I have been reading up on wholesale for a few years and decided to take my furst step, lunge, into that world. First day atheI secured a buyer from East Hampton, NY, my home town. I have a good idea how to proceed, but overwhelmed by the instant good fortune. Any advice on what to do next? AVR? Tax rates. Anything?
I think you would do yourself a favor by reading all the posts by Randoskie on this forum.
Here’s a link:
http://www.reiclub.com/forums/index.php?action=profile;u=51398;sa=showPosts
One of my favorite things is to help a newbie do their first deal, but, most noobs quit after the first or second road bump.
I try to think what has made me half way successful, is it blind luck? Nah, it was good old fashioned desperation, a good dose of that and throw in some persistence and the attitude, and then you got that no other option thing going on with hungry kids, and wala, your wholesaling houses.
My advice and I’m no where as educated as these folks is learn Craigslist and how to negotiate. One will bring the money the other will get you paid. I swear I see half of the so called wholesale deals are complete junk. Looking at it as a investor I would never buy the crap there trying to sale because it’s way over priced. Also if you’re down on your luck find ghetto homes. Investors love those suckers because they can rent them out and get section 8 cash. Not sure what your buyer needs but I’m sure everyone here will give you some good advice.
The #1 key to having a successful wholesaling business is lead flow. You have to build a number of silos that are consistently producing leads, online marketing, direct mail, fsbo, vacants/driving for dollars, etc. Starting out, choose and focus on 1 lead source, stick with it, get good at talking to sellers and estimating repair costs, do some deals…then add other sources of leads. Depending on what kind of budget you have, I’d start with direct mail. If you don’t have the capital to start a large scale direct mail campaign, find vacant homes, drive for dollars and send letters to those that you find.
Idk if mail is the best for starting out because of cost. You could start a mailing campaign only to find out your criteria is just not working and that’s $1000 down the drain. Or you could be super successful and get overloaded by the calls. Not to mention you need to mail follow ups regularly. Not saying it’s a bad idea it’s just more complicated. I like the two B’s in starting out. That’s bandits and bird dogs. Find the low hanging fruit and then work on the more complex avenues.
I agree. Unless you’re working with a quality list, direct mail can be an expensive mistake. Also, assuming the list is good, DM is not a one-off deal, if you want reliable results. Also, the ad copy on most postcards I’ve ever reviewed sucked drain water. As in, increased seller resistance, and/or did not communicate a compelling reason to respond.
I’ve discovered that ugly, more or less organic, grandma with poor taste and vision type of postcard gets a higher-quality response, than slick, four-color cards with pictures of the smiling investor standing in front of a McMansion trying to pretend he’s a real estate agent. Just saying.
Some questions to answer before sending DM:
- What price point am I focusing on? Why is that important?
- Where do the sellers live? Why is that important?
- What is my primary offer? Cash? A closing? Debt relief? Why is that important?
- What do I offer that creates urgency in the seller?
- Why am I trying to fruitlessly convert unmotivated sellers into a motivated ones …with a postcard? Why is that stupid?
- What age of house am I looking for?
- What equity amount am I looking for?
- Am I going to blow all my profits on hookers and booze, or reinvest in more marketing? Why is that important? If this is hard to answer, I suggest checking into either/both alcohol and sex rehab clinics.
That’s all I got.
I will add this and it’s my own opinion and not a tested one. How many rehab guys, court house steps guy’s, and MLS investors are now using direct mail. Inventory is low and I imagine yellow letter dot com is seeing record profits. You probably have the same mail piece flowing in 3 or 4 times a month to out of state owners. Talk about annoying. I work in a tier system where I focus on about 200 to 400 homes but extremely well focused not we buy houses fast red ink crap. Also someone with 30% equity on a home last sold 10-15 years ago reacts differenty than some who has a house with 100% equity and was last sold 10 years ago. Both make money and both can be motivated but definitely different approach if you want it to be. Knowing who to follow up on too is crucial unless you have a huge budget.
Don’t rule out online marketing, even if you’re starting out. You can get up a relatively decent SEO site in short order. The cost isn’t prohibitive if you use a service along the lines of InvestorCarrot or Lead Propeller. Probably can keep the cost around one “larger” direct-mail mailing. It is a time sink though, but on a budget, you have time and not money - so it can work if you are willing to grind and learn about SEO ranking.
SEO and websites are a bigger curve than direct mail. It’s a avenue but a time consuming one. I wouldn’t suggest it for a first timer unless you know html.
What are some of the best site to find motive seller?
Like to build? It would be a simple squeeze page with aweber. You also need either heavy content rich web page or a Google keyword campaign with a reasonable budget.
I made an offer on a house built in 1924 serious fixer today in a nearby town thru a realtor, I had to fill out the long purchase contract, but it was fast and painless with DocuSign. And I had to provide proof of funds, but hell that was easy to get online.
It takes some balls to put these deals together, with no money or credit, the realtor don’t know I don’t have a dime & I’m wholesaling it to a rehab investor and that I’m only the bottom feeding wholesaler.
I had to specify the title company that does assignments.
Doing this was really scary at first, now it’s a fun game with potential financial rewards.
The realtor emailed today that this is a divorce situation and the husband is in Mexico and due back by Feb.
The seller on a deal I have in escrow now asked if there wud be anymore problems, I said haha, there always is.