Thread: Anyone wholesale real estate?

I'm getting my feet wet with real estate investing...

I'm 22, have big goals, determination, people skills, and no money...
...so I'm doing like a lot of people and getting started with wholesaling properties. (Finding killer deals, getting them under contract, and either flipping the contract to another investor for a fee or doing a double closing using transactional funding / hard money)

I've been working at it for a few months, I left my previous job because it was getting to the point where it had a SEVERE negative impact on my life and I'm fortunate enough to be in a position where I "don't have far to fall" (live with my parents, virtually no bills other than car insurance, etc.)

I've been working on my marketing mainly after spending most of the month of December and part of January studying and learning as much as I could and starting to build my network through several of the local REIA's.

Unfortunately due to 2 rather expensive and unexpected circumstances (popped the engine in my Caddy due to the dealership's incompetence, so $$$$$$$$ there. Then helped a friend get back on his feet and get his life back on track, $$$$$... DOH!) I'm kinda "tight" financially right now (aka almost BROKE).

Spent most of the money I had left on a yellow letter direct mail campaign to absentee owners with >40% equity who have owned for more than 10 years and have started getting calls over the last few days, as I mail out the last few bunches of letters (475 total in the zip codes I'm targeting... hey, I could only afford that many anyway, so we'll see what happens!)
Most of the calls I've been getting have either been

• Tire Kickers - just curious why I sent them a letter
• Whack-job landlords who think their property is worth its weight in gold
• People who kinda want to sell but aren't sure yet

I've tried bandit signs a few times and made an offer on one lead I got from them, and referred a short sale lead to a friend of mine... and received several calls from code enforcement from several towns

SOON! Gonna get a property under contract soon, I've got cash buyers pestering me to find them deals... I'm confident that this will pay off and I'll be out of this uncomfortable (broke) situation soon enough!

Anyone else wholesale houses?

I think more money is made selling "wholesaling" courses than actually made by people wholesaling! Its a tough way to make a living. I know a few wholesaling guys that do well for themselves, but they are few and far between.

I would suggest getting your RE agent license. At least this way, you can legally list/broker property on deals you can't tie up yourself. You can still do investments as a principal but having your license gives you a lot more flexibility.

Regarding getting deals, I'd highly suggest driving your targeted zips and finding properties that look like rehab candidates (if that's your play), knocking on the door, and talking to the owner directly. Its 100x more effective than sending someone a postcard with some generic message that 99% of people just throw in the trash. If they are getting your postcard, they are probably getting them from other investors as well.

I met a guy that drove every street in his 'farm area' and just made a list of every dilapidated property he could find. He would routinely make personal contact with the owners, expressing his interest in the property. Guess who they called when they had a thought of selling? Bingo. Guy has made a mint for himself.

Around here it seems like there's a TON of "wholesalers" who aren't doing much of anything, but I also know a couple of guys who are doing very well with it... and funny you mention the RE license, I'm gonna be working with one of the guys who's had great success with wholesaling in another part of his business, and I'll be taking the 24hr weekend course next weekend probably (for my RE License).

I've been marketing with yellow letters (yellow legal paper with "handwritten" and "personalized" text) and been getting a pretty good response. I had mailed to the owners of houses I drove by and looked like they needed work a couple of times and got a few calls, but nothing ever became of those leads.

It'll be an interesting and exciting process, but I'm gonna make it work!
My goal is to wholesale my way to the point where I've got some $$$ and a little bit of experience and then I'd like to partner on some rehabs, learn more about that sort of stuff, and build an investing business where I can utilize a handful of exit strategies and systematize it to the point where I can be less involved.

I say to get your RE license and take as many concurrent education courses as possible. Wholesaling is a great idea and has great potential, but you are basically doing what any good RREA (registered real estate agent) can and does. If you have buyers and sellers, why not match up a deal instead of being a middle man, you can represent both parties in a dual agency. I think you are headed in the right direction though.

Once you get enough experience under your belt, start doing seminars for other people just like you. But hopefully by that point, you will be a success story. Best of luck!

Originally Posted by CityConnection

I say to get your RE license and take as many concurrent education courses as possible. Wholesaling is a great idea and has great potential, but you are basically doing what any good RREA (registered real estate agent) can and does. If you have buyers and sellers, why not match up a deal instead of being a middle man, you can represent both parties in a dual agency. I think you are headed in the right direction though.

Once you get enough experience under your belt, start doing seminars for other people just like you. But hopefully by that point, you will be a success story. Best of luck!

Thanks man!

This new opportunity that's been presented to me (with me getting my r.e. license) is going to be a HUGE opportunity for me to be able to act as an agent and earn 100% commission on a lot of deals, and I'll be able to wholesale houses in addition, so it'll really be a matter of me having 2 potential ways to cash in on a deal.

I'm so happy that I decided to go with my instincts and give real estate a try... though I'm just starting out, I feel like I'm in the right place... I enjoy learning about it, it doesn't feel like "work" to me, and I know that there's unlimited potential for me to take it to whatever level I want.

If you can make it through this market and make money, I'm sure you'll have the drive to make it through any economy situation.

Also, someone else asked about getting a R.E. license and I told that person and I will tell you too... go interview brokers. They are NOT interviewing you, you ARE interviewing them. All brokers will want you to join their team because they will collect monthly dues from you. Even if you are unsuccessful, they will still gather money from you.

Go and ask them:
What can you do for me?
Why should I join your team?
What kind of support do you have?
Do you have an office manager readily available 24/7? A lot of deals take place at night.
What do my office fees include?
How much is an office within our office?
Are supplies included in my fees?
Do I have to pay for faxes sent to and from the office?
How long is my contract?
What do I have to be able to leave the brokerage?
....
The list is never ending.

But keep in mind, paying a bit more in office fees may be worth it if they have a great office support. An office manager with experience is a great asset to have on your team. If you can call your broker of record by first name and call him/her 24/7 that is a great asset as well. Do as much research as possible before committing to a brokerage. my 2 cents

This situation is kinda different than a traditional brokerage. I'll post more info later on once I start, but pretty much this will be working exclusively with short sales for one investor. No monthly fees, 100% commission (As this investor/broker is making money off of the deals themselves, not buying and selling them), my office = my computer

I don't plan on pursuing a career as a traditional real estate agent, my goals are investment properties only. Whether it's short sales through this deal, wholesale deals I do on my own, rehabs eventually... lease options... eventually I'll buy some cashflow properties...

Originally Posted by speedingpenguin

This situation is kinda different than a traditional brokerage. I'll post more info later on once I start, but pretty much this will be working exclusively with short sales for one investor. No monthly fees, 100% commission (As this investor/broker is making money off of the deals themselves, not buying and selling them), my office = my computer

I don't plan on pursuing a career as a traditional real estate agent, my goals are investment properties only. Whether it's short sales through this deal, wholesale deals I do on my own, rehabs eventually... lease options... eventually I'll buy some cashflow properties...

If you plan on closing your own deals without a brokerage, you will have to become a broker. With that brokers license, you'll have to setup your own company and become a broker-of-record.

Originally Posted by CityConnection

If you plan on closing your own deals without a brokerage, you will have to become a broker. With that brokers license, you'll have to setup your own company and become a broker-of-record.

Not if he takes his piece as equity. He and his principal investor can form an LLC, and allocate a priority return of XX% to the other member and then a kicker or split after that. If you are acting as a principal, no license required.

Originally Posted by DialM

Not if he takes his piece as equity. He and his principal investor can form an LLC, and allocate a priority return of XX% to the other member and then a kicker or split after that. If you are acting as a principal, no license required.

But he has to disclose that he is a registered real estate agent to the seller or any other party. Also, I don't know about your state but I'm sure there are rules about this in your Real Estate Brokers Act. Just food for thought.