All Forum Posts by: Ryan Webber

Wow, with that kind of hype I have to chime in here.

Before you jump in too heavy with bandit signs, you need to research Houston's city codes and enforcement around them. Larger city's usually have well established protocol with bandit signs. If they take them down within a day or two, you might be wasting money on a bandit sign campaign. Some cities are also very strict about prosecuting people that put them up. There are even some cities that allow you to put them up if you pay a per sign fee.

As for cutting them or not, I think 12x18 is fine. I've had success with bigger and smaller signs, so I don't think its paramount. I actually don't like them too big because they end up bending in the Panhandle of Texas wind and aren't readable. You might not have that problem in Houston, though.

No matter what your budget is, I'd recommend you start driving your farm areas. Look for vacants and make phone calls and send letters to the ones with equity. Not only can you get deals this way but it will also help you learn your areas. You need to know your farm areas intimately or you will be wasting a lot of your time chasing deals that aren't deals.

As for a blog or evoice, I think both are a waste of your time right now. A vanity number has some value, but I wouldn't get hung up on it if you don't have one.

Your time and your money needs to have a laser focus. And that laser focus needs to be on finding MOTIVATED sellers and CASH buyers. Right now 80% of your focus needs to be on finding MOTIVATED sellers. 20% on finding CASH buyers. Once you find a deal, switch those.

Now as for specific marketing strategies of where to spend your money, I have to admit that I am not always as forthright on BP as I could be with this particular subject. This being a public forum and with several of my direct competition being on here (several of them I helped get started), I don't like giving up the goods on my specific marketing campaigns.

See with wholesaling, once you've established a good buyers list, the only real key to it is finding deals. The business becomes 95% finding deals. At my stage, this business is ALL about my marketing edge, so I don't really like to publicly discuss my edge. This is the first time in 4 years of being on here that I've even admitted this reservation. I normally just don't chime in when people are asking specific questions of how to spend X amount of dollars.

So point being, I still ain't giving it up. What I will tell you publicly is that there are no "golden" strategies to find deals. There are some silver strategies that will get you 3 or 4 deals a year, and there are some copper strategies that will get you 1 or 2 a year, and there are some that might get you a deal a year. The key to building a sustainable income from wholesaling is to start doing 2 or 3 strategies consistently and persistently. Then after you get those going, add 2 or 3 more, and then 2 or 3 more, and 2 or 3 more, until you have 15 or 20 different strategies that you are working consistently and persistently. Evaluate each strategy's effectiveness after doing it for at least 6 months.

Different strategies in different markets work differently at different times. You have to be open to experimenting with different strategies. Try them out for at least 6 months consistently and persistently and then evaluate their effectiveness. I have seen that some strategies will work for awhile and then fizzle out for months or even years, and some will not work for 6 months and then they will pop a deal or two. You have to be open and creative, consistent and persistent.

Also understand that many markets experience strong seasonal shifts in activity. My market dies in the winter time. Going to Vegas is a better investment of my money than spending it on marketing in the winter time. I've been told that not all markets are this way.

Kenneth, you are welcome to call me and I'll be glad to privately help you with some particular strategies for your particular market.

I disagree. By far the best wholesaling opportunities are in areas that 90% of investors will tell you that they don't buy in. Most investors will tell you that they want houses in high appeal areas. Problem with that is that when you go to find deals in those areas, you will be competing against everybody and their dog to find a deal. Too high of a demand will cause you to have a lower success rate when looking for deals. You need to be in an area that has a relatively good demand but also has a high supply of high-equity properties.

I have had much more success PICKING my potential farm areas where I will be wholesaling in BEFORE I ever contact an investor in that area. This ensures that I'm investing my time into an area that will have an abundance of deals. Deals are harder to find than investors. I would rather have 10 deals in an area with only 5 strong investors than 1 deal in an area with 100 strong investors.

This is how realtors qualify buyers, not wholesalers. As a wholesaler you need to feel out your buyers by conversationally asking them several pointed questions that will quickly tell you how serious their financing is. Anybody can get a POF or pre-qualification letter. That is not what you are looking for to determine how serious an investor is.

How many properties do you own?

This is the number one pre-qualifier question. If its 0 or 1, be prepared for trouble. You will be holding their hand through the whole thing IF, and that's a big IF, they can even close. 5, 10, or 30 properties tells me that they know what they are doing and I'm dealing with someone who has already jumped through the hoops before. You won't be needing to hold their hand through it. I'd still verify what they own through public records. Most people are pretty honest about this but you never know.

How fast can you close?

If its anything more than a week or two I know I'm dealing with someone who is at least a semi-newbie.

Who are you getting your financing through?

If its NOT cash, hard money, or a COMMERCIAL loan officer/department (learn the difference between commercial and residential loan departments), then you are going to have problems 95% of the time.

Those 3 questions will qualify your investor buyers more than any POF will.

LOL

Years ago I used to debate with people who thought wholesaling in their market was too difficult to be viable THEN, now I'm debating with people who think it was viable in their market THEN but NOW its not.

Argue for your limitations and sure enough, they're yours.

This business is clearly as hard as you make it, and not one bit harder or easier than exactly that.

I know investors that were making millions of dollars in this business five years ago and I know investors that were going bankrupt five years ago. I know investors that are making millions of dollars in this business NOW and I know investors that are going bankrupt NOW.

Acres of Diamonds in your backyards, boys. I would be surprised if someone is NOT making money right under your noses where you think it cannot be made. That's exactly what true entrepreneurs do.

As long as there is buying and selling going on, there is opportunity for wholesaling.

Yes, financing for EVERYONE has gotten tighter.
Yes, cash or cash equivalent buyers are harder to come by.
And even with these being true, YES, you can still wholesale in ANY market that people are still buying and selling in.

I will GUARANTEE you that there is a price that a cash buyer will buy 95% of the houses in your town for. IF its low enough. The trick is finding out how low that price has to be. Maybe its 70% of ARV, maybe its 60%, maybe its 50%, I don't know, maybe its 20% of ARV in your city, but there IS a price that cash buyers will buy at for 95% of homes in most cities over 100,000 people.

Take that fact with the fact that over 30% of ALL homes have absolutely NO mortgage. And then take those two facts and combine them with the fact that the current economy has created a higher percentage of motivated sellers than our industry has seen since the Great Depression, and what you get is that there is an incredible opportunity for wholesaling right now.

There are still buyers in California. There are still buyers in Michigan. There are still buyers in Florida. There are still buyers in Arizona. The ABSOLUTE worst markets STILL have cash buyers buying in them RIGHT NOW. They are just buying for significantly lower prices than they were 5 years ago.

Here is the secret to wholesaling. This single principle encompasses what wholesaling is all about and why it works. This principle IS wholesaling. This principle is how I have wholesaled hundreds of houses and continue to wholesale houses EVEN in our current economy.

Are you ready?

Here it is. . .

Price overcomes all objections.

No, no wait. I know you've heard it before but read it again. Read it like its an ABSOLUTE TRUTH of this business. Read it like you can completely trust it. Like you can stake your entire life earnings on it.

PRICE OVERCOMES ALL OBJECTIONS.

Well you say, "There's less buyers in the market. I don't know if wholesaling will still work."

I say, "Price overcomes all objections."

You say,"I have a GREEEAAATTT wholesale deal that's not selling. I think wholesaling is dead."

I say, "Price overcomes all objections. Lower the price enough and you will sell it."

If you are selling a house and you are selling it for a low enough price (AND you are adequately marketing it), you WILL sell it.

You WILL sell it because PRICE OVERCOMES ALL OBJECTIONS.

Now in reality, this is NOT an absolute truth of this business. Price overcomes MOST objections. The one exception is when a property has a negative value (meaning they have to pay YOU to buy it).

Let's say you have a house with a $40,000 ARV but it needs $40,000 in work to get there. The only way you are going to buy it is to get the seller to pay you for it. In my experience, less than 2% of houses outside of war zones have a negative value, so you won't run into often but it does happen.

Other than that exception, always remember . . .

Price overcomes all objections.

That's what wholesaling lives and breathes on, and as a wholesaler you need to understand this truth intimately or you won't stay in business long.

You really answered your own question.

"each deal has to be vetted on its own"

In general I would say that 95% of "wholesale" deals, including those on a website, are worthless. But again, each deal has to be vetted on its own.

I am a reliable wholesaler, and I have my own website, so YES it is POSSIBLE. But again, each deal has to be vetted on its own.

Most wholesalers, good or bad, are probably going to have a website of some kind, so I think the answer to your question is found less in the percentage of reliable wholesaler websites and more in the percentage of reliable wholesalers in general.

Wholesaling is the full moon of investing. It brings out some interesting characters. Here's one wholesaler in my area that clearly communicates his frustration with how other wholesalers operate: http://www.youtube.com/watch?v=achBE3_w4mA

With what you've already learned on here from this one post you will be more advanced then 95% of investors that will be looking at your properties. Be careful of your jargon (your fancy words like COC) when talking with most investors. They won't know what you are talking about. Make sure you speak their language, whatever that is. I always ask questions of my investors to find out how sophisticated they are. I have met 1 or 2 out of hundreds that say anything about Cash On Cash return. Now with some of the investors that I've mentored and taught some of these terms to, they understand. But for the average investor, you might as well be speaking Latin.

That is only true if you are in a disclosure state. A non-disclosure state, like Texas, does not have any public record of sales prices. You can't find any public data on how much I paid for any of the houses that I've double closed on (except the ones I bought via the MLS).

If BOA owns it, its a waste of your time trying to contact them. They will sell it as an REO through an agent.

What should you do next? Find another vacant house.

Don't waste your time on bank owned houses (REO's) unless that is part of your strategy. You can search through the Wholesaling Forum to find out why some wholesalers focus on REO's and some don't and how its different.

REO's are different (more of a pain) than dealing with homeowners directly but they still can be wholesaled. I've wholesaled REO's on multiple occasions but I'd prefer dealing with a homeowner.

To wholesale an REO you will need a significant earnest money deposit (normally at least $1,000), proof of funds/financing, and you will need to double close the property (probably needing transactional funding in Cali). You will need to make sure that you pick the closing agent/company or at least the "courtesy" closing agent to do the transaction, since double closings live and die based on the title agent.

HOLY COW STEVE!

You are the man.

Here's one for you. :beer:

:woohoo:

I think the primary purpose of the 2% Rule is being overlooked here.

The 2% Rule (or how I prefer to look at it, a monthly GRM of 50; rent multiplied by 50) is not a way to calculate IF a property will cash flow. The 50% is a rule for figuring that out.

The 2% Rule is a general rule to determine IF something is a good deal in terms of Risk Vs. Reward (RVR). Just because a $175,000 property cash flows $325 does NOT mean its a "good" deal.

The 2% Rule insures not just positive cash flow as the 50% Rule does, but goes a step further with insuring adequate reward (cash flow) for the risk (purchase price). The 2% Rule guards your exposure in only allowing you to risk $100,000 for that amount of gross rent. Its a preset babysitter for RVR.

Now whether the 2% Rule prescribes a RVR ratio that is too conservative for your preferences, is a personal decision on your part, but let's not confuse the 2% Rule's APPARENT weakness with its true built in strength.