as a high investment cost, to prevent firms from entering the market.

I am well aware of the difference between buying gear and putting in effort (and as this analogy goes I know the difference between downloading an app and door knocking, or downloading a list and sending mailers). But this misses the focus of my post. Putting in hard work (by itself) is meaningless unless the hard work/effort that is being put in is on the correct thing. I can study books in a library for hours/days/weeks/months but that doesn't mean I get the degree. The degree is the barrier to entry. It is a commonly known principle in investing (for example - Bill Ackman, billionaire investor of Pershing Square Capital Management, talks about this) that it is not advisable to invest in businesses where a very high number of people can enter into said market and compete, naturally b/c the likelihood of significant capital return is low. Buy/hold real estate investing on the other hand (such as done by Brandon Turner) has a much higher barrier since it typically requires lots of capital, the ability to get large loans (potentially from various sources), strategic relationships, a lot more knowledge/know how, and so on.

3. Believing you can make it music - I think you've changed scope/subject here. I am not focusing on hobbyists (as that would not be a correct analogy). My focus is (just as in wholesaling) those musicians who are seeking to make it (and I knew countless numbers of them having grown up in southern California). They were, and are, literally everywhere. There are numerous original acts playing every-single night of the week and countless bars/clubs all over the place (and many of them signed to independent small labels). And this is not including festivals that are held throughout the year where tons of original acts are trying to make it (just like the countless wholesalers out there trying to make it).

4. Casino and Paul McCartney - Not so sir. What if Paul just asks you to play the cowbell ("1,2,3,4")? But this misses the point I made. My point there was about rolling dice at the craps table on two different days (one day getting lucky and other day not). So too, being prepared for something (or just working hard toward it) does not indicate whether or not I'm likely to be successful unless the evidence has already shown that I'm likely to have success. I'm thinking of Warren Buffet here. He is not going to invest in a business where the numbers don't pencil because there is too much competition in that market space (i.e. - wholesaling). In other words, he has to see data that shows he is likely to have a great return or he not moving forward.

5. Staying power - Musicians don't have staying power because the market is saturated with musicians trying to make it (just like wholesalers). Some of the most amazing and talented signed and/or touring musicians did not make it, not because of a lack of hard work, effort, or ability, but because of a lack of demand for their efforts (again just like wholesaling). Additionally, in today's world, it's even easier since we have the internet. Almost anyone can self-produce songs and put them online in an attempt to start a fan base.

Ultimately, at the end of the day, the music business is also about making money (i.e. making a product people want to buy so that you can continue on full-time producing music), since making no money at it means you no longer have a business. You have a hobby.

Lastly for this part, it most likely comes as no surprise by now, but I must differ with comparing losing weight to wholesaling. Nearly ALL of the available evidence shows us that if a person wants to lose weight they need only take the necessary steps of proper dieting and exercise and they will lose the weight. This is not so with wholesaling (at least as far as I can see).

I do thank you for taking time out of your day to reply. I know time is a precious resource we can't get back.

0 Votes

Originally posted by @JD Martin:

Quote from @Joe Splitrock:

@JD Martin is a rock star and investor, so curious to hear his thoughts on this.

LOL. I've had my 15 minutes of fame but mostly I'm a rock star in my own mind 🤣🤣

My thoughts on the analogy

@JD Martin

Thank you for taking the time to reply. Very respectfully, nearly everything you mentioned above applies to wholesaling.

• Music salesman/teacher/guru - there are lots of music teachers (who also sell music gear and work on commission) that will tell you that if you "just work hard enough" you will be a success (just like wholesaler gurus selling mentors/programs and imply that it just has to work if you work hard enough). They may not tell me what kind of success I'm going to have, but they are still selling a dream that is not achievable for the overwhelming majority of people (even for those who don't give up and "grind really hard"), same with wholesaling.
• Low barrier to entry - Any beginner wholesaler (or musician) can easily get into the game with little to no money (or even tons of training). I can skip trace a list and start calling it (i.e. - buy a used guitar/computer, start a band, practice songs/covers, and start playing gigs), all while using YouTube University. In wholesaling, I can download an app and start knocking doors. I can drive for dollars (and on and on, just like getting into music). It would be hard to count how many pop/hip-hop/dubstep lovers started with a laptop, a mic, and a set of headphones.

• Hard work, skill, effort, and sacrifice - We agree! This is the same thing as wholesaling. In a similar fashion to the music business, I can work hard, have the skill, put in tons of effort, and sacrifice a ton, and yet my chances of replacing my good-paying corporate sales job (which pays 6 figures) are slim (and this is even if I put tons of money into advertising).

• Believing you can make it in the music business is part of the picture. Yes, not everyone who buys a guitar thinks they can possibly be a rockstar, but nearly everyone who is trying to make it big, believes they can (kind of like the lottery), when in fact they can't due to how unlikely it is. I think this makes wholesaling look even worse than the music business (yet still similar) - because at least playing music is fun whereas the process that most beginner wholesalers do (cold calling, door knocking, texting, D4D, mailers, bandit signs, etc), is not. The overall point of my post though is about likelihood. In other words, for me it seems like any given person is just as unlikely to be a big success in wholesaling as they are in the music business. But then again, maybe it has more to do with how I go about wholesaling?

• "Getting lucky - no such thing in the music business. Yes, you have to be the right product at the right place at the right time with the right people, and that's a situation out of your hands..."

Being in the right place at the right time...That is called luck my dude :). I go to a casino on Monday and roll the dice with no success. I go to that same casino 5 years later, roll the dice at the same table, and hit it big (i.e. - right place, right time - all with little to no effort or skill). The point is, I think, I have to work hard in the right area.

"...but you have to have every bit of the groundwork in place the moment that opportunity presents itself. Luck is where hard work & opportunity intersect. I think the same is mostly true with wholesaling."

There are more musicians who believed this than not, and yet the overwhelming majority of them did not make big success in the music business (like the gurus implied they would). In fact, the overwhelming number of musicians who get signed and tour don't wind up having big success. They wind up in debt, sell very few tickets/albums, and get shelved or dropped by the label. This is the same in wholesaling. Sure this person might do a few deals, but how much money did they have to sink just to get to those deals?

0 Votes

Thank you everyone for your time, participation, and thoughts. I don't pretend to be "right" about any of this. It's just a stream of consciousness and where my head has been for some time. I think about "the time cost of money". Should I spend my time doing X wholesaling with Y likelihood of success, or something else that has Z likelihood of success? I don't know how many millionaire wholesalers there are out there but it would be interesting to see a comparison between them and millionaire musicians.

@Joe Villeneuve, thank you for the thoughts here as well. My intuition (and perhaps background knowledge/experience) are pulling me toward thoughts about "time investment". For example, if I look at the current landscape in real estate (low inventory, tons of wholesalers in nearly every major market, very low barrier to entry, knowing way more wholesalers who not doing nearly as well as I am at a corporate sales job, and so on) I can't help but ask myself, "Is this really worth my time or am I going to get a better return on my time invested doing something else (for example - working a high paid commission sales job so that I can earn/save/invest/repeat - as Michael Zuber says)?" I'm not sure I know the answer to this question yet but it has been on my mind for some time. Perhaps if I knew of far more successful wholesalers I would be on a different path.

I will mention though, I'm not as yet convinced that being the first to the market is the same thing, or analogous to, having competition in general. Now I do agree that many successful folks made it (in part) by building a better mousetrap but I think it still begs the question of, "Is it ever a bad idea to get into X business and, if so, what metrics should I use to determine when it's a good idea versus a bad idea?" For wholesaling, I currently see a much steeper hill to climb than perhaps other endeavors. But I don't know. It's hard to tell (for me anyway).

0 Votes

Originally posted by @Joe Villeneuve:

I'm sure glad Edison, Gates, Bell, Carnegie, Rockefeller, Ford, Wright (Bros.), etc....didn't have that same opinion.

There are a lot of comments I could make, regarding every item you mentioned above, but instead of writing the next American Novel, I'll just summarize it all with one simple statement:

"All squares are rectangles, but not all rectangles are squares".

Joe, thank you for your reply. Is this a proper analogy, though? It seems intuitive that Edison, Gates, Ford and so many other successful business people were filling a real need (a hole in the marketplace where there was high demand; not to mention a high barrier to entry). Is there a lack of wholesalers in our market today? Keep in mind, I'm speaking of wholesaling specifically, and not so much real estate investing.

If, for example, I have two potential pathways to invest my time/money/effort/energy (one where my return is very likely to yield me the equivalent of say $20k/mo, say a commissioned sales gig, and the other where it is far less likely that I will see a return of that same amount; ie wholesaling, which is the better option)?

0 Votes

Let's say you're at a music store one day, looking at guitars, amps, drums, and the like. A salesman (who also happens to be a guitar teacher and successful musician) begins talking to you about starting a band. He mentions how all you need to do to be a rock star (or pop star, or hip hop star) is by buying the right gear, starting a band, and then working really hard at it (and never giving up). "Yeah man, you just have to take daily action! Grind! Be a go-getter! Don't give up when times get tough! Maybe even take some guitar lessons from a pro like me (for $100/hr). Do that and you'll be a rockstar before you know it. Hey, don't listen to all those naysayers out there! You can do this! Let's GO!"

But I look around the store (and around the city) and I mention to the guy how everybody is trying to do that same thing. Almost everybody I see is buying music gear, starting bands, and trying to be a rockstar. I point out how there is a very low barrier to entry and how nearly anyone can buy a guitar, start a band, practice hard, write an album, play gigs, and try to get signed. I mention how it seems quite clear that most people fail, and that it seems like (most importantly) for those who couldn't make it, it was not for a lack of hard work, skill, or trying. There simply aren't enough opportunities for all of these aspiring rock stars to be successful (i.e. - to become millionaire rockstars).

In other words, the notion or implication that "Oh, anyone can make it if they just work hard enough and don't give up" is not true (at least that's how it seems to me).

This is wholesaling.

In the same fashion, it seems to me, you have tons of online real estate "gurus"/"mentors" giving people the false impression that all they need to do is pull a list, skip trace it, and start cold calling (and just grind hard enough, and not give up), and voila you'll be a real estate millionaire! In other words, they imply that if you just take XYZ advice, and take ABC steps (and never give up), it will work and you'll be just as successful as them; when in reality this is not true at all. And the most important points are those which these gurus are not saying.

1. They got lucky

Just like a rockstar, yes, they had lots of skill (just like a guitar player/singer/songwriter who worked really hard), but for every wholesaler with lots of skill who made it, 10,000+ didn't (and it was not for any lack of trying, effort, or consistency). There simply weren't enough opportunities while attempting to compete with the big boys/girls who are spending $30k/mo on PPC marketing.

2. They make tons of $$$ selling picks and shovels

Remember the gold rush? How many millionaires back then made it not by mining for gold and striking it rich, but by selling the dream of finding gold, by selling picks and shovels (with as much advertising and flare as humanly possible)? "Folks, get your picks and shovels right here while they last! There's gold in them-there hills! Don't believe me! Checkout this gold I found up there! I'm a millionaire now and you can too!" This, to me, is what most real estate gurus do. They are looking for "multiple streams of income", and just one of those giant streams of income is YOU! "Hey, pay me $10k, grind really hard, and you'll a rockstar [I mean real estate investor millionaire] like me!"

3. They overhype self-employment

These RE gurus are so often found poo-pooing working for "the man" or working a corporate job. They overemphasize "getting out of the rat race", or "work for yourself!", when they themselves are putting people into the rat race (for example hiring cold callers at $3/hr in the Philippines).

I realize the above is not all real estate mentors or gurus, but I believe it is the case for many of them (selling a dream that is not possible or realistic for most people; kind of like a rockstar making it in the music business and then saying, "You can do it too! Anyone can do it!"

However, I would very much like to be proven wrong here.

What are your thoughts? Where am I off track? Is it really possible/likely to be a huge success in RE wholesaling if you "just do the right things consistently" or is it the case that RE mentor/gurus are overselling the dream?

One last thing, some might say, "Well, being a huge success is relative! My success level is not your success level. So, if I make $3k/mo in wholesaling I'm happy"; to which I say, that's great for you but that is not what the real estate gurus are selling/implying. Furthermore, there are lots of great paying corporate sales jobs where you can make a very solid 6 figure income and then practice a model of: earn, save, invest, repeat without having to eat/sleep/breath trying to get a startup business off the ground. In other words, partnering with a company that is providing a great opportunity seems very often the way better option. In this way (and again this is just my opinion), it seems to me that wholesaling is itself the real rat race (since it is highly likely that I will be dedicating my life to the pursuit of something where I am very unlikely to succeed).

Thank you for reading and for sharing your thoughts.

6 Votes

As someone who has paid to go through multiple real estate training programs and mentorships, I'm curious to know your thoughts on what I have experienced, observed, learned, and discovered in the past few years.

Here are some bullet points:

Real Estate Mentorships can be great for speeding up your education in RE investing
Real Estate programs can help build new profitable relationships that one otherwise would not have had (such as with successful people)
Real Estate Mentors often will not tell you how difficult/saturated/competitive the industry is
Real Estate Mentors often won't tell you how unlikely you are to succeed (similar to the music/entertainment industry)
Real Estate Mentors will often talk down on corporate jobs, even though many corporate jobs have less stress and better pay than running your own real estate wholesaling/investing business (especially when those jobs are commissions sales jobs)
Real Estate Mentors are highly incentivized not to tell the whole truth b/c it does not benefit their income to do so (i.e. - telling the whole truth would mean less mentees signing up for their $10k programs and therefore less money for them)
Real Estate wholesaling is similar to the music/entertainment industry in that there is a very low barrier to entry and only a few who will succeed (regardless of how hard he/she works)

Please note that I am not trying to be negative here. I am trying to be REAL (as I am someone who wants the TRUTH). If I am off the rails on any of these points please correct me and explain how. In my experience thus far (having gone through many mentor programs while also observing how most participants have very little success) I have noticed that RE mentors have a tendency to downplay any talk that would expose the fact that most of their 'students' not only will not have big success in wholesaling (for example), but cannot have that success. This is, again, due to the saturation of the market given the very low barrier to entry.

I recently did the math on a mentee that (on paper) had 'big success' with wholesale marketing/flipping in the state of New Jersey. This person showed that he and his partner had made over $650k in NET income for the 2020 tax year. Pretty good, right? Well, not according to my calculations. Here is the math I did:

Net Income: $668,631 (13 flips/wholesale deals)
Split w/ partner: $334,315.50
Capital Gains tax: 35% x $334,315 = $217,305
Necessary 2022 marketing capital - 20% x $217,305 =
NET, NET take home - $173,844 per partner

In my corporate sales job I can make between $250-$350k (clock in, close some deals, clock out, and have full benefits). Is the above model worth it? From my view the answer is a clear "NO!" This is especially the case when I compare the work life balance I have now with that of a full time wholesaler/flipper (where they are essentially required to eat, sleep, and breath their business for multiple years with no reliable pathway to true financial independence - 7 days/week and 365 days/year). The way I see it, a corporate sales job can be WAY better than most RE mentors are willing to admit.

What are your thoughts? Where am I off track here?

5 Votes

I'm in the Phoenix market but I'm thinking of going virtual (for buying rentals), especially when it seems like other markets can provide me a much higher ROI and monthly cash flow than AZ. What markets do you think are best right now for ROI/COC returns and cash flow? Also, what markets will be best in the next 12-24 months? If anyone can provide some great data or insights on this it would be awesome.

Thanks all!

0 Votes

All Forum Posts by: Aaron Lietz

Aaron Lietz has started 14 posts and replied 60 times.

Post: Looking for advice from experienced realtors

Post: Looking for advice from experienced realtors

Post: Looking for advice from experienced realtors

Post: Wholesaling is like the music business - CHANGE MY MIND

Post: Wholesaling is like the music business - CHANGE MY MIND

Post: Wholesaling is like the music business - CHANGE MY MIND

Post: Wholesaling is like the music business - CHANGE MY MIND

Post: Wholesaling is like the music business - CHANGE MY MIND

Post: What Real Estate Mentors Won't Tell You

Post: What markets are best for rental property ROI / cashflow?