Considering real estate wholesaling? We forgive you for thinking of it as an easy way to quit your 9-5. But as many new wholesalers soon find out, real estate wholesaling can still occupy your time like a regular job. The industry comes with nuances far different than buying single or multi-family rentals. So to help you get started, below we recommend three things you must do to win at real estate wholesaling.
What’s A Real Estate Wholesaler?
Real estate wholesalers find properties under market value and put them under contract for a third-party buyer. Before closing, the wholesaler sells their interest in the property to a real estate investor or a cash buyer.
Long known as a great short-term investment strategy, wholesaling real estate has become an increasingly competitive market. Many people break into real estate investment through wholesaling because of the low entry barrier and relatively low risk. By basically acting as a middleman, you also get to work on your negotiating skills. But if you want to win, you have to do the most.
1. Never Stop Marketing
To gain traction as a new wholesaler, plan to market like crazy and don’t stop. Use every medium available: direct mailers, social media, billboards, newspaper ads, commercials, skywriting, town cryer… you get the idea.
Getting your name out there consistently is so important for clients to remember you. On average, potential sellers need 12-16 touchpoints before acting. And long periods of time can lapse between touchpoints and client outreach. Interestingly, direct mailers have high rates of return because people will hang onto a flyer for years before acting.
Consistency means not slacking after your first few deals or freaking out and slashing your marketing budget during lean times. Instead, keep marketing during good times. Double your marketing when business slows. You don’t feel the immediate effects of marketing.
So when the going’s good, keep attracting new deals by not changing your marketing program. And take on debt if you cannot afford your current rate of marketing when business slows. Wholesaling is a numbers game, so you have to put a lot of resources into your outreach.
2. Learn to Delegate
Look, you just cannot do it all if you want to develop and scale a real estate wholesaling business. Sure, it can feel tempting to do everything yourself instead of hiring someone who only does 80% of your work. But consider this another numbers game. If you hire two people at 80% of your work level, you now have a 160% productivity rate. That’s a 60% increase in overall work completed without you grinding it out.
Also, spend the money to hire actual experts in data analysis and invest in good AI technology. Never, ever, ever skimp by getting some cheap lists off the internet. As the saying goes: garbage in, garbage out. Collecting and analyzing data is critical to your success and well worth delegating to the experts.
You need to know your market to target people most likely to become your client and be in tune with your metrics. Analysts will break it down for you, identify ideal clients to target, and forecast future trends. (PS: use this knowledge staff up to the level of help you need to meet that future demand.)
3. Plan for Uneven Work
If you’ve ever owned a business, you know that income doesn't come in steadily like that 9-5 paycheck. This is especially true in real estate wholesaling. You should expect crazy busy peaks and depressingly low valleys. Planning helps you hire appropriately for the good times. A solid credit line will get you through the low times that you can repay when the good times return.
Smooth work and income levels only come from jobs at the cube farm (that place you wanted to escape). As an entrepreneur, learn to get comfortable with being uncomfortable. But consistently market in your target areas using good data from expert analysts. If taking on business debt makes you feel a certain type of way, clench your jaw and do it anyway.
You can do this. We have faith in you. Want some help getting started or just need to bounce an idea off someone knowledgeable in investment real estate? Hit us up.
Other Chicago Real Estate Resources We Have For You
- RTLO in Cook County
- BRRRR Investment Strategies in Chicago
- Podcast Episode W/David Greene - Bigger Pockets Host & Expert Investor David Greene Visits Straight Up Chicago Investor
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