Exactly How To Start a Real Estate Wholesaling Business
If I were just starting my new real estate wholesaling business, I'd start off exactly like this. This is important stuff. So, take your eyes off of American Idol for a second and pay attention.
1. Locate My City's Wholesale Buyers
Sounds pretty easy, right? Uh... not so fast, my friend. Look, a lot of things appear easy, but that doesn't mean it will be. If you truly want to know who is buying up real estate in your area, you need to be proactive. They're not exactly going to be kicking your door in. You need to go find them...
Here is what you do first. One, get yourself 100 blank, white, 24 x' bandit signs, with metal stakes. These are available all over the internet. Just Google "blank bandit signs." My recommendation? Contact the company by phone. I buy my signs from Sign Warehouse (signwarehouse.com). And speaking to a sales rep sometimes has perks, like free shipping. My rep, Stephanie Johnston, used to cut my shipping all the time. And these boxes are heavy...
Ok, you're 100 blank bandit signs have arrived. Now, take 30 out, and write this on them:
$.30 on the dollar! must sell now!! (local # from patlive.com)
Heck, if you wanted to put 40 or 50 out, that would be just fine with me. Why do I say to put $.30 on the dollar? Because unless you live in parts of Michigan or Ohio, that's a really, really good deal. Why "must sell now?" Because that creates urgency and gives the perception that the buyer must act... fast... if he's going to get his hands on this great deal. For all he knows, the property could be in foreclosure. Or, the property could just be a great deal. Whatever the reason, he needs to act quickly if he wants to get it.
Why use a local phone number from patlive.com? Because it's untraceable, and in most American cities, bandit signs are illegal. And, unless you want your city's local code enforcement calling you, you better have an untraceable number. Trust me, they won't be calling to buy your property. They'll be calling to threaten, and possibly issue, fines. But, they can't fine what they can't find. And patlive.com works like a charm.
Ok, so you have your 30 signs out advertising a fictitious property. What do you do next? You answer your phone... often. What? You don't think 30 bandit signs will make your phone ring? It will if you're advertising a deal for $.30 on the dollar. That's for sure. Would you call if you saw a sign like that? I sure would.
Ok, so you have your 30 signs out advertising a fake property. What next? You begin fielding calls. What? You don't think 30 bandit signs will make your phone ring? It will if you're advertising a deal for $.30 on the dollar. That's for sure. Ok, they call, get your voice mail and leave you a message. You call back and say...
"Hi Mr. Buyer. This is Joe Schmoe. I received your message you left about my property. Well, you're not going to believe this. One hour after putting those bandit signs out, I received a contract on the property and a deposit. I mean, I was actually fielding calls while I was still putting the signs out! However, as soon as I get another great deal, which won't be long, I'll personally call you BEFORE I market it to the public. That sound good to you? Cool, let me get your contact info, and I'll be in touch soon. You're now on my VIP buyers list."
And that's how it's done.
"But Maestro, 30 signs won't generate that many calls. I've used bandit signs before and they didn't work."
Uh, try them again. And, what I just told you to do, didn't just get pulled from the air. It's a tactic I use with my students... and not because it doesn't work. Have faith, grasshopper.
Ok, so you've got a bunch of new buyers on your short, but active, buyers list. BTW, you don't need 100+ buyers. All you need is 5 to 10 active, cash buyers. That's it. And you know these people intimately. The rest you put in an email database and blast to when you get a property that your real buyers pass on.... as a last resort.
Now, jump on the web and find your local real estate investment association (REIA). Here in Tampa, we have two, TBREIA and SREIA, and both are huge. Find one that meets close to your house and go to a meeting. I don't think you have to be a member to attend, but you'll only have to pay like $5, most likely. Make sure you use the time after the meeting is over to shake hands, exchange business cards and express your interest in finding cash buyers. And, if you enjoy your experience and believe it will benefit you, join the group and become a member. Again, it's not that expensive.
Success Tip 1
We're in this business to make a lot of money.
Success Tip 2
Until you have your buyers list, you can use other wholesalers to broker the sale between you and their buyers.
Success Tip 3
If you have active, reliable buyers, other wholesalers will now come to you. When they do, you mark up their selling price and flip their property to your buyer. Easy way to make some nice dough...
Success Tip 4
Remember success tip 1.
So, now that you have the buyers, what's to come of the other 70 (or 60, or 50, or 40, or whatever), bandit signs?
2. You locate your city's distressed sellers
Well, now that you have some nice buying contacts, it's time to bring them some deals. Take those 70 signs and write this on them:
I'll buy your house CASH! (patlive.com number)
Make sure you have two local numbers. Some like to use one number, with two options. Like, "If you're looking to sell your house, hit 1. If you're looking to buy a house, hit 2." I've never been a huge fan of that, though. I like the two-number system, better.
Remember, placement is important. You want tons of eyes on these signs, but you also want to place them in areas you want to buy. Find places that match those two criteria and stick them in the ground. Make sure they are at places where cars stop. No highway medians.
And while you are fielding leads from those 70 signs, you should be thinking of more ways to find buyer and deals. However, what I just described to you will definitely give your business a kick in the pants right off the bat. It will give you tons of momentum. And momentum is HUGE in wholesaling. If you're lazy... it will become habit. If you're aggressive... that will become habit, also. And, the money you make will become addictive.
Trust me... grasshopper.
1. Locate My City's Wholesale Buyers
Sounds pretty easy, right? Uh... not so fast, my friend. Look, a lot of things appear easy, but that doesn't mean it will be. If you truly want to know who is buying up real estate in your area, you need to be proactive. They're not exactly going to be kicking your door in. You need to go find them...
Here is what you do first. One, get yourself 100 blank, white, 24 x' bandit signs, with metal stakes. These are available all over the internet. Just Google "blank bandit signs." My recommendation? Contact the company by phone. I buy my signs from Sign Warehouse (signwarehouse.com). And speaking to a sales rep sometimes has perks, like free shipping. My rep, Stephanie Johnston, used to cut my shipping all the time. And these boxes are heavy...
Ok, you're 100 blank bandit signs have arrived. Now, take 30 out, and write this on them:
$.30 on the dollar! must sell now!! (local # from patlive.com)
Heck, if you wanted to put 40 or 50 out, that would be just fine with me. Why do I say to put $.30 on the dollar? Because unless you live in parts of Michigan or Ohio, that's a really, really good deal. Why "must sell now?" Because that creates urgency and gives the perception that the buyer must act... fast... if he's going to get his hands on this great deal. For all he knows, the property could be in foreclosure. Or, the property could just be a great deal. Whatever the reason, he needs to act quickly if he wants to get it.
Why use a local phone number from patlive.com? Because it's untraceable, and in most American cities, bandit signs are illegal. And, unless you want your city's local code enforcement calling you, you better have an untraceable number. Trust me, they won't be calling to buy your property. They'll be calling to threaten, and possibly issue, fines. But, they can't fine what they can't find. And patlive.com works like a charm.
Ok, so you have your 30 signs out advertising a fictitious property. What do you do next? You answer your phone... often. What? You don't think 30 bandit signs will make your phone ring? It will if you're advertising a deal for $.30 on the dollar. That's for sure. Would you call if you saw a sign like that? I sure would.
Ok, so you have your 30 signs out advertising a fake property. What next? You begin fielding calls. What? You don't think 30 bandit signs will make your phone ring? It will if you're advertising a deal for $.30 on the dollar. That's for sure. Ok, they call, get your voice mail and leave you a message. You call back and say...
"Hi Mr. Buyer. This is Joe Schmoe. I received your message you left about my property. Well, you're not going to believe this. One hour after putting those bandit signs out, I received a contract on the property and a deposit. I mean, I was actually fielding calls while I was still putting the signs out! However, as soon as I get another great deal, which won't be long, I'll personally call you BEFORE I market it to the public. That sound good to you? Cool, let me get your contact info, and I'll be in touch soon. You're now on my VIP buyers list."
And that's how it's done.
"But Maestro, 30 signs won't generate that many calls. I've used bandit signs before and they didn't work."
Uh, try them again. And, what I just told you to do, didn't just get pulled from the air. It's a tactic I use with my students... and not because it doesn't work. Have faith, grasshopper.
Ok, so you've got a bunch of new buyers on your short, but active, buyers list. BTW, you don't need 100+ buyers. All you need is 5 to 10 active, cash buyers. That's it. And you know these people intimately. The rest you put in an email database and blast to when you get a property that your real buyers pass on.... as a last resort.
Now, jump on the web and find your local real estate investment association (REIA). Here in Tampa, we have two, TBREIA and SREIA, and both are huge. Find one that meets close to your house and go to a meeting. I don't think you have to be a member to attend, but you'll only have to pay like $5, most likely. Make sure you use the time after the meeting is over to shake hands, exchange business cards and express your interest in finding cash buyers. And, if you enjoy your experience and believe it will benefit you, join the group and become a member. Again, it's not that expensive.
Success Tip 1
We're in this business to make a lot of money.
Success Tip 2
Until you have your buyers list, you can use other wholesalers to broker the sale between you and their buyers.
Success Tip 3
If you have active, reliable buyers, other wholesalers will now come to you. When they do, you mark up their selling price and flip their property to your buyer. Easy way to make some nice dough...
Success Tip 4
Remember success tip 1.
So, now that you have the buyers, what's to come of the other 70 (or 60, or 50, or 40, or whatever), bandit signs?
2. You locate your city's distressed sellers
Well, now that you have some nice buying contacts, it's time to bring them some deals. Take those 70 signs and write this on them:
I'll buy your house CASH! (patlive.com number)
Make sure you have two local numbers. Some like to use one number, with two options. Like, "If you're looking to sell your house, hit 1. If you're looking to buy a house, hit 2." I've never been a huge fan of that, though. I like the two-number system, better.
Remember, placement is important. You want tons of eyes on these signs, but you also want to place them in areas you want to buy. Find places that match those two criteria and stick them in the ground. Make sure they are at places where cars stop. No highway medians.
And while you are fielding leads from those 70 signs, you should be thinking of more ways to find buyer and deals. However, what I just described to you will definitely give your business a kick in the pants right off the bat. It will give you tons of momentum. And momentum is HUGE in wholesaling. If you're lazy... it will become habit. If you're aggressive... that will become habit, also. And, the money you make will become addictive.
Trust me... grasshopper.
About the Author:
Andrew Massaro is the country's top wholesale real estate coach to the new investor. For coaching services, visit http://tinyurl.com/ygf97l7. He is also the author of the wildly successful e-book, Quick Flips and Fast Cash real estate investing.