All Forum Posts by: Ethan Neumann

Typically the cash buyers that we work with are either "flippers" or buy and hold investors (BRRRR Investors) looking to build large rental portfolios. Sometimes I come across doctors or lawyers looking to invest, but these people are normally working with real estate agents.

Like @Brandon Vukelich said, a lot of these flippers are husband and wife teams who are doing a few flips a year. These are some of the highest buyers IMO.

Wholesaling seems to be this glorified way to get into real estate. Big "gurus" make it seem like you can become an overnight millionaire with no money out of pocket and no credit. While this is possible, with time, they don't tell you about the "dark" side of wholesaling.

1. It's hard to be profitable - A lot of wholesalers like to flex how many deals they are doing or how many assignment fees they have collected. That's great and all but you know what they don't talk about? They don't talk about how profitable their business is... how much they're actually putting in their pocket. Do you know why? Well, because a lot of wholesalers either don't realize they have to treat wholesaling like an actual business, or they get addicted to the "big" number (gross income) and don't focus on what actually matters (net income).

Get your systems right, track your numbers, be smart with your money, get educated. All of these things will help you create a PROFITABLE wholesaling company, not a money-sucking machine.

2. It does take money to start or at least to scale - A lot of gurus are talking about wholesaling take no money and no credit!! Now I know you can get a deal for "free" using a few different methods. But what is free in money is not free in time. If you actually want to create a wholesaling business that is worth your time and generates the income you probably desire, you're going to need to put in some cash. Data is expensive, the software is expensive, labor is expensive. You can't create a scaled wholesale operation by driving for dollars, using "true people search" and calling with your cellphone. Although that may be a good place to start, the time it takes to get there will be longer than you are initially anticipate. (most likely much longer)

Now I know this isn't the case for everyone, some people get deals quickly, but very few. If you want to really get started and hit the ground running, put some money into the business. Get a dialer, buy a list, hit the phones!

3. It is extremely active - You are not going to get rich overnight with wholesaling and it is certainly not going to be easy. The people who actually make it in this business are hustlers. They get up every morning ready to attack the phones, hammer follow up, and create a solid foundation of systems. That takes time.... a lot of time. I used to hit the phones from 9 am to 8:30 pm and spend all of my other waking hours educating. Wholesaling takes consistent effort and effort takes time.

Now once you build up your pipeline and have deals rolling in, you can now start to delegate activities, but your job isn't complete. Now you have more leads coming in, how are you going to handle all of these leads? How are you going to manage your CRM? How are you going to organize your data? How are you going to manage these people?

There are evolutions to your business, and just like every other business, it will take a lot of TIME to create something special.

I say all of this to give people a heads up before getting into this business. If this post deters you from starting your journey, that journey may not be for you. However, if you know this journey is going to be one of the toughest things you've ever done and you still want to take the leap.... you already made it, time just hasn't caught up yet.

Does anybody have good recommendations for transactional funding companies or individuals? 

Need to double close on a property in NC.

Thank you for all of the responses!

Wholesaling seems to be this glorified way to get into real estate. Big "gurus" make it seem like you can become an overnight millionaire with no money out of pocket and no credit. While this is possible, with time, they don't tell you about the "dark" side of wholesaling.

1. It's hard to be profitable - A lot of wholesalers like to flex how many deals they are doing or how many assignment fees they have collected. That's great and all but you know what they don't talk about? They don't talk about how profitable their business is... how much they're actually putting in their pocket. Do you know why? Well, because a lot of wholesalers either don't realize they have to treat wholesaling like an actual business, or they get addicted to the "big" number (gross income) and don't focus on what actually matters (net income).  

Get your systems right, track your numbers, be smart with your money, get educated. All of these things will help you create a PROFITABLE wholesaling company, not a money-sucking machine. 

2. It does take money to start or at least to scale - A lot of gurus are talking about wholesaling take no money and no credit!! Now I know you can get a deal for "free" using a few different methods. But what is free in money is not free in time. If you actually want to create a wholesaling business that is worth your time and generates the income you probably desire, you're going to need to put in some cash. Data is expensive, the software is expensive, labor is expensive. You can't create a scaled wholesale operation by driving for dollars, using "true people search" and calling with your cellphone. Although that may be a good place to start, the time it takes to get there will be longer than you are intially anticpiate. (most likely much longer) 

Now I know this isn't the case for everyone, some people get deals quickly, but very few. If you want to really get started and hit the ground running, put some money into the business. Get a dialer, buy a list, hit the phones!

3. It is extremely active - You are not going to get rich overnight with wholesaling and it is certainly not going to be easy. The people who actually make it in this business are hustlers. They get up every morning ready to attack the phones, hammer follow up, and create a solid foundation of systems. That takes time.... a lot of time. I used to hit the phones from 9 am to 8:30pm and spend all of my other waking hours educating. Wholesaling takes consistent effort and effort takes time. 

Now once you build up your pipeline and have deals rolling in, you can now start to delegate activities, but your job isn't complete. Now you have more leads coming in, how are you going to handle all of these leads? How are you going to manage your CRM? How are you going to organize your data? How are you going to manage these people? 

There are evolutions to your business, and just like every other business, it will take a lot of TIME to create something special. 

I say all of this to give people a heads up before getting into this business. If this post deters you from starting your journey, that journey may not be for you. However, if you know this journey is going to be one of the toughest things you've ever done and you still want to take the leap.... you already made it, time just hasn't caught up yet. 

@Brandon Morris If you are going to be solely cold calling and not actually closing the deals, I wouldn't be going into it for the money. 

Cold calling is something that most companies outsource to other countries at $2-$6 an hour. If you are doing it in the evenings and weekends only, it might take a little while to get the deals coming in. Think about it, the acquisition managers are going to have multiple cold callers under them to give them the number of leads they need to make enough money. You will be one of those cold callers. 

Most companies that are actually doing deals pay their AMs a base plus comission. 

If I were you, I would try to jump straight into being an acquisition manager. You will get way more money and you will become not only good at sales but also closing. 

Tell him that you work with financial partners that you leverage for deals that you can't flip yourselves. Most people aren't opposed to the fact of you assigning the contract as long as your script positions what you are doing correctly.

Personally, we just act as if we are closing on the deal to ease the seller's mind, but we have friends in the industry that tell all of their sellers they are looking to assign the contract before getting it under contract. Again, it all just comes down to how the script positions you. If you need help with this wording, I would advise watching some of Jerry Norton, or Max Maxwell's, videos on script building. A lot of good information in there.  

Having an attorney overview your documents is advised but not necessary. I wouldn't spend too much time held up on getting this done when you could be calling potential sellers.

For our first few deals, we never had an attorney look over our contract, we just spent that money on marketing. I believe our first purchase contract was from Keith Everetts "Hustle" mentorship that he offers for very cheap on his website. Also, if you wanted to go a different route, you could look up "Jerry Nortons Purchase Agreement" on Google and there should be links to his website where you can download all his contracts for free. I would recommend either of these for getting off the ground. 

The biggest thing just comes down to understanding why each clause is in the contract, and what it means for you and the prospective seller. No need to waste too much time, or $$$, on this until you really start consistently locking deals.

@Kerri K. Definitely take advantage of the 10,000 property records you can pull each month! Propstream allows you to pull niche lists of homeowners that are tax delinquent, failed listings, high equity, or even in preforeclosure. These lists cost nothing (besides the Propstream monthly subscription) and continue to bring us a nice stream of hot leads each month.

Watch some videos on Youtube to find the best niche lists you could pull. We've gotten creative with using the "Portfolio" filter with other motivation indicators to pick out some solid lists in our target markets. 

Investment Info:

Single-family residence wholesale investment in Durham.

Purchase price: $235,000
Sale price: $255,000

Took over the mortgage sub to and structured a seller carry-back for the remaining equity.

There was a tenant in the property until June of 2021 at which point the buyer planned on selling the property. Knowing this information, I negotiated the seller down another 15k by stating we could include a balloon payment at the twelve-month mark.

At the time of going under contract, the property was worth around 295k-300k, built-in 2011, and in one of the hottest areas in the Triangle.