Starting A Real Estate Wholesaling Business From Scratch

Last Updated (Wednesday, 31 December 1969 15:59) Written by Andrew Massaro Sunday, 29 November 2009 23:26

If I were just starting my new real estate wholesaling business, I'd start off exactly like this. This is important stuff. So, take your eyes off of American Idol for a second and pay attention.

If I were just starting my new real estate wholesaling business, I'd start off exactly like this. This is important stuff. So, take your eyes off of American Idol for a second and pay attention.

Step #1. Seek Out and Locate Your City's Wholesale Real Estate Cash Buyers

I know, I know. Sounds easy, right? Uh... hold on a sec, my friend. Look, just because something seems easy, doesn't mean it will be. If you want to find out who is buying up wholesale real estate in your area, you need to be proactive and aggressive. They're not exactly going to be kicking your door down. You need to get out there and find them...

Here is what you do... first. One, get on the horn and buy yourself 100 blank, white, 24 x' bandit signs, with metal stakes. These are available all over the web. Just Google "blank bandit signs." My recommendation? Contact whichever company you choose by phone. I get my signs from Sign Warehouse (signwarehouse.com). And speaking to a sales rep sometimes has perks, like discounts and/or free shipping. My rep, Stephanie Johnston, used to hook me up all the time. she's the best.

Ok, you're 100 blank bandit signs have arrived. Now, take 30 out, and write this on them:

$.30 on the dollar! must sell now!! (local # from patlive.com)

Heck, if you wanted to put 40 or 50 out, that would be just fine with me. Why do I say to put $.30 on the dollar? Because unless you live in parts of Michigan or Ohio, that's a really, really good deal. Why "must sell now?" Because that creates urgency and gives the perception that the buyer must act... fast... if he's going to get his hands on this great deal. For all he knows, the property could be in foreclosure. Or, the property could just be a great deal. Whatever the reason, he needs to act quickly if he wants to get it.

Why use a local phone number from patlive.com? Because it's untraceable, and in most American cities, bandit signs are illegal. And, unless you want your city's local code enforcement calling you, you better have an untraceable number. Trust me, they won't be calling to buy your property. They'll be calling to threaten, and possibly issue, fines. But, they can't fine what they can't find. And patlive.com works like a charm.

Why use an untraceable local phone number from patlive.com? Because in most American cities, bandit signs are illegal. And, unless you want the po po, or your city's local code enforcement, calling you, you better have an untraceable number. And they won't be calling to buy your property. They'll be calling to threaten, and possibly issue, fines. If they can't find you, they can't fine you. And patlive.com works like a charm.

Ok, they call, get your voice mail and leave you a message. You call back and say...

"Hello Mr. Buyer. This is Mr. Seller. I just got your message. Believe it or not, one hour after putting those bandit signs out, I received a contract on the property and a deposit. I mean, I was actually fielding calls while I was still putting the signs out! However, as soon as I get another great deal, which should be in the next week, or so, I'll personally call you FIRST... before I send it out to my buyers. How does that sound? Cool. Let me get your contact info, and I'll be in touch. Welcome to my VIP buyers list."

And that's how it's done.

"But Maestro, I've used bandit signs and they didn't work at all. Are you telling me that 30 signs will make my phone ring like that."

Uh... yes, I am. And try them again. Listen, what I just told you to do didn't just get pulled from the air. It's a tactic I use with my students... and not because it doesn't work. Have faith, grasshopper. The Maestro's got you covered...

Ok, so you've got a bunch of new buyers on your short, but active, buyers list. BTW, you don't need 100+ buyers. All you need is 5 to 10 active, cash buyers. That's it. And you know these people intimately. The rest you put in an email database and blast to when you get a property that your real buyers pass on.... as a last resort.

Now, get on the internet and find your local real estate investment association (REIA). Here in Tampa, we have two, and they are huge. Find the closest one to your house and go to a meeting. I don't think you have to be a member to attend, but you will have to pay. Should be cheap, though. Use the time after the meeting is over to shake hands, exchange business cards and express your interest in finding cash buyers. And, if you desire, join the group and become a member. Again, it's not that expensive.

Success Tip 1

We're in this business to help people and to make money. Remember that.

Success Tip 2

Until you have your buyers list, you can use other wholesalers to broker the sale between you and their buyers.

Success Tip 3

If you have active, reliable buyers, other wholesalers will now come to you. When they do, you mark up their selling price and flip their property to your buyer. Easy way to make some nice dough...

Success Tip 4

Remember success tip 1.

So, you ask, what do I do with the other 70 blank bandit signs?

2. You locate your city's distressed sellers, contract to buy their house and bring it to your VIP buyers.

You've got the cash buyers, right? So, now it's time to bring them some deals. Take the remaining signs and write this on them:

I'll buy your house CASH! (patlive.com number)

Make sure you have two local numbers. Some use one number, with two options. But, I'm not a huge fan. I like the two-number system, better.

And, placement is important. You want tons of eyes focussed on your signs, but you also want to place them in areas that are desireable to your buyers. So, find places that match those two criteria and stick them in the ground (facing the oncoming traffic...). Make sure they are at places where cars stop. No highway medians, where cars are racing by at 55 mph.

And while you are fielding leads from those 70 signs, you should be creating a more well-rounded marketing mix. However, what I just described to you will definitely give your business a kick in the pants right off the bat. It will give you momentum. And momentum is HUGE in this business. If you're doing nothing... it will become habit. If you're active and aggressive... that will become habit, also. And, the money you make will become addictive.

Trust me... grasshopper.