What is Wholesaling? How do you get started? This and more are discussed and explored in this Episode of The Discount Property Investor Podcast. Your Hosts David Dodge and Mike Slane explore the basics of wholesaling and outline what you need to do to get started TODAY!
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Welcome to the discount property investor podcast, where we show you how to buy real estate at a discount, so you can create wealth over time and income today. Our mission is to share what we have learned from the experience of others and help you make more money investing like a pro. We want to teach you how to create wealth by investing in real estate the discount investor way. Thanks for tuning in.
Mike: Welcome back to the discount property investor. Your host Mike Slane and David Dodge. Check out our free wholesale course.com where you can find more information on wholesaling. Today we are going to get into the ‘what’ of wholesaling. David, do you want to go ahead and jump right in?
David: Absolutely! So today we are really going to focus on what is wholesaling. Wholesaling is to sum it up. It would be buying something at a great price, often in bulk but not always, and selling that individual product, item, service at a good price. So at the discount property investor, our business is real estate investing. However, wholesaling when it comes to real estate is really a marketing business ok? So our business is marking, our product is real estate. So, what is wholesaling? Very, very basic, it is buying great, it’s selling good. So when we break down, how you go about wholesaling, there are really only about five key components to wholesaling. The first component would be marketing. Mike do you want to tell us a little bit about marketing?
Mike: Sure, so marketing when it comes to real estate — if you are not telling people that you are buying properties, how are they going to know? One of the things I read is, you can’t keep your business secret.
David: Such a good point.
Mike: There is no reason to keep it a secret. So the first thing that I would do, what I would recommend to anybody is just say, “Hey, I am a real estate investor.” Put it out there on Facebook. Just say, “I’m a real estate investor.” I mean it’s simple as that. So again, marketing is getting your message out to people and, when i refer to marketing I really talk about trying to find a motivated seller, or someone that needs to sell their house. When you get into that, you sometimes — it kind of gets a bad rep when you talk about real-estate investing as someone who is going to try and get a really good deal and rip people off. That’s not the case. I mean you are looking for someone that is in a distressed situation, but you are helping them.
David: Yeah, you want to provide a win: win scenario in all situations. Absolutely.
Mike: So again, you are marketing to homeowners, but typically homeowners who are in some sort of distress, who are going to be who you are working with the most. So you are out there and you need to get your message out, that you buy houses, it is simple as that. There is a bunch of different ways you can do marketing and we are going to dive a lot deeper into that in the coming episodes. So today we are going to talk — just — I will touch on probably the staple of marketing for real estate and I consider it to be direct mail. I think no matter what you’re doing, you probably need to get a direct mail campaign in place and — it’s pretty simple to do. You can go out to places like Listsources.com and purchase a list of absentee owners, high equity. Go out to — you can download that list, you can write letters at home and start sending letters to them, it’s as simple as that.
David: Absolutely, don’t overthink the marketing. But, this is the marketing business, do not forget. You are in the marketing business; real estate is your product so –. When it comes to marketing direct mail like you said, it is obviously a staple in this business. Anywhere between 70 and 90% of all the deals done by wholesalers in this business are getting their leads through direct mail. Now there is tons of other ways which we are going to jump into next week, in in our episode about marketing. But again, that is the bases, that’s the core, that’s the main point. Back to the topic, what is wholesaling? Marketing would definitely be the first core component of wholesaling. So you definitely want to get your marketing out, you need to get your phone ringing. If your phone isn’t ringing you don’t have business. The next step in wholesaling would be making offers. You need to make tons of offers, if you are not making offers; you are not going to get deals. So we like to try and make as many offers as possible, we set our goals high, we like to make between five and ten offers every single day. Doesn’t happen that way everyday but, some days we can do more than that, so. Making offers is super, super, super important. Because again, if you are not making offers you are not going to do deals. The next component of wholesaling would be contracts. Contracts are important because in order for you to lock up a property you have to present a contract to the seller, and whenever you get a property under contract, you then have what’s called equitable title in that property. It gives you the ability to then market that property.
Mike: I am going to interject a little bit here. So on contracts — this is something I think, I mean don’t be scared to progress as a wholesaler, you are going to make mistakes. But it is something I see a lot of newer wholesales do, they go and try and market a property for someone but they have no interest in the property. They might not have it under contract; they just know somebody and they start marketing it. That is not a really good way to go about it. And it is a pretty easy way to mess up your reputation as well.
David: It is.
Mike: So — I mean if I was a new wholesaler and I go to a [00:06:02.01 – inaudible] meeting and I say, “Hey I got this property, but I don’t have it under contract.” Then the next week David has it and he sends it out to his buyers list. It is going to create some confusion; people are going to say, “Hey, I thought you had this property.” It’s just not a good deal. So don’t be afraid to make the offer, write the contract, and get something under contract. That’s when you as a wholesaler have equitable interest and the ability to then go out and market that property. So that is hugely important.
David: It gives you the legal ability to market that property.
Mike: Don’t want to get much into legal again; we are not attorneys or whatever.
Mike: But it is definitely, extremely important, it is standard contract law too once you have something under contract, you have interest in it, so then you can have the legal right to sell it.
Mike: It is important.
David: Absolutely, so back to the ‘what’ though. When you have the property under contract. You are actually going to be selling that contract. So it is a kind of misconception that a lot of people have about wholesalers —
Mike: Still have it.
David: Me as well. Sometimes i forget that I am selling the contract, and not so much the property. If you — double close it, you are maybe selling the property but we will get into that in future episodes. So anyway when it comes to selling, the majority of the time you are going to be selling your contract. So when you are marketing that property you are really marketing that contract to purchase that property. So regardless, the fourth component of wholesaling is selling the deal/contract, and finally you are going to close that deal. So, we are located in St Louis Missouri, we use a title company to close all of our deals. We don’t recommend doing quick claims of anything like that because, legal issues could arise. We always use a title company. When it comes to closing there are two main ways to close the deal. We are going to jump into this on future episodes but a touch on it. You can do what’s called an assignment, or you can do what is called a double close. Again, we are going to touch on these core components of wholesaling in future episodes.
Mike: Yeah, in future episodes we also, if you are interested and ready to get started — learn a little but more right now, check out freewholesalecourse.com, there we have our entire course laid out for free. You can take a look at and again, it is going to give you a lot of the stuff we are talking about, and some links in there as well for everybody.
David: Absolutely. So freewholesalecourse.com, there is also a link to the freewholesalecourse.com on our website which is the discountpropertyinvestors.com. Check us out, if you are real estate investor and you are looking to buy some deals in the St Louis area at this point, check us out, you can subscribe the website in the top right hand corner there is a subscribe button. And just to get those individuals off the coach or — get some action going Mike, what would you say the first thing that somebody should do today? If they want to get into wholesaling, what would you say is the very first thing you can do today, to get the ball rolling on wholesaling?
Mike: Sure, I mean so; the first thing I said was tell people you’re buying.
David: Absolutely. And by the way, we buy properties in St Louis Missouri so if you have a deal, give us a call.
Mike: That’s right. And we will help you sell your deal as well.
Mike: We do a lot of stuff in this business, so let’s go wholesale, we are happy to help you leverage our buyers list. Back on topic though. So the first thing — again, I said tell people that you buy houses. So, your action item for this episode or I would say take away from it, go out to meetup.com, we have no affiliation with them, but go out to meetup.com and search for A.R.E.I.A a real estate investment association in your area, and sign up to go to one of the meetings.
Mike: Go out there, most of them are free or maybe 10 or 20 bucks. You go out there and you start networking with other real estate investors, learn from other people in your local market, what’s working. And tell people, hey you are looking to get started, looking to buy properties. I would say that is definitely action item number one, get out there and start networking.
David: Get out there, start networking, find the other wholesales in your market. Ask them if you can take them to lunch, or dinner, or coffee or whatever the case is. Get to know those individuals because those individuals are going to be able to help you. They are already going to have an established buyers list that you can leverage down the road. A lot of the people that are in the real estate industry, they just like being around other real estate investors. They are going to be more than happy to — to help you if you have any questions along the way. That’s how I learned. I had a coach — but I also did tons of networking, I met all the wholesalers on the market. And I said, “Hey guys, my name is Dave, I am getting into this business, I’m not going away, let’s get lunch.” I don’t look at all the other wholesalers as being competitors. I know you don’t either Mike. We look at all the other wholesalers in our market as being strategic partners for multiple reasons. But mainly because we can leverage their marketing efforts, and they can leverage our buyers list, or vice versa, to where we can do more deals by just working together. I don’t look at those guys as being competitors; I always look at them as being strategic partners. So back on topic, today find a local real estate investment association, also known as A.R.E.I.A. Get out there, start marketing and tell people that you buy houses, tell people you are a real estate investor, get the word out.
Mike: Awesome. So we will leave everybody with a closing quote then for the day. “An investment in knowledge pays the best interest.”
David: So true. Invest in knowledge, educate yourself, check out our video series and podcasts, we love to help people, we love to educate. But if you are not already listening to audio books or reading about wholesaling, we highly recommend just educating yourself, always — the education us never stops. We love educating and we are going to continue to learn new things, to better ourselves, our business, our life’s, and of course our pocketbooks so —
Mike: Thanks for joining us guys we look forward to talking to you again soon.