Is it possible for a Newbie Wholesaler to close at least 2 deals ($3k each) within the next 60 days starting from scratch??
I need to earn $6k in the next 60days or else I’m in BIG trouble.
I understand the process of wholesaling, the BIG challenge is that where I live in West Palm Beach, Florida, there is an overwhelming amount of cash buyers buying properties at full price or more, so making offers on REO’s 30-40% FMV is practically a waist because of all the competition.
So under these circumstances, is closing 2 deals in 60days unrealistic?
Cash buyers making full price offers? Please, put them in touch with me. I have a bridge to sell in Brooklyn.
My point is that no one buying with cash is paying full price. Quite the opposite, in fact.
I am a newbie. I earned $6k on my first wholesale deal within 2 months of starting mailing to absentee homeowners. It may have been beginners luck since it is taking me a few months to find deal #2 (although I am close).
Competition on the MLS is high in my area too. So I opted to do direct mailing instead. If I were you and I had to make $6k in then next 60 days, here is what I would do:
Begin building your buyers list asap. Get the contact info for those cash buyers, go to your local REIA club, call “We Buy Houses” signs, post ads on craigslist, etc.
At the same time, start marketing for motivated sellers: put out bandit signs, hand out business cards, give out flyers, post ads on Craigslist, call for sale by owner and for rent by owner ads on Craigslist. You can go to the eviction court and hand out your business cards to landlords. Network with insurance agents, firefighters, building inspectors, people who deal with damaged properties everyday.
You can also do direct mail, but this will cost some money to implement. If you choose to do direct mail, get as highly filtered a list as you can: be specific about the amount of equity, how long the owner has owned it, is absentee vs owner occupied, etc. You can send the yellow letter or your version of it. Also, try to be creative with your envelope when you mail. You want it to stand out from the crowd so that it gets opened.
Have more than 1 exit strategy: Some leads will be a slam dunk to wholesale; but what if the seller is motivated but short on equity? I would suggest also learning about lease options and seller financing, including subject to (these can be flipped to an investor or you can keep them for yourself). These will open up the number of deals you can make with a homeowner and let you maximize each lead. Also, form a relationship with a real estate agent: you can feed him/her leads for a fee and s/he can help you with comps.
It might also help to team up someone, maybe another newbie, someone who is strong where you are weak, example you can combine your marketing, and you specialize in leads for lease options, and your partner specializes in leads for seller financing and subject to. You work together and split the profits.
If you have the time and do this full on for the 30 days, you should get to your first deal. I wish I had to time to implement all these strategies but I work fulltime, and I have 2 boys, so for now, I am working this parttime and relying mostly on mailing. But my leads are starting to pick up especially since I started talking with homeowners about lease options (I am looking to do sandwich lease options).
First of all, if you look at your situation thinking “I need to earn 6K in the next 60 days” you’ll never get the 6K. On the other hand, if you start looking at your situation thinking “I’m gonna go GET 6K in the next 60 days!” then you will be able to get it.
Second of all, it is possible for a newbie wholesaler to close 2 deals and make more than 6K in less than 1/4 of that time. It’s been done, there’s no question about that.
My advice would be to start out networking will all those cash buyers in your area. Get familiar with what they’re buying and who they’re buying from. Then, put together some type of marketing campaign (yellow letters, postcards, online ads, etc.) If these buyers really are buying at full price I’m sure they would be ecstatic to buy properties from you at 75-85% of FMV.
Don’t think of everyone else as competition. Network with them, work with them, and learn all you can from them.
One thing I would say is to build your buyers list and market for sellers at the same time. Like dufefan said, the investors in your area sound like they will jump all over anything. When that is the case, if you find the seller, finding the buyer is easy (but you will still have to look).
There are buyers in FL, as well as AZ, that are paying full ARV for REO’s. Why? Because these are rentals and they are garnering double-digit annual returns. So, even at full ARV, if the annual ROI is 10%, it’s worth it. In addition, that house will be owned free and clear in roughly 10 yrs. After that, it’s an ATM machine.
I review leads all day long from Phoenix, where I routinely instruct my student to offer 80%+ on REO’s. That’s what his competition is offering. So he needs to, also. Anything less won’t even be considered.
Oh, one more thing, some markets are reporting relatively low inventory. For example, Phoenix is saying it has roughly 15k REO’s left, compared to 45k a year ago. Now, I’m not sure if this is accurate, or just creating the illusion so buyers offer more. But, regardless, it doesn’t really matter. The bottom line is buyers are paying high prices for REO’s in some markets.
That’s one of my favorite quotes! It’s soooo true. All you need to do is get in the mindset that you “think you can” and you eventually will. Its that simple.