Wholesaling is arguably the best way to get started in real estate investing.
It requires very little cash, no credit, and has very little risk.
This is why most aspiring real estate investors give it serious consideration at the very least, and why it is a favorite topic of internet marketers who claim to have ” just discovered a hidden secret that will make you millions”.
Sadly many new investors take the bait, only to discover that the “great new thing” is just something old and re-tooled, or just BS.
I am a licensed real estate instructor, but I’ve done it all in the last 30+ years. Agent, Broker, Wholesaler, Rehabber, Flipper, Landlord, and Hard Money Lender. I’m still in the game on a daily basis, and plan to do so as long as I draw breath.
I put together this quick list of the top seven things that I feel will kill a new wholesalers chances at making it, and seven things you can do to help yourself succeed.
So, here we go!
- Desire for Instant Gratification
You know what I’m talking about.
You see some guy that pops up on the internet telling you how you can make a million dollars this year wholesaling properties. He’s got the secret; all you’ve got to do is whip out your credit card and send him a few thousand to get his super-secret new model for doing 10 wholesale deals every week. You’re not going to have to do anything, your phone will ring off the hook.
The problem is, that marketer doesn’t know how to close a real estate deal, and neither do you. Making money as a wholesaler is about much more than getting the phone to ring, you have to know much more about property values, negotiating, real estate laws, etc.
- Not following a proven method
This follows hand in hand with #1. That “flash in the pan” marketer may have devised a catchy twist that got a deal, but you need a complete step-by-step proven method that teaches you how to walk talk and chew gum like a wholesaler. Not questions left, just follow the plan.
- Lack of a Coach and Mentor
Most new would be wholesalers go to a seminar or take a class and come away with a bunch of info that they may never look at again. They pay their money and a week later life has caught up with them and wholesaling is a distant memory. That or after a few weeks the grind of constant marketing to get their business off the ground just becomes too much. It’s really hard to go it alone. When you are just starting out you need someone in your corner to give you direction, motivation, and accountability.
- Lack of self-belief
It’s great to have a “I can do anything” self-confident attitude. The problem is that it’s an attitude. Self-belief and attitude are two very different things. Self confidence is when you ask yourself “Can I do this” and the answer is yes. Self-belief never even considers asking the question.
- Paralysis of Analysis
This causes hesitation and delay. I’ve seen it a hundred times. You set the appointment with the seller for tomorrow instead of in an hour, so you have time to prepare. Or you hesitate on writing an offer until you can review the numbers. You cannot steal in slow motion…To buy at wholesale prices, you have to move at wholesale speed.
By not having a coach or mentor to give you direction, you tend to try and do everything at one time and wind up doing nothing well. It’s a guaranteed recipe for failure.
- Shiny Object syndrome
It’s been a month, you tried a bunch of stuff one time and nothing has instantly paid off, so you’re dejected and downhearted. Then you’re scrolling through Facebook and Wow! Here comes another marketer with another “sure fire, no lose, $10K in 10 days” pitch.
Out comes that credit card.
These are my 7 top reasons new wholesalers fail. There are many other reasons that you may not make it as a wholesaler, but you can increase your chances by following 7 simple rules for success.
- Find someone to learn from.
Pick someone that:
- Has been through a market downturn at least once
- Is in the game daily
- Resonates with you
- Has some credibility other that “I just discovered this thing.”
- Commit to do exactly what they say for at least 90 days and then evaluate your progress
- Ignore what other people tell you about the market, or wholesaling, or anything else.
Trust me, no amount of learning, coaching, or anything else will help if you aren’t willing to get off the couch and do something. Save your money.
If you don’t market, nothing happens.
- Keep your expectations realistic
You’re not going to make a million your first year, give it up. Let’s get that first deal, then let the million take care of itself.
- Be Determined
Some people take longer than others to hit their stride. Don’t give up. Once you get started you may find that you don’t even like wholesaling. You may want to build a rental portfolio, or something else. Just know that this is the best way to learn the ropes and get started. Real estate investing is something you can do for the rest of your life. Never have a job, make your own hours, and work from Starbucks, the pool, or the beach.
Is it worth it? Oh Yea!
Disclaimer: I am not an attorney or CPA. The content herein is merely opinion, and should in no way be considered legal or financial advice. Please seek professional legal and financial advice for your specific situation.