5 Keys To Improve Your Wholesaling Success
By JD Esajian on May 24, 2018
Wholesaling can be a great way to break into the real estate business or supplement your current income. In fact, many experienced investors got their start through wholesaling. In a nutshell, wholesaling starts by finding a deal and passing it along to an end investor. For your time and efforts you are either paid a flat fee upon offer acceptance or in rare cases a percentage of the profits. While it can be frustrating having to pass along a quality deal, without funds to close them there is not much you can do. Instead of making nothing you can earn on a deal while building contacts and knowledge of the business. Whether you are a full-time wholesaler or only work on a few deals a year there are things you can, and should, improve. Here are five keys to help improve your wholesale success.
- Get quality deals. Everything in the world of real estate is based on numbers. This is especially important when it comes to wholesaling. The more people you talk to the more likely you are to find a quality deal. If you talk to ten homeowners you may get three decent leads, which only one may turn into a deal. This can be extremely frustrating, but you need to go into every deal with the same mindset. The goal isn’t to simply get a homeowner to contract but get a deal that actually makes sense for an end investor. It doesn’t do anybody any good twisting the numbers to make a deal more attractive. If you constantly deliver subpar deals you will earn a poor reputation that can be difficult to shake. Regardless of the gap between deals always focus on the numbers and the bottom line.
- Find inexpensive marketing niche. You are only as good as your ability to produce new leads. You can be great with numbers and people but if you don’t have deals to work on it won’t make a difference. With the boom of social media and the increase in technology there are a handful of ways to market your business and find new leads without breaking the bank. No longer do you have to spend thousands of dollars in direct mail to be a successful wholesaler. You can develop a social media campaign, find an online niche or work with a local real estate agent and scour through old leads. Whatever you do, you should find a niche you are comfortable with and stick with it. Every week you should do something to help generate new leads. Regardless of whatever else you have going on, you should spend a few hours one day a week to help get your phone to ring.
- Build a rapport. Once you have a steady flow of leads to work on the next step is converting those leads to deals. A majority of the leads you generate should be from distressed homeowners. Dealing with these types of homeowners requires a different approach. Instead of pressing them with a high stress sales pitch you need to start by building a rapport. Find out how they get into their situation and what their goal is with the property. You may not always be able to help them, but you should at least find out what they want. Homeowners who are late on their mortgage or in foreclosure have been bombarded with phone calls and emails for months from their lender and fellow real estate investors. Instead of trying to compete with them you are better off going the other way and building a rapport. The more comfortable they feel with you the more likely they will work with you when they are ready.
- Transparency on all ends. People want to work with people they feel they can trust. Instead of rushing your seller to sign a contract you need to walk them through every step of the way. There are many times a seller will sign a rushed contract only to back out down the road. At this point you will have wasted your time and lost the confidence of an end buyer. It is critical to always be as transparent as possible with everyone involved. If your seller asks about money or profit there are ways to answer without making them feel offended. Yes, your goal is to make money but there is also risks associated with the property. Don’t run from the fact that you, or the end investor, is looking to make a profit. The numbers will eventually come out at the closing, so you might as well put them on the table now. The same is the case when presenting the deal to your investors. There is no need to exaggerate the property or fluff the numbers up. A good investor will do their homework and find out anyway.
- Build buyer list. A good wholesaler adds at least two names to their buyer pool every week. Good deals usually have no trouble finding end buyers but unique properties in certain markets will be difficult. You need a large buyer pool, in numerous markets, to turn your properties over. It doesn’t do you much good finding deals if you can’t get rid of them. Fortunately, there are many ways of building your list. Start by reaching out to any bandit sign number you see. You can also search sites such as Craigslist and Zillow and don’t ignore social media. A good buyer list is key to a quality wholesale business.
A few tweaks in your lead generation, your mindset and your buyers list can completely transform your wholesale business.