All Forum Posts by: Ryan Webber

Success in Wholesaling is 80% marketing for deals. As Curtis C. points out, its a numbers game. Let's say for every 100 pieces you send out you generate 1 lead. And let's say for every 50 potential leads you look at, research, or make an offer on, you get 1 deal. Well then it'll take sending out 5,000 pieces to get a deal. If you only send out 1,000 pieces, then on average you will NOT get a deal. You can use the same type of ratio figuring on REO's, foreclosures, pre-foreclosures, short sales, etc.

The 1% understand the numbers game and actually generate enough volume on the front end to get a product at the back end. Most people fail at wholesaling because they suck at finding deals. They suck at finding deals because they don't work hard enough at it. Consistent and persistent action is required for success in Wholesaling and also in EVERY area of life.

Let's say I told you I would give you $5,000 to find a needle in a 3 ft cubic pile of hay. If you pick up one handful of hay, glance through it, and give up, you're an idiot. The needle is there and you could have it, you just have to stop being so focused on instant gratification. Its called W-O-R-K. And as you go to work, you will figure more and more efficient ways to sift through the hay. It may take you 7 months to find the first deal. SO WHAT! It took me TWO YEARS to figure out how to make money in this business. The second deal will come in less time, maybe 5 months, and then 3 months, 1 month, and then deals will come every week or even twice a week.

Its just a numbers game. Consistently and persistently.

I've wholesaled hundreds of houses and multifamily's. Consistent and persistent marketing (and not just with mail outs) was the key to my success.

Reggie Youngblood, you should build a relationship with a realtor to pull your comps and/or give you their MLS access info. You can give them your no-equity leads in exchange.

Some Realtor Associations will give MLS access for sold data only to non-licensed affiliate members. You should call your local association and ask. Its definitely not the majority of Associations but I've run into several that do in Texas.

Brandy Griffin is right on with her post.

Even though the asset managers working for the banks normally give non-contingent cash buyers a built-in inspection period in their disclosures and even though the asset managers couldn't close in 10 days even if their life depended on it, if your offer is a non-contingent cash offer with a quick closing it looks a lot better than someones who is not.

I've beat out many competitors even though my offer is cheaper because mine is stronger.

Jeremy Mcdaniels, no, I actually did not have to bring my own money. On some REO's when I've had to use different title agents I have had to fund it, but my title agent does not require me to bring my own funds on double closings.

Mike Nelson, as Steve Babiak shared, the seller pays the commission, and, yes, it could be argued that you are paying for it anyway. I have an agent who will sometimes cut her commission on HUD's so we can make our numbers work.

WOOOOOOOOOOOOOOOO there. I actually do NOT recommend loaning it out. The question was what would I do with it.

Lending without sufficient knowledge and experience is a great way to LOSE your money. I have seen experienced investors lose $100,000's with hard money lending. Lending is a high risk, high return strategy. Only with in-depth experience, understanding, and due diligence can you adequately decrease that risk to make the high return worth it.

I used to buy from a wholesaler who required her entire assignment fee upfront when signing the assignment. It was hefty sometimes but the deals were sweet so I paid. I still do this with newbie wholesalers that I'm mentoring so that they can get their money NOW, but I require that the title is clear first.

I would recommend that you never assign or double close a property to a buyer without at least $1,000 in your pocket as earnest money or assignment fee. Once they have that much skin in the game they don't back out. Out of hundreds of deals, I've only had two buyers back out after paying me $1,000 non-refundable earnest money.

There is no use to you when you are assigning the contract, but when you are double closing you will receive a credit for the amount of title insurance that your seller paid for (the $500 in my example). So with the $500 credit for the "title premium pass through" factored in, your cost of $600 for title insurance to your buyer is decreased down to $100.

If you are paying all your seller's closing costs (i.e. title insurance) then a title premium pass through doesn't matter because there isn't anything to pass through.

I want to say Houston was one of the few cities in Texas that you can access sold comps via Realtor.com. It was promoted at the BP Summit as a nationwide way to view comps and actives but Texas was lagging behind the rest of the country. Its worth a try.

You really need to spend some time reading through the forums. You have some unrelated terms mixed up.

Assignment - a wholesaling exit strategy where you assign your contract with the seller to your buyer. The transaction ends up being between your buyer and your seller and you get an assignment fee.

Double closing - a wholesaling exit strategy where you sign a contract between you and the seller and a separate contract between you and the buyer. You take the difference between the two prices minus closing costs.

Wraps - this is when you carry the note to someone but you still have a note on the property. Its called a Wrap Around Mortgage. Some states have specific laws around these types of transactions. This really isn't a wholesaling strategy.

Pass Through - refers to passing through the title insurance fee with a double closing. Called a Title Premium Pass Through. Your seller pays let's say $500 for title insurance for selling a property to you for $50,000. The title insurance fee for your transaction with your buyer in which you are selling it for $60,000 is $600. On a Title Premium Pass Through, the title agent "passes through" the $500 from the first transaction to the second transaction. This usually requires the seller to specifically sign off on it.

I had a newbie wholesaler hit me up a couple months ago with a house that I could buy for $35,000. I crunch numbers in my head and think that it might be a deal. He tells me all about it and makes clear that I had to pay ALL closing costs. Then I finagle out of him that there are $7,000 in back taxes and he says that they will "carry" with the property.

ERRRRRRRRRR, HUH?!?

So as we talk about it and I explain to him that back taxes don't "carry" with a property that they have to be paid at closing, I end it with, "Okay so you really need $42K for this house." He says, "No, I need $35K." So I ask him about the back taxes again. He says, "Well yeah I told you that you have to pay all closing costs."

I love newbie wholesalers.

I would recommend that you always include back taxes into your price. ALWAYS. I hung up the phone not wanting to do business with this guy. Think about it like you are trying to build a long term relationship of trust and rapport with professional investors. Jickiness and not being totally up front is NOT the way to build trust with anyone, especially professional investors. Having an investor find out later that they have to pay more than you told them they would have to is a BAD idea to build trust.

I have taken money out of my profits before to make sure the relationship with my buyer is the absolute priority.

6 years ago, I was trying to sell a vacant piece of crap triplex for $28K and I called an investor that I had done several deals with. We walk through it and I tell her everything that I know from the seller that is wrong with it. She says, yes. We sign a contract and drive off. I remember 5 minutes later that I forgot to tell her that it needed a new gas line in one of the units (about a $1,000 fix). I immediately call her and tell her about my lapse. She says its fine. I tell her that I'm not okay with it. She agreed to the price not knowing that there was an issue with the gas line. I tell her that I'd like to drop the price by $1,000 to compensate for my mistake. She responds that she would still have taken it at $28K with a gas line issue, but I insist that we drop the price by $1,000 anyways.

My priority was to build the relationship of trust, not to make an extra $1,000. Fast forward a couple years and that same investor bought several more larger multifamily properties off of me. I would estimate we cleared over $100,000 in profits on those later deals.

I've had investors screw me over for $1,000 before, and what it does is destroy any future potential of business. If you want to maximize your greediness and make the absolute largest amount of money in this business, then have integrity. Integrity will make you so much more money in this business than being a snake.