Let’s be honest. No one gets into the wholesale real estate business because it makes for a great hobby. No, it’s the thrill of the hunt and the fact that wholesaling can be very lucrative. In fact, both newcomers and veterans to the real estate industry can benefit from the short sale term, collecting an average of 5 to 10 percent finder’s fee per deal that’s closed (and who wouldn’t love that?). But how do you make sure you’re getting the most out of your wholesale real estate experience? We can answer that for you.
Below, explore a few tips for being successful at the wholesale business.
Get Creative with Lead Gathering
Sometimes the most successful wholesalers are the ones who think outside of the box. Don’t just limit yourself to standard lead generating strategies like direct mail and billboards for leads. Instead, get creative in where you search for them. Turn your attention to places like Facebook, Craigslist, banks, and local attorneys who specialize in family or bankruptcy law. Using creativity will help you generate the most revenue for your wholesale business. Searching for leads outside of the typical efforts can lead you to get a leg up on gems that other wholesalers aren’t aware of.
It’s wise to keep in mind that wholesale real estate isn’t a get rich quick scheme. It requires a lot of time and patience to make a profit. In some cases, you won’t strike it rich on your first attempt; sometimes, it takes a few wholesale offers — or 100 before you get that huge deal. Consistency in your efforts is vital. Consistency also goes hand-in-hand with the reality that there will be months where you only have a few deals. Some months you may have no bites at all. But don’t get discouraged! It’s just the nature of the beast. The best way to combat this struggle is to have a pipeline of deals in the works consistently, but still getting into the rhythm of this takes time.
Another strategy that requires consistency is picking a few lead-gathering methods and sticking with them. We suggest having two or three and monitoring their success. If an outlet isn’t immediately successful, that’s ok. Fish don’t always take the bait as soon as you put it in the water. However, if it’s been months and you haven’t gotten any nibbles, try switching out one of your outlets at a time.
The reason for this is, it’s easier to gauge what might have sparked success with one change, versus when you change more than one thing at a time. And be prepared to hear “no” a lot. It can have you questioning if wholesale real estate is the business venture for you. If you’re serious about wholesale work for you, consistency is crucial, even in the face of no.
Remember to Network
Networking has many benefits. It can help make sure your properties have buyers and increase your revenue, but they can help you find valuable leads to contract out. For the best networking experience, join a Real Estate Investor (REI) Association and attend the meetup events they host (and if there isn’t an REI association in your area, take the initiative and start one for yourself). If you’re looking for a way to be successful in wholesale real estate, start here.
Become a Master of the Deal
In the eagerness to close deals, some wholesalers forget about the behind the scene details of the sales they make and how it can help them with their next property. Sometimes money is in the paperwork. As you make offers and close deals, you’ll start to build a portfolio of different types of transactions and buyers that come your way during your real estate career, such as REO/short sales or pretend buyers.
Your greatest asset is to gather that experience and use it as a resource to build your business. Don’t just become a master of selling properties, use that knowledge to become a master of negotiation, fostering relationships with contractors and other investors, and then use it to your advantage.
Have the Right Mentality
Like with every new challenge, having the right mindset is the key to success. And wholesale real estate is no different. You have to have the mentality of doing what it takes to make it work. Having the right attitude means being willing to dedicate the necessary time and effort to be successful. As mentioned before, wholesale real estate is not an overnight success.
To help get you in the mindset of real estate, be sure to learn as much as you can about the industry and your market. Know what you do and don’t have the time for when it comes to the wholesale process. If needed, enlist companies like Call Motivated Sellers, who can take on the job of cold calling your collection of motivated sellers and finding you quality leads.
Have a Backup Plan
It’s inevitable. Sometimes deals fall through. And the reasons range by the many, from inspection issues and owners not being able to sell their homes, to not being able to find a buyer or potential buyers getting rejected for the mortgage. You name it, it happens. If a deal goes south, you don’t want to lose money on the property.
To protect yourself as the wholesaler, we suggest having a backup plan. Consult a real estate attorney to ensure your contract has an out before entering a contract with a seller. As a best practice, we recommend having potential buyers already lined up before you even make the initial offer to the seller. This way, you can gauge interest, and you increase your chances of finding a buyer when the time is right.
Are you looking for ways to find success in the wholesale real estate industry? If so, let our team at Call Motivated Sellers help you find the best-motivated sellers out there. Contact us to learn more about our services.