newbie wholesaling

Bird Dogs, Wholesaling
1

Hello all,

I am from Chicago and completely new to real estate investing. Although I have yet to complete my first wholesale deal, I have been doing extensive research on it and believe I have enough knowledge to dip my toes in thru wholesaling in real estate. I am anxious to begin my journey (and God knows to escape my current situation), but Im waiting to attend FortuneBuilders’ 3 day workshop in a couple of weeks to gain those additional tips/tricks before I take my leap into wholesaling. Despite what I have learned thus far, I know Im quite far from everything I need to know. Long story short, I have absolutely no money and very little resources. Because of this I planned on generating my first deal or so via craigslist or driving for dollars until I can further invest in other marketing campaigns but I currently have no buyers on my list. After I leave the FortuneBuilders workshop I will be starting from scratch. Hopefully I can run across another wholesaler or mentor investor to assist my guidance and knowledge in a good direction until i understand basic ins and outs of the business, but until then I know I’m in it alone and just had a couple questions before I attempt to close my first deal…

Being in Chicago, will I have the “seller side HUD” option? I heard you can save A LOT of money with this if you regularly double close and never use this “feature”

How can I make sure the contracts I have printed off the internet are parallel to Chicago’s laws/regulations, etc. and protect myself at the same time? I have no clue where to find contracts for Chicago without paying a lawyer an arm and leg to verify

How should I go about structuring an offer (on either end of the deal) if I’m unable to accurately estimate repair costs? I forget where I was reading, it suggested I multiplied the sq footage by $15 is this good/true?

(Just turning 24 yrs old) I have never dealt with lawyers, title companies, etc. so I guess I will let the other parties in the deal choose the title company to use (good idea?) Prior to closing, what kind of deposit will my buyer need to submit? And is a Proof of Funds letter absolutely required somewhere in the deal?

Being a newbie wholesaler I believe a lot off buyers and/or sellers wil look at me and wouldn’t want to do business with me due to my lack of knowledge, experience or accomplishments, this is why I would love a partner or mentor around but until then I just plan on starting, willing to make mistakes (as minimal as possible) and learning from them. Chicago is a big city with perhaps a lot of people in real estate, so I dont know if this plays as an advantage or disadvantage to myself. I apologize for the super long post but I thank you for your time… Any answers/suggestions would be greatly appreciated…

Thanks again

2

What is Fortune Builders costing you?

Apart from what you might hear, it’s not practical to ‘wholesale’ without having any money to work with.

Scratch/borrow/partner with somebody who’s got $5K to blow.

Otherwise, a ‘no money’ wholesaling scheme is also called "unicorn wrangling.’

I’m not saying it’s impossible, I’m just saying it’s improbable.

Otherwise, keep your day job to give yourself a financial cushion.

Google “Chicago real estate wholesalers” and see what shows up. That might be a clue to some connections, guidance, business, and training as a birddog, which would likely be a more profitable than trying to Home Depot this thing with no money.

Meanwhile, I posted a plan here somewhere, to help a newbie find his first wholesale deal within 60 days, with only $400 bucks for marketing. You might find it helpful.

3

Ok thanks for the advice javipa, I believe they said it’s a $2k-$3k course but at their seminar they were offering it for $197

4

I’ve spent twice that on several training programs myself.

Since you’re going this route, the most valuable resources that you’ll likely acquire is the connections from the training.

Get names. Get numbers. Get emails. Create a network of like-minded people, and keep in touch with them.

Probably 95% of them won’t do a thing with what they’ve paid for.

Why? Because, most are only curious, but not really serious …especially when they discover that the unicorn deals are dead, dying, or never existed, and/or that work is actually involved.

BUT, these folks have $3K to blow on real estate training! Who knew?

Never mind they’re never gonna actually take action. BUT YOU WILL. And when you’ve got a deal to flip, you’ve got a ready list of potential buyers, partners, mentors, referrals, and sources of money, etc.

So, if you’re smart you’ll consider the money spent, as the cost of rubbing shoulders with an instant network of fellow investors, who are quite happy to help you make money, even if they’re only curious about it themselves.

Most people don’t ‘get this.’ They pay. They attend. They leave without a network. A year later, they’ve got nothing to show for the money spent.

5

Very true… how should I approach them? Being completely new to the whole thing should i just tell them I will aquiring properties soon and hope they go out on a limb with me, or just act like Im not a complete rookie and perhaps take a bird dogging approach?

6

You approach them by nervously getting close, and talking really softly, so they have to lean in to hear what you have to say. This gives them a feeling of superiority, and you become non-threatening.

This way they know you’re not crazy, and will be ready to give you their personal information. Be sure to quietly ask how much money they have in the bank, or something about their personal savings account balance. That won’t make them nervous whatsoever.

They’ll appreciate that you’re proactive in getting to know fellow investors.

It helps to calm your nerves by rubbing your forehead continuously and asking everyone you meet, if they feel hot, at all. Everyone will realize that you’re just one of them, and they’ll open up to you.

Or, you could just trade business cards with everyone you meet.

I think the sweaty, nervous approach works great, if I want to be left alone the entire time, or I want all my movements recorded by surveillance cameras.

:beer

Just be yourself, and tell people what you’re trying to accomplish. You don’t have to pretend to be Donald Trump, or explain that you’re a gross newbie. They’ll pick up what you are without you having to put on a show. :beer

7

This is great information and very helpful.

8

if you can attend the seminar without paying $197 do that… if you have to pay $197 to attend dont do it!!! go home 10 times out of 10 all the info theyre going to share is on here… take your $197 and buy some bandit signs that will get your phone ringing!!! buy atleast 100 so they will be around $1 a sign. buy a few stakes to go with it and pay shipping and boom you’ll have a deal brewing in no time. fortune builders wont tell you anything new that we cant tell you here… also place some ads on craiglist and network with the wholesalers on there. theyre all over the real estate by owner section with ads like we buy houses etc… find a REIA to go to and network there also. You dont have any buyers?? no problem leverage your new wholesaler buddies buyers tell them hey whats your buyers criteria? if i bring you a good deal that matches your buyers can we split the deal? its called JVing(joint venture)… that will help you build up some money to do more types of marketing and pay some bills… dont quit your job just yet either!! :beer any questions just ask us or search the forum for them…

Also networking is cool at the seminar but more then likely its going to be filled with people just like you… ask yourself why would a wholesaler or investor/buyer be here if their already doing and buying deals?? the spot is the REIA thats where the investor and investor friendly agents hang out… and you can also advertise your deals there too :beer

9

I have to wholeheartedly agree. Paying for a seminar that promises to teach you the “unknown” tricks of the trade is bunk. All you need to know about wholesaling is right here in this and other real estate forums. We are the experts and well mentor you and answer your questions and point you in the right way - FOR FREE! Take your hard earned cash and invest it in your business - not the owner of the seminar.

10

i don’t think it’s either/or in getting training. It’s both.

One will be organized, detailed, systematic, and organized around a principle.

The other will be ad hoc, often conflicting, mostly disorganized, mostly organic, and with no organizing principles behind it, requiring lots of hunting, pecking, and sifting.

You have to pay for the first one. This is a small world. If the expensive stuff is a waste of money, we’ll hear about it …especially from forum trolls, the ‘work in your underpants believers,’ and the unicorn chasers.

11

Chuck’s absolutely correct…the information they did disclose I found all on here in retrospect after the fact.

12

I think the best advice I have read and seen about getting into real estate is that it needs to be treated as a business - not a hobby. That means creating systems and steps to meet established goals. Scheduling time to complete tasks and carefully weighing risks and benefits when investing/building the business.

13

I am in Chicago, and the gurus regularly come through here. From Fortune Builders, Scott Yancy, etc even the dreaded Armando Montelongo.

They say it is 2k-3k but offer to you for 200. Well if they offer it to everyone at 200, then it is worth $200. So don’t think you are getting a deal if everyone is getting that deal!

The best advice I can offer anyone on Wholesaling is DON’T DO IT! Not a single person I have ever met started their interest in Real Estate by saying… I want to get into Real Estate Wholesaling. Most don’t know what it is, until they attend a seminar or some Guru Info-Mercial watching late at night.

I will be putting up a video on my YouTube Channel that is the first in a series on why you SHOULDN"T WHOLESALE!

Let me ask you this, why did you get into real estate? what did you want to do in real estate? We know it isn’t Wholesaling, so what is it you wanted to do?

14

I just got out of the shower cuz I’m getting ready to go to the Title Company and pick up my check for $13,000 frikin dollars. Yea, don’t get into wholesaling if you want to pick up checks like this. I’ve got 11 deals in Escrow that amount to some serious profits, if even half of them close I’ll still be collecting some wild ass profits.
This is another one of those deals that just fell in my lap. A Realtor called and said he had a fixer for $59,900 I don’t do well with Realtors, their properties are overpriced and all the red tape to go thru and the 40 page contract and their sucky know it all attitudes. I told Raul the Realtor I cudnt do anything at that price. He insisted I make an offer. I told him I didn’t want to fill out his 40 pg contract, put up an earnest deposit just make an offer. But he insisted.
I told him to call the seller and ask if he wud accept 45K Cash. This property is on the MLS.
I was shocked when he calls back and tells me they accepted, crap why didn’t I offer 40?
I jumped thru all his hoops and again was shocked when my buyer wants it at 58K I havnt seen this house, I never met Raul and I havnt even met the buyer even though we’ve done 15 deals now. Yea, don’t waste your time wholesaling unless you want to make massive profits.
Excuse me, I gotta go, I’m on my way to pick up my 13 Grand.

15

Good going, Rando…!

16

Way to go Rando!! :beer

17

Thanks everyone for the advice/thoughts! I have short-term, mid-term and long-term goals related to the business of real estate investing. I always wanted to be involved in the RE business, but before last year I had no clue where to start, until I did a little more “soul searching/due diligence”. I believe REI can take me places far greater than working to make the next guy rich can, it’s also a business I can actually enjoy doing for the rest of my life. For the past few months, I’ve been stuffing myself with an ample amount of information regarding wholesaling and real estate investing in general. I’m at the point where if it doesn’t teach or motivate, I don’t focus on it.

I guess in reference to answering @WCRT 's questions a little more, my initial strategy was to wholesale. I believe it’s “getting my feet wet” in the business, while teaching me a thing or two, until I gain enough capital and/or experience to transition into fix-and-flips. This is what I’m aiming towards primarily for active income, simultaneously building capital for buy-and-hold properties I plan to acquire and invest in as long-term strategies for passive income. The overall goal is to have invested enough active income into passive income strategies where I can make a killing on a highly consistent basis, living life as I please, letting the money make itself. At that point my network should be large enough to consider becoming a PML/HML. But as for now, I’d honestly be very happy to close 1-2 deals monthly. It’d surpass my monthly income and secure my yearly income ideally.

I was born and raised here in Chicago, 24 years of age, and in my real life, I know of no one who shares these kinds of common interest of the business as I. It’s also extremely rare to find someone my age with this kind of mindset where I’m from, but I definitely know that there is people out there! On the other side of the token, from information I gathered through resources, the Chicago market is hot right now. Mentor or no mentor, I will begin my marketing campaign in the next few weeks to come. The whole process of wholesaling seems pretty simple, but by any means, I know it’s not easy. However, I don’t care how long it takes, I must succeed. Whether it’s marketing, negotiation, or what have you, I won’t let any kind of bump in the road stop me until I receive that “reality check”. Then I will invest into other marketing strategies and keep going. I wish I would have started sooner, but I’m certain I can’t go wrong if I start now. As long as I stay consistent, by the time I’m 30 years of age, I’m positive I will have at least half of (or close to) my goals completed, marking a level of success I’ll be extremely comfortable at.

I strongly believe that your network is equivalent to your net worth, but with that being said, I personally don’t know anybody in the real estate business. It would be my pleasure to take @WCRT or anybody else reading this comment/post in the Chicagoland area to a cup of coffee or something of that nature as I would love to network with fellow Chicagoans already doing what I’d like to be doing whom obviously shares similar interest in the business. Bottom line, I’m highly open into seeking possible friendship as well as partnership on joint-venture business opportunities or any way we could conduct business together in a nutshell. It’s A LOT of money to be made in this business, enough for us all, why not assist one another to reach the same goals we’re all aiming towards? Generally speaking, I’d rather make 50% of anything instead of 0% of nothing, but that’s just my $0.02.

18

Great post for me to respond to as my first post here…

Sounds like a great deal, however:

  1. Why the heck didnt the “buyer” make a $58,000 offer to original owner based on MLS?
  2. How the heck is “buyer” going to make money buying at basically the price that received no interest?

By the way, I’m not poking, just trying to understand.
My RE experience is that I own 4 rental propeties in the more conventional way. Equity form 30-100%.
I’d like to expand my horizons, but am having a hard time wrapping my head around the need to find so many people that need to make a mistake in order for me to prosper.

Thanks in advance.

19

wholesaling is a good starter business.
good to have a little cash of your own to be able to tie up deals if you need to but i believe if you get out there and negotiate a great deal you will be able to wholesale it to someone… “if the deal is good enough, the money will come”

as far as fortune builders i am not a student of theirs they came along after i was well into the business but all i have read of them and see of them they are not just putting out BS content. they may not be inexpensive but they are sharing with you experience you are going to pay for one way or another.

i value others experience… even if i have to pay for it.

20

Robbieg

The reason the buyer didnt make a offer to the original owner is because he probably didnt know it was on the MLS…

Wholesaling doesnt have to be about making a profit off someones mistake there are so many ways to aquire properties to wholesale for example a retiring landlord may not have made a so call mistake he may just want to sell all his properties because hes old, so if you make first contact before anyone else and find out hes selling his properties but you know you dont have the cash to buy the properties for yourself why not play middle man and make a few dollars… so many things in this world are wholesaled to us even, for example the grocery store they buy alot of there food from companies who sell to them wholesale and they mark up the price to us because most times we dont know the main source… imagine trying to buy your food item by item from every source just to get the cheapest price that would take way to much time… so alot of investors are ok with buying from us because it saves them the time and hassle chasing down every seller to negotiate a low price because we still give them the properties where their numbers work for them we just come in even lower than that number and make the spread from that number… hope that makes sense :beer