Reasons Why Wholesalers Fail - What not to do

Bird Dogs, Wholesaling
1

This is a post from my personal experience in seeing why wholesalers have not done well in our market .

  1. Wrong ARV’s - know how to comp and be conservative not aggressive

  2. Not enough buyers - You might have a great deal, but no one to move it to

  3. Lack of consistent marketing - I put up 3 bandit signs today and sent out 20 mailers - I didnt get any calls. hmmmm NO KIDDING

  4. Repair numbers are wrong - As soon as someone tells me a house only needs $5,000 in repairs, I tell them I havent seen the property but I know thats incorrect.

  5. Lack of expertise - So I have a great deal, but it hasnt been probated, it has 10k in back taxes and a judgement from Sears for 2k. Do you know what to do?

  6. Bad title company - If your title company doesnt know what a wholesale deal or double closing is, dont use them

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These are the major ones that I have seen

2

Hi,

Lack of financing options or resources available!

      GR
3

I think wholesalers biggest failures is not making enough offers. The second biggest mistake a wholesaler makes is they don’t follow up on the offers they make. If you did at least 5 offers a day and made 5 follow up calls a day you’d be putting houses under contract.

4

Good call guys. I missed some obvious ones

5

I thought people would have more interest in this thread, but maybe not. I won’t post in it any longer unless people are interested.

6

I think its good information. I haven’t done any deals as I’m just now trying to get involved in real estate investing and this information is very helpful so I can avoid similar mistakes. I think the ARV and repair costs are hard to estimate for new investors. We don’t know what we’re doing. :slight_smile:

7

ARV’s - Get MLS access - It is an art not a science
Repairs - Create a simple checklist and if you dont know if it needs replaced, assume it does

I can shoot you our checklist if you PM me.

8

You are so right. Marketing is the life’s blood to wholesaling. Whether it comes down to finding motivated sellers or even investor buyers. Marketing, Marketing and more Marketing!!! Wholesaling is a business, and businesses live or die depending on the level of marketing. I know a wholesaler who is apart of my REIA. He’s a marketing machine. He has the web 2.0 thing going, he has his direct mail campaigns automated, he also has does bandit sign marketing. He has a buyers list of over 300 active investor buyers. He’s a wholesaling whale. I asked him point blank what is his secret is. He told me flat out “If I don’t have a marketing plan I don’t have a business”. I’m developing a marketing machine. That machine will have

Direct Mail Marketing
Web 2.0 internet marketing.
Guerrilla Marketing
Print ad Marketing

I will keep it constantly running.

9

That guy at your REI is correct. 100%

10

Good info here guys!! thanks!!.. Wholesaling real estate still is a hidden niche here in the Philippines… hmm… not that hidden but there are only few doing it… cause people here are after cashflow so they just do Rent to own…
but for me… Wholesaling can be the best option … ahm. I’m just 16 yrs old and I want to be the largest wholesaler in the Philippines by 20…

11

Good goal. Two things I wish I had done at your age. Learned to play the market correctly and wholesale. Juijitsu as well. Either way, keep it up and if you stay focused you’ll retire before 30

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Also, being that you are 16, you will want to be very knowledgable in what you are doing. You will want to show people that you can walk the walk so they look beyond your age. If you know what you are doing, it wont make a difference that you are young. Good investors that buy a lot wont care either way, but the middle of the road guys will

13

Something else that I thought of which is a bit more internal than the others. Lack of self discipline. Make a plan and stick to it. If you say you are going to call 30 motivated sellers and make 5 offers every day, DO IT.

14

Can anyonet tell how wholesale and inflation, downturn corelated? How’s the long term, short term impact in the market?

15

Nick Brian,

Inflation doesn’t matter… when you wholesale you own the home for a very short amount of time (or zero time).

Even with Obamaflation… it won’t affect your deal. Over time the houses you wholesale will gradually increase in value (or possibly plummet as we’ve seen). However, you are not concerned with inflation (or deflation) over the hours or days you own the property. Your concern is if its a deal today. If it is, go for it. Get in, get out, cash check.

16

Correct in the above post. If inflation was a concern for us in a wholesale deal, that deal would be the least of the problems.

17

Another one I forgot

Paralyses Analyses - Do not spend hours and hours on one home trying to decide on the offer amount when you could be making other offers. This game is all about making as many offers as possible. Some you will get and most you wont. Don’t get hung up on 1 property.

18

Hey,
John good video man…
5stars.

19

well i guess you r right in that wholesale is only one strategy in Real Estate which means yoou can not depend on it for every deal. but in my opinion in every field there are the good and the excellent. i guess just how much energy are you willing to put in is what makes the difference.

things that make wholesale is an excellent strategy are:

  1. quick cash for beginners
  2. once you do few transactions your self confidence boost
  3. it teaches you some skills such as negotiation, team building, the importance of wholesale prices as an investor, building an investor database. etc
  4. ther are always investors who want to rehab. so you will be able to make money any way just be realistic with the assignment fee.

thanx for sharing your insights,

20

I definitely appreciate this thread and I’m new to real estate and I seriously need a mentor. It’s not as easy as the “gurus” make it appear…