When the economy takes a dive, how does this affect wholesaling?
If people lose their jobs, then wouldn’t more people be looking to sell their houses?
Could a recession actually HELP the wholesaling business?
I plan to be doing this for the next several decades, so I’m bound to hit a recession at some point.
Interested to see what the long timers say. My theory is it will always work, the prices cash buyers will buy at probably changes. I’ve read that after every real estate decline the years after the decline normally see gains above previous market prices. I know that’s certainly true for this last bubble.
I lived in Silicon Valley from 2006-2006, things changed dramatically in those two years. I remember almost buying a house for my family in 2006, it was a 3/2 in a nice area. Price was $550,000. That house went from $550K to $350K in a matter of months. Today that house is worth $900K plus. It’s absolutely ridiculous.
Sub2 would’ve been a good option for people during this time.
Sub2 would have been a GREAT option at that time. :beer
I’m def not an expert on the economy, but this still looks like a recession to me. My city is looking like a ghetto in many middle class areas, the graffiti, the homeless, the meth addicts riding bikes and scoping the neighborhoods, I got my water hose stolen out of my front yard a few weeks ago. When I looked up my security camera footage it was 4:30 AM, a fat old white guy with bushy grey hair, walked off with it while coiling it around his arms while heading down the road.
What the heck will he do with a 10 year old water hose that’s worth 5 buks on a good day?
We have serious unemployment, you dont see new construction much anymore. So many vacant homes, even many businesses are vacant. And we’ve been in a horrible drought for over 5 years, most lawns are dead…
But besides all that, things are great.
Perfect climate for Wholesaling.
Let’s make some Money…
Rando
A recession proof business?
Couldn’t get any better.
I had to laugh at myself, because I thought your post was a rant from Redstar. Then I got to the end!
LOL
I was going to say that you described the perfect opportunity. Some see an empty glass. Others see a glass ready to be filled.
I’m past the days of ranting. My amateur printer will be done Sunday and my list will be out Monday.
I’m waiting to hear back from a printshop about their prices on postcards versus letters to see what is my best option for the future.
I think it’s certainly regional, but overall I think we’re in trouble. The economy is addicted to cheap/free money via the printing press. It can’t last forever.
Here in central Iowa the economy is booming. The tech, medical, and construction fields are doing very well. We have a governor that implemented some very business friendly policies.
He was governor until sometime in the 90’s. He left, the economy and debt in this state took a turn for the worse. He ran again in 2011 and since he’s been back the debt is gone and our economy is going bonkers.
Rando,
You’ve mentioned that you’ve gone months with no deals.
Do you think that’s because you’ve only sent out 2 mailings this year?
I plan to send out 12 mailings per year.
Last year and this year I’ve done really well. And even the first 2 years I made more money than I did doing construction. I think it was the second year I had a couple of big deals go south. Both were old ladies that changed their minds about selling. I believe it was because Realtors had told them they cud get a lot more for their houses. It didnt matter that I had a legal purchase contract on their properties.
It had been 4-5 months with no deals and I was seriously counting on these deals.
But I got angry and got busy and the next month I closed on 3 deals and realized I averaged 5 Grand a month even while stressing and whining.
And last year I didnt do any marketing cept for bandit signs, using bird dogs and advertising for free on Craigs list and did a few deals with other wholesalers.
I’m embarrassed to say I only do this business half ass. If I got serious it wud be game over… Iam really kind of lazy, I like to ride the Harley, go hiking, fly my plane, gardening, shooting my guns, and just screw around. I do feel guilty.
I got a couple of big deals going down next month, I dont stress much anymore.
Things cud change & I worry a little, so I keep a good balance in my bank account.
Lets make some Money…
I’ve been told by other wholesalers that they get the majority of their deals from direct mail, so that’s where I will concentrate my efforts.
Direct mail will bankrupt you, if you don’t know how to sell and negotiate. It’s important to get in front of, or on the phone with, as many prospects as you can, in order to practice making offers, negotiating, overcoming objections, and otherwise disqualifying suspects that will waste your time.
I remember a guy telling me a while back that he doesn’t have enough prospects calling him, to worry about his time being wasted. I told him, that if he continues working over unmotivated sellers, and fails to disqualify them as prospects, he’ll either burn himself out, or frustrate himself, or simply fail to negotiate deals that are worth closing on.
I mean, if a seller tells me he’s not motivated to sell, or is firm on his price, I believe him, and get out of Dodge.
I know others who claim that these kinds of “no” responses are just a disguised, or delayed, “yes.” Uh, no means no.
That doesn’t mean you can’t plant doubt and misery into the mind of the seller, by reminding him that he can get his price if he waits enough years. Or, if he invests fifty thousand dollars dollars in his hell hole first, then he might get what he’s asking.
Meantime, don’t be afraid to treat the early direct mail respondents as guinea pigs, and use your conversations and feedback to develop a script that meets and overcomes the guinea pig’s objections. This way, you can maintain better control of your negotiations, and recognize patterns in sellers, that give you a clue which direction to go in your negotiations, and when to close.
Otherwise, shooting from the hip, puts you on your heels every time a seller says something you don’t expect, or objects to something you don’t know how to respond to.
I think of direct mail as gambling. You never know if you will make a profit or go down in flames.
But getting an education in people skills which include negotiations, and listening can make a huge difference.
But I don’t stop there, I am also a student of
learning other skills like body language. I can tell you a lot about you just by watching you walk. The posture, the speed of your gait, the expression on your face. Then the tone of your voice, eye contact, firm hand shake.
We all have the ability to make almost instant evaluations when meeting people.
It is seriously advantageous to walk in with confidence and some skills. Time to upgrade your game humans.
I thought you said you doubled or tripled your investment every time
Not the first time, I lost 2 Grand, I didn’t have the skills needed, I didn’t know how to evaluate a deal, I didn’t know how to negotiate, I didn’t know jack, I just jumped in all gung ho, with out thinking, thought it was going to be easy.
Does it remind you of anybody you know?
That’s okay. There’s nothing wrong with a learning curve as long as you learn from it.
I’m just fearing the scenario of not getting any calls.