Ok I’ve done a deal or three now and almost EVERY time the end buyer asks this question. I’ve also noticed on a few forums/articles similar things stating that if I can wholesale it I should keep it myself and turn it into a short sale.
:help Huh? If I had the money for the short sale I would but I don’t and thought that wholesaling was helping me save for the day I could start my own short sales. What am I missing? Is there some magic short sale money that I can tap into but no one wants to tell me?
The magic short sale money is raising private money yourself. That’s the difference between you and every other investor out there. They either get private money or hard money and do the deal and make all the money. But your right, you can’t do all the deals because you need these wholesale deals so your business won’t have cash flow problems. I would tell the investors you can’t do them all. That’s all. And it’s true. Pay days are unpredictable with regular flip deals and wholesale deals always save the day especially if there isn’t other money coming in.
I think you’re missing the concept of where money comes from… Very few investors use their own money… Once you understand how to buy using “No money down” which isn’t Zero money then you’ll stop wholesaling.
I understand the ‘use other people’s money’ concept but my problem is, how do i convince others that I am able to do what I say I’ll do since I still have ‘that new guy’ title? And where would I find anyone to even ask other than REIA meetings which only occur once a month here?
Places to find money…REIA meetings…take an investor out to lunch…use and look on craigslist…find the cash deals sold on the MLS and go visit those houses…ask friends…ask your dentist…ask your lawyer…ask your title company…ask your cpa…open up lines of credit…get credit cards (I’ve bought houses with CC’s before)…get a HELOC on your personal residence…let the whole world know your looking for money and the word will spread.
I also disagree with Michael. I’ve been doing this for 5 years and started out wholesaling and still do it today. Its a great compliment to our rehab business. I have 2 wholesale deals closing this week netting me 13K. One property I haven’t been inside of and the other I’ve been inside once. I think I have a grand total of 2 hours into these deals. Damn good hourly wage :beer
Nate-WI
Good call Gordo…
I spent years ‘not wholesaling’ and was doing just fine! Then I went to a seminar and the speaker asked to see hands raised of those who do not wholesale…more than half (including me) raised their hands. He went on to say that before he began wholesaling, he made a certain amount of money and now his wholesaling business was 80% of his income.
At that time, I was averaging $200k/year ‘flipping houses’ without wholesaling ‘in my bag.’ I started to think, if the percentages were the same for me, I am missing $800k/year additional potential! So, I started wholesaling. I experienced a huge increase.
If anyone asks me why I’m wholesaling, I just speak the truth…to make a quick profit and leave something on the table for the next guy.
Rob
RE Investor/Mentor
Rob in Atlanta and gordo2417
Good to meet you…
I agree that wholesaling can make you extra money… However the key word there is EXTRA… Investors should learn how to make buying and selling their main business model and when and if they want they can wholesale for extra cash.
I would imagine that if either of you only had a single deal to do you would not sell the deal short… You would take it all the way so you could make a bucket load rather than a thimble… New investors shouldn’t sell their deals short in the beginning, they should learn how to do them…
As for being a new investor… Stop thinking that way and certainly stop saying those words… If you lack the confidence in what you do then most definitely you will fail… This game is like any other… it’s 10% of what you know and 90% of what you do with it.
Go kill a house.
Michael
Am I missing something here? “If you can wholesale it yourself why not keep it and do a shortsale”
Maybe I’ve gone loco, but how and the heck are you wholesaling a homes that need a short sale to be done on them, WITHOUT getting the short sale done first?
I’m sure I’m missing part of your question…I hope.
Wholesaling is all about cash generation. It’s great to be able to buy houses no money down, but you still need money for closing costs, repairs and reserves. So many investors got burned by buying dolled up houses in great neighborhood at near full price that couldn’t cash flow for nothing. As soon as that first repair came up, they were screwed because they scrapped for cash. Equity means nothing, cash is everything. I strictly wholesale, but when I do decide to get into buying, you can bet there will be no way in hell I will be giving up wholesaling as a cash generating exit strategy.
haha sorry. still gettin afixed to all the REI ‘lingo’. I meant fix n flip, not short sale lol
Also, Eric you are awesome! haha I read all the emails u send me from your email list and they’re all hilariously insightful
CTREIA sends out a Deals email every Friday - perhaps you can have your REIA do the same thing - that way you can build your buyers list. The 'new guy" title - everyone has to start someplace. Just be straight up about your knowledge and your numbers. Leave enough money on the table for the next person. And you will build your reputation quickly.