I like to remind investors of this about once a year.
Why does wholesaling stink? Let me answer that for you.
Getting enough motivated leads to call you is hard.
You know this right? Marketing, calling, driving, even going through software, etc., it’s not easy to get motivated leads on the phone with you, and it’s expensive.
Then to have one of those leads become a deal with equity takes skilled work negotiation.
THEN, getting enough deals to have one with EVEN MORE equity to get paid a fee and leave enough room for your investor buyer is even HARDER work.
In my 17 years of investing experience, I’ve realized getting leads and making the deal requires the MOST skill to achieve. So I’ve never understood why so many trainers want people to expect quick checks.
How is it you’re a newbie and somehow you’re going to get leads coming in and evaluate them correctly when that’s the hardest part for most people?
While I don’t want to sound like a pessimist, I think they do it because they know someone will buy a program claiming a perceived quick check. Or they just want to train bird dogs to partner.
The problem is nothing about wholesaling is quick because it NORMALLY takes a long time to get a “deal” under contract.
The claim is that the funding and rehabbing pieces of the puzzle are too hard, so don’t worry about that now, just sell the deal off and get “quick” money.
Granted, it’s quicker than rehabbing and retailing, but the right partner in a fat deal can let you borrow a few cash out dollars anyway, AND you keep the amazing PROFITS and TAX BENEFITS RE provides.
Basically you get to MAKE more and KEEP more of it.
Who doesn’t want that?
I’ve found that any lender will fund a good deal, you can hire the contractors, and you can hire the agents to sell, those parts are pretty easy. But getting that good deal signed up in the first place is really where the investor has to be skilled to make money.
As a result of this, many assume wholesaling is the easiest way to get a check, and when they find it NOT so easy, or “quick” they get discouraged and quit.
Let me affirm it’s not that you’re doing badly, the problem is you were given unrealistic expectations.
You do need to start with lead flow, the best cheapest lead flow you can find, then get a deal, then simply get help in getting the deal fixed and sold or rented.
I’m a passive income guy so I want you to keep a lot more than you sell, but most people just need help resetting expectations so they can keep moving forward and become successful, consistent investors.
Getting deals is hard, so we only wholesale occasionally because we like to work once finding a deal and get paid on it forever.
So does it seem obvious why wholesaling shouldn’t be a primary strategy now?
It’s pretty simple, you do the hardest part of the work for the least amount of money.
I’ve found the best lead flow is tax sales, so please consider a focus on that, and you’ll be buying at the cheapest level possible, making it lower risk to you, especially those starting out.
We have training on that river of lead flow called iDeal. If you’re interested, let us know.
Good suggestion, I wonder who wrote this article.
Kevin I wrote the article!
Corey
But you need $$ to buy tax sales and in wholesaling you need just a small EMD. If you don’t have $$ to buy the tax liens, wholesaling is a good option even though it may take some time to get it to work.
Hi Deborah,
Thanks for feedback.
My point is that if you did the hard work of finding a deal with sufficient equity, don’t throw away all that profit. Get a lender or get a partner and make the real money.
how competitive does it get at the tax sales auction? Are we bidding against some pros with abundant cash?
Hi, it totally depends on what your goals are. When we are bidding on houses we hope to acquire, ie vacant and needs work, we don’t compete against hedge fund capital who are bidding on houses that are occupied and nice. The only competition is from others bidding on the same property or owner conditions you are, and we find we don’t have much from those who want to own the real estate vs those who are looking to earn an interest rate.