All too often would-be investors get into wholesaling with the hopes of doing a few deals here and there in order to make some fast cash before moving into other real estate investment niches. These are the folks who go to the latest seminar to roll through town, buy a few blank bandit signs, mark them up with a sharpie, and place them out with the hopes of finding that one that one life-changing deal before the lights get cut off.
Can it happen that quickly, with minimal effort? Of course!
Will it happen? Probably not!
Wholesaling real estate to other investors who will, in turn, take those ugly houses and polish them into gems is an amazing way to earn huge commissions relatively quickly. And first and foremost, it’s a business. More often than not, the lucky few wholesalers who smash a home run on their first at-bat often aren’t able to replicate their success and quickly wash out.
The reason for this is simple… Over the course of a year, as an investor, you may get one or two home run deals that land in your lap. Where your average profit on a deal is say $5K, you’re able to bring in a large multiple of this on a home run…
Unfortunately, the newbie wholesaler who puts out 5 bandit signs, fields 3 calls and lands a deal that nets them a 15K commission all over the course of a weekend really has no clue on “how” they were able to make that deal happen and aren’t able to replicate it.
Early success can be both a gift and a curse… Hitting singles keeps you in the game.
Furthermore, the “lucky” investor will probably allocate much less than needed towards their advertising budget because they generated their first deal on peanuts… Or they may throw too much at marketing before understanding how to target, test, measure and tweak campaigns properly – quickly blowing through their initial profits over the course of a few months.
Tips for Marketing Yourself as a Wholesaler
As previously discussed in Dominating as a Wholesaler in Your Market – the investors who treat wholesaling as a business are the ones that win over time. Sure, you may not see 5-figure commissions on every deal, but closing two to three or even more $3K to $5K deals in a month surely beats doing none right?
As a top wholesaler, you have to serve both the needs of investor buyers and sellers of distressed properties.
These are two very different markets that require separate approaches to getting the word out. Understanding both is essential for sustaining success.
Marketing to Sellers
Many property owners out there really want or need to rid themselves of properties. As a wholesaler, it’s your job to find these owners, address their needs and create a solution that benefits them while leaving enough profit on the backend for your assignment fee and the investor who will rehab the property.
Property owners are everywhere, however, they aren’t wearing neon shirts announcing, ”I WANT TO SELL MY HOUSE FOR PENNIES ON THE DOLLAR” so you’ll have to get good at seeking them out.
Using bandit signs, direct mail or online SEO & PPC marketing are all extremely viable ways of getting in front of prospects.
The professional wholesaler uses a combination of strategies to crush their local market, seemingly being everywhere at all times. Someone who may not be a prospect today could very well be one tomorrow… Life events happen all of the time and you want to be top of mind when they are finally motivated to sell.
Do I Need a Website?
While you don’t necessarily need a website to become a top wholesaler, you’re making your job 10 times harder if you don’t. In today’s marketplace, even the least web-savvy of your prospects will do a quick Google search of your company to see what comes up. If you’re a complete ghost online, good luck with building credibility.
Furthermore, having a web presence allows you to collect leads 24/7… You can take a vacation and your website will continue to work for you. Leads are the lifeblood of your business as a wholesaler.
Marketing to Investors
As a wholesaler, the endgame involves assigning your rights in a purchase contract over to an investor for a fee. Marketing yourself as a wholesaler will allow you to build a Buyers List of investors who need deals, but are too busy to find them on their own.
You can find these investors both online inside Connected Investors community and Marketplace. Offline you’ll find buyers by attending local REIA meetings, using free advertising sources such as Craigslist, bandit signs and using your website to collect leads.
Understanding what these investors are looking for is how you’re able to establish yourself as the go-to wholesaler in your market for deals. Focusing on finding deals that have ready-made buyers in place is how you’ll be able to flip multiple contracts per month as opposed to getting a deal under contract and hoping to find a buyer before it expires.
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Anyone Can Call Themselves a Wholesaler
There’s not a high barrier to entry to becoming a wholesaler and as such to the untrained eye that means there’s a lot of competition. So while there may be a “lot” of wholesalers, most simply aren’t very good… Treating your wholesaling activities as a business and not a hobby are how you’ll separate yourself from the pack. Do this and you’ll soon have tons of motivated sellers feeding your pipeline of vetted buyers who are able to close on good deals in days.
Make no mistake about it, becoming the top wholesaler in your market takes work to create a presence and establish credibility, but the rewards for doing so are receiving consistent and massive profits. When you factor in the the ability to diversify as an investor – by taking on both fix and flip projects and buy and hold properties – you should begin to see how wholesaling as more than just a passing stop on your investment career but a vital component of a lasting and profitable one.