myEmpirePROTo wholesale houses in this highly competitive climate, there are a few old beliefs that you must let go of.
- The Myth of the Cash Buyer
- List building & Monetization
- WiiFM Realtors
Let’s break it down…
Below is a question for us to address profits of wholesale houses…
“I need help.
I got a property that is 3 hours away from me under contract.
The city that I got under contract is not a growing city.
She was selling 2 houses for 45k and the ARV is 107K to 133K.
I started marketing the property on Facebook marketplace and craigslist.
I’m not getting any cash buyers.
And I call realtors in the city.
They have no cash buyers or investors out there.
Please help.”
Enjoy the video.
…Did you know that you can get the Audio for FREE
Smart Real Estate Wholesaling
The Ultimate Guide to Finding & Selling Wholesale Houses
To find and sell wholesale houses, you need to simply engage a marketing strategy that will find deals and deeply discounted properties.
How do you find wholesale houses?
Deals just don’t fall out of the skies.
Therefore it means you have to find PEOPLE that have a reason to sell their real estate properties
…Less than what it would be worth on a regular retail market.
The idea of wholesale in trading is to:
- Buy goods in large quantities directly from manufacturers or distributors,
- Warehouses them, and
- Resells them to other businesses.
But in real estate, it’s a slightly different.
So let’s break the difference down.
- Lock discounted real estate in quantities under contract directly from distressed owners and motivated sellers,
- Manage them in an inventory on sales contracts, and
- Resell them to other real estate investors.
Due to life events that lead to the unaffordability of owning a property,
Those in wholesale are typically able to buy products at a lower price and add their margins as an assignment fee….
And assign the sales contract to an able and will end buyer who is investing in fixing up and selling or renting out.
Now that you understand how to wholesale houses for big profits, let’s talk about 3 reasons why many beginners and rookies fail at it.
(1) The Myth of the Cash Buyers Buying your Wholesale Houses
At the seminars, everyone was taught about the “HOLY” cash buyers who are just ready to pick all the deals you find.
It turns out that there are many reasons why waiting on cash buyers just doesn’t work.
Cash buyers do exist but the last thing you want to be is to depend on them to dispose your deals.
Because more people are finding out about the potential profits in wholesale houses,
There are simply not enough cash buyers to pick up the discounted deals.
The high supply of discounted wholesale deals also leaves power of options in the hands of the few willing and able cash-buyers.
So you need to approach the business with the right expectation that some and probably majority of your buyers may not be cash buyers.
You are better off calling them willing and able end-buyers.
And there are other financing opportunities available to finance deals for investors who may not be paying all cash.
Many wholesalers will also camouflage as cash-buyers.
But what they were looking to do is to sell with you in a joint venture.
While there is nothing wrong with that, it doesn’t help to propagate more honesty in the game.
Therefore bring down your expectations of existing cash-buyers and learn how to build and nurture your own list of investors.
(2) The Myth of Cash Buyer’s List
It’s not enough to build a cash buyer’s list to make sustainable profits in your business.
Because it cost money and at least time to sizable list, you need to monetize the process of building the list.
Therefore, it takes more like list building and monetization to sustain the process and not go broke before you close a deal.
Secondly, 50-100 people on your cash buyer’s list is not and will never be enough.
Heck, 10,000 cash buyers on your list is not enough to sell your wholesaler houses.
Because a lake of water smells and a flowing river is fresh, your list need to act the same way.
In essence, it doesn’t matter the size of your list as long as it’s an ever-growing and perpetually growing list,
You Win!
So if you have to go to so many meetups to grow your buyer’s list,
Your chances of getting frustrated out of the process is high.
Likewise, if you depend on the 5 cash buyers in your local market to do 3-5 deals per month,
Your chances of failing and never making profits with wholes houses is HIGH!
Therefore you need to learn how to setup proper marketing campaign online to build your list and monetize it.
To monetize means to have offers for them to buy while waiting for deals to be sent.
Ideally, it will be information products that will be valuable to their real estate investing journey.
Info-Products are also great because the profit margin allows for decent sale commissions.
When you get paid as you are building the list, you offset your marketing cost and even feed your family,
While waiting to close deals.
That’s why the gurus sell you training, coaching, tools and not just wait for deals to get paid.
It’s called funded proposal.
How much money do you need to wholesale houses?
Traditional wholesaling will require thousands of dollars or hours to find deals.
But it doesn’t have to cost anything these days.
With a funded proposal, attraction marketing, list building, and front-end list monetization, the effective cost is $0.
(3) Not Approaching Realtors with WiiFM
Another method that the seminars and gurus teach is to chase after realtors for comps.
So in order to know if there is a deal once you find wholesale houses, you need to know what it’s worth.
You do so by finding comparable sales typically withing 1 mile radius that sold in the last 6 months.
These are called comps.
Traditionally, you have to get access to the multiple listing systems (a.k.a MLS) to find this information.
Also, traditionally real estate agents had exclusive access to the MLS.
That’s why the gurus had new wholesalers and investors chasing after realtors to find “good comps.”
The myth is that realtors are happy to provide since they are hoping that you are a client.
But it turns out that a lot of wholesalers have messed that opportunity up by wasting realtors’ time.
If you become one of these wholesalers, you will never see profits from wholesale houses.
However the good news is that you do not need realtors to find comps anymore; thanks to technology.
Right here, we have DealEstimator.com which is absolutely a free tool to help you estimate the worth of a property.
More importantly, when you approach realtors, make sure you are approaching with value.
WiiFM (What’s in it for me)
Don’t put realtors on a pedal stool; they will fall off.
If you are talking to a realtor, don’t call yourself a wholesaler; that’s clown behavior as far as most of them are concerned.
Be ready to act like a conventional buyer; contract, deposit money and the whole 9 yards.
The bottom line is you do not need realtors or sellers who insist on deal with their realtors…
In order to make money with wholesale houses.
Most realtors will attempt to tell you that what you are doing is illegal if you chase after them.
Are wholesaling houses illegal?
If wholesaling as a form of trading goods is not illegal, wholesaling is not and will never be illegal.
However due to abuse, what we found in recent times is the rise of state regulations.
Some states now require a broker or agent license in order to do it consistently as a business.
Wholesale real estate will always be legal, as it is a great source of leads and marketers for the real estate industry.
Move on to the next prospect in your pipeline.
Therefore, that’s your hint; you need to perpetually growing pipeline of wholesale houses and buyers to survive sustainably.
To learn how to build and monetize a pipeline, read the book and get access to our classes.
