Your Introduction into Wholesaling Real Estate
Is wholesaling real estate something you’re interested in or currently conducting?
…And how did you develop your skills so you are most beneficial to your customers?
Take a journey with us today to see how, where, why and when I began my wholesaling ventures as a real estate investor.
Also, we will review a few key tips in becoming great!
Wholesaling has really taken storm since this “information age” era, courtesy of YouTube.
With the easy access to information, many people are self educating through videos.
While I would recommend this, I also recommend you learn from a valid source.
With the abundance of accessible information, make sure you are reviewing data from multiple sources to confirm congruency.
When there is a variance, find out why.
Consider yourself fortunate to have this very convenient option, but reading is still a recommended method to retain information in my opinion. I like having something I can hold and refer to when needed as a resource guide.
Balance reading and a saved video playlist on your YouTube login, and you could have some great resources to refer to.
Regardless of how you are learning, kudos to you for setting goals and taking initiative.
My Intro Into Wholesaling
To be honest, I did not know what “the popular form” of wholesaling was until about 2018.
To me, wholesaling was the ability to get a product at a wholesale price and to resale it at a profit, to a consumer.
The method in how you gained the product doesn’t matter as long as the price was parallel to a wholesale price.
This still stands true. However the “popular form” of wholesaling houses was still unknown to me.
If you’ve read any of my blogs thus far, you’d know that my first investing strategies were stocks and tax liens and tax deeds. Was I buying real estate at a wholesale price by way of tax deeds?
Of course I was. But what I later found out, was my idea of reselling properties as a wholesale deal to another investor, was coined whole-tailing and not wholesaling.
After-all, I was selling these properties at a discount on the MLS.
Therefore, the price was between a wholesale and retail price. Thus the term whole-tailing. I was actually whole-tailing and not wholesaling.
I had heard about these no money down tactics to real estate investing, but I thought the coaches of these programs were directing people to apply for credit to gain access to the funds – that would enable them to acquire real estate.
Their exit strategy would have to be precise and calculated so they didn’t incur a loss and could move through the acquisition and exit strategy of their investment swiftly.
This was my perception of the no money down concepts of investing. While true, I was still missing “the popular form” of wholesaling.
Yes, I had heard of people moving hundreds of deals per year, but honestly I thought they were just blowing smoke.
“Another lying investor trying to bait you with a fabricated story of how great they are, and why you should join their program…” I thought. “Ain’t nobody doing hundreds of deals in a year. Please…” I said.
Well, learning what “the popular form” of wholesaling really was, I had my “aha moment”!
Here are the wholesaling steps (in brief) that I learned…
Step-by-Step Process to Wholesaling Real Estate
- Build your buyers list.
- Market to motivated sellers.
- Build rapport with motivated sellers once contact and service is initiated.
- Get property under agreement.
- Market your assignable agreement to your buyers list.
- Close the deal.
“Wow…” I thought. This is what was meant by the term “wholesaling” all this time!
I do want to mention, that whether your intention is to wholesale or not, being capable to conduct this strategy makes you way more nimble than those who cannot wholesale.
Wholesaling takes education and resources.
Most, if not all legal documents are assignable just as a rule of thumb. It would not make sense for an agreement (or contract) to be irrationally nullified when (and if) not necessary.
Many consumers expect agreements to be upheld after they’ve made any decision that involves documentation (or a contract).
What is VERY important, is that anyone performing any role or responsibility with another party, is direct and honest about their intentions.
If you can’t do this, you shouldn’t be in business.
There it was. I felt so uninformed even after all my research and reading. This never crossed my path. Or maybe people had mentioned it, meaning this strategy.
Due to the vagueness of the detail, I thought they meant, what a typical business “wholesale deal” meant in any industry.
I had missed learning about this creative strategy. My business-mind had overruled my creative-mind.
“Real estate is such a vast market with plenty of methods of making money…” I thought. This was a very captivating moment for me.
My intention from that point on was to learn all that I could about this strategy. So, I began to research.
The more I dug for information, the more I found that this strategy was merely a strategy that any investor could perform when needing to exit a deal and still uphold their expectations.
However, the ability to flex into this strategy, was the captivating trait making them more nimble.
The art of finding a deal is one in itself. The creativeness of how you can complete an acquisition by wholesaling is another art within itself.
Any investor, that doesn’t fully comprehend both arts is missing out.
Please don’t miss the point. This also means a good wholesaler will have the mindset of an investor regardless of his/her ability to wholesale.
Eventually, if within your game plan, these deals will be your own renovation projects.
With that in mind, don’t present something that would not make sense for you to do (if you were in the investor’s position). Take heed that positions and strategies do vary…
So now, let’s talk about skillset…
What is very vital is that you first understand what a real estate transaction looks like.
Although this is very elementary, when it comes to your full comprehension of how you can help someone solve a problem, it is very important in real estate.
Some of you have been through a deal and some have not. Research every step if you haven’t. It is important.
The process of going through a real estate purchase, will at least broaden your comprehension of what is entailed.
The inspection, the appraisal, the underwriting, the credit preparation, the closing costs, the down payment, the earnest money, the real estate agent, the lender, the attorney, the underwriting fees, the offer period, the paperwork, the closing, the title company, the market evaluations, the assets potential, etc.
These are all key components, in understanding not only what the customer should be prepared for, but your comprehension of these steps and why they exist.
You see, this is getting you closer to understanding your customer.
Finding motivated sellers is one part, but your business acumen when meeting with that seller is another. Both portions are very involved and have high importance.
- If you can’t find leads, you won’t have deals.
- If you can’t present yourself in a professional manner, you won’t have deals.
These concepts are a huge part of the transactional process because they involve the most important factors – PEOPLE.
And yes, that includes you! YOU are the person who YOU need to be most aware of.
Self awareness, confidence, good communication skills, good follow through, your ability to build rapport, and lastly your ability to coordinate tasks between multiple parties.
All of these interactions involve people with many characteristics.
Your ability to create positive and EFFECTIVE relationships is dependent on you.
When you meet that excellent sales person that has top skills and is fluent in helping you with a smile, that isn’t something they were born with – believe it or not.
That is an acquired skill. Coin your skills to meet or exceed the best version of yourself.
I’m not going to sugar coat this. This is the measure that either makes you great at what you do, or possibly terrible at what you do.
If you struggle with math, you need to be a good note taker, use great pictures or video, and/or have a photographic memory.
This way you can use what you captured and follow up with an offer later.
If you are not quick with numbers, or don’t have reliable software you can use in the moment, you need to follow up before making an offer.
Yes, this means you need to develop the skill to understand the costs of potential jobs.
There is nothing more frustrating than some wholesaler telling an investor the cost of the rehab is $15,000, when its actually $60,000.
There is no A, B, C level upgrade, that has that much variance. It just means you don’t know what you’re doing. Also, now your credibility is possibly lost. Your ARV, and everything else will be questioned.
Professionalism is at stake here so you need to take this serious if you are serious. False or highly inaccurate information does not grant you favor.
If you know your numbers are possibly off, be honest. Tell your investors, you are not sure, but you feel the deal is worth looking at and you would appreciate their feedback.
Another perspective of knowing your numbers is important because, you should know who you are targeting as your end-buyer. If your target selling price is too high for a flipper but ideal for a buy and hold investor, you should know that and why.
When you know who your customer is, based upon the numbers, this will also help you build an effective buyers list.
Knowing that you will need a diverse list of buyers is key.
Use our investment calculator tools to aid your comprehension of each buyer’s buying margins.
- House Flipping Calculator
- Construction Calculator
- ARV Calculator
- Rental Property Investment Calculator – Free use here.
- Cap Ex Calculator
Now you are getting closer to running a business. Understand that, when you understand your customers better, you can provide better service.
Please consider how you want to resonate with the community and your customers.
Do you want to be a “fly by night” business or do you want to have longevity?
Well, regardless you’ll have to establish trust.
Trust is the first building block to effective relationships.
Once you’ve established trust, people will at least let their guards down and communicate honestly with you.
Expressions and intent will come next. These intentions should be followed by your ability to help align a path to the end-goal for the customer.
Also, be mindful that your rapport doesn’t end at the motivated seller.
It follows to the title company, the buyer, the inspector/contractor, and anyone else involved with closing the transaction.
To be an effective communicator, you must be organized.
If you aren’t organized, you can’t stay on top of responsibilities in a timely fashion.
You will miss important moments of contact or you may completely miss an very important follow-up.
This could relate to follow-up or follow-through.
Here is where, again, you must be very self-aware by knowing your capabilities and how YOU respond when under pressure.
People are relying on you, so no time for your own faults.
Lack thereof will lead to a short lived career or a career that lacks engagement with your customers. Unsuccessful.
If you don’t understand that not everyone thinks like you, you definitely need a course in understanding people.
Within each person’s communication and learning style, you must become effective with communicating with anyone.
Your ability to be a resource to people is dependent on it.
If you can’t connect with someone, you will never have the ability to show your skillset.
Don’t let this hinder you.
Learn how people prefer their communication and be able to gauge these characteristics in the moment. Flex accordingly.
A keen eye for people skills will help you a long way.
If you follow all the tidbits in today’s article in your daily business, you will see improvements.
I wish you the best in your journey! Please continue to be positive force and aim to help others.
I applaud you faithful readers-future leaders for your devotion to greatness!
Love ya and continue to strive for progress.
Please comment if this literature was helpful for you and how.
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