Hey guys, Joe McCall here…
I recently ran across an interesting discussion in a popular online forum – a newbie investor was asking how to get started wholesaling with very little cash, which happens to be a topic very near and dear to my heart and something I actually coach many, many students through.
So, I read through the thread and was dismayed to find something I unfortunately often see in this forum and that is the (bad) advice from someone in the thread that:
#1. Not only can you not get into wholesaling with little capital to start with…
but,
#2. there was also a strong warning not to trust the “gurus” who say it is doable.
Now, I happen to be one such “guru,” even though I don’t really think of myself that way.
The fact that I offer training to my fellow real estate investors out there who can follow in my footsteps and model my business, by default, turns me into a “guru” whether I want to be one or not. I also happen to be friends with a lot of people I’m sure this person is referring to as a “guru.”
And while there are certainly some questionable “gurus” out there, many of them are good, honest folk who really have a heart for teaching and coaching, and unfortunately, may get lumped in and demonized with all the ones who just want to heap insults on the guru world.
Well, I couldn’t stop myself from jumping into this thread with some sage wisdom and a big pile of free advice for this person. AND, it turns out, it was actually a great stream of consciousness that, frankly, after I was done, I thought I should share with more people than just those in the forum.
So, I’m going to share my entire response in the form of a lesson. Yep, it’s just that good. Plus, what I lay out here is brass tacks, real world stuff – it’s exactly what I coach people to go through to get started with a bootstrap budget to make money as a wholesaler as quickly as possible.
And, I’d love to hear your thoughts as well below. So, let’s check it out.
Joe’s Forum Response Begins Here
Now hold on... Permission to speak my mind?
That’s such a typical online forum response… Blame everything on all those evil gurus. Don’t listen to the “guru garbage that wholesaling is a path to big paydays even without any cash, time or effort.”
Name one guru who has ever taught that you can wholesale deals without any “time or effort.” Please, be specific, with quotes and references. Who teaches that? Honestly, I’ve never heard one. Even the worst gurus will admit that you need to put at least a little “time and effort” into the business.
I just think these kinds of blanket statements and generalities are not helpful and often just plain silly.
Let's stop the guru bashing, and let's offer more helpful advice.
I didn't have any money when I got started. I 100% bootstrapped it. Yeah - the gurus make it sound too easy sometimes. But I believed the ones who told me I could do it. (I thank God for these “gurus.” If it wasn’t for them, I wouldn’t be where I am today.)
I know tons of people - many on this forum - who got started in REI with little to no money. Yes, it does take a lot of time and effort. But you CAN DO IT.
Yes, it’s easier if you have money for marketing. But you don’t have to have money to start marketing for sellers. And again… I am speaking from personal experience.
Anyway, sorry for my rant… I know I just opened a can of worms.
You CAN wholesale properties with little to no money for marketing when you are just getting started. But you need to put a lot of time and creative effort into it. Let me tell you how I did it...
1) Find Other Active Wholesalers in Your Market
These are people who are already wholesaling 5+ deals a month. They do a lot of deals, but they don't like sitting behind a desk, sending postcards, taking calls, prescreening sellers, etc.
They would rather be in their trucks, driving around town looking at deals, meeting with sellers, sitting at the seller’s kitchen table, making offers, chasing the deal. These guys hate the admin stuff. They just like the chase of the deal. And guess what? Most of their leads come from referrals and the MLS. They don't do much marketing.
You're going to do the marketing for them and be their bird dog.
How do you find them? Drive around town and look for bandit signs. Google things like "we buy houses" and "sell house fast." Look on Craigslist and Backpage for ads. Network with local REIA's. Find them here in online forums. Flap your lips. Ask around...
Make a list of at least 100 investors in your market. Call them all.
Most of these wholesalers will be beginners and won’t call you back. You will find that maybe 5% of them will be legitimate. You are looking for someone who is experienced, who answers their phone and promptly returns their calls.
2) Talk to These Wholesalers - Find Out What They Are Looking For
Tell them that you are new in the market and you are hungry. Tell them you want to help them grow their business and help them make more money...
Don't ask them if you can sit down with them over coffee and pick their brain. Your sole goal is to help them do more deals and help THEM make more money.
Tell them you want to do some marketing for them and bring them prescreened seller leads. Ask them what areas they are buying in.
Ask them if they would be open to you bringing them warm seller leads, wholesaling the property and then splitting the profits with you. Maybe they can pay you a "marketing fee" after the deal closes. (Let them figure out how to best pay you. Don't worry about these details yet. You will just be an Independent Contractor/Marketing Consultant.)
3) Ask Them How They Want to See the Leads Presented to Them
Keep this simple. Make this easy for them. Give them enough information on each lead so they can see everything they want to see, quickly and easily:
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Give them the three lowest “active comps” of similar properties nearby.
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Give them the three lowest “sold comps.”
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Give them the Zillow link of the property.
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And if you can get property information from the county assessor’s office, print that into a PDF.
By the way, I recommend using Podio to keep track of all this. The basic version is free. You could also use Google Drive.
Ask each seller lead the basic 6 questions:
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Seller contact information
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Property information - address, bedrooms, etc.
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What’s your situation? Why are you selling?
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What would you like to see happen?
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If I can make that happen, how quickly would you like to sell?
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How much cash do you want to walk away with at closing?
4) Start Marketing for Sellers/Deals
This is where the rubber meets the road, right? There are tons of different things you can do that don’t cost much money. Here are my top recommendations:
A) Drive for dollars. Look for vacant properties. Call all the “For Rent” signs. Call the “For Sale” signs on properties that look like they need work.
B) Call Realtors of pending listings.
Look up all the properties online in your wholesaler's favorite zip codes that are listed as “under contract” or “pending” in the MLS. Look for the properties that need work - properties that only an investor would buy.
Some markets have this information in Redfin, sometimes you can find it in Zillow. The best way though - find a Realtor to send these to you (as a daily automatic email alert).
Call the listing agents of these “pending” properties and say something like this:
"Hi, My name is Joe, and I saw that you have a property listed at 123 Main St. Is it still under contract/pending? Well, the reason I am calling is because I am an investor and we are looking to buy more properties in this area. If your buyer falls through, would you mind calling me so I can make an offer on it? You can represent me and double dip the commissions. Great! What is your email so I can send you my contact information?”
Almost every Realtor will thank you for calling them. If the deal does fall through, and many times they do, you will be their hero. That Realtor has already spent their commission in their mind. You will help them save face, make their client happy, and they will actually get more commission bringing the deal to you.
The really cool thing about this strategy is that it helps you come into contact with the Realtors who are willing to list these kinds of properties. They are really valuable to know.
You will need to collect all the emails of every Realtor you talk to. (More on this in a minute.) Ask everyone: “Can I send you my contact information so you don’t have to write it down?”
C) Call all the Zillow rental ads in your target markets.
Tell them that you are an investor looking for rental properties in the area to buy. Ask them if they would consider selling their rental property. Or, ask them if they are in the market to buy any more properties (to build your buyer’s list).
If it is an agent or a property manager, ask them if their client would be interested in selling the property. They can represent you and get both sides of the commission. Ask them if they have any other clients who might have a rental property that they would like to sell. Almost every property manager has clients who would love to sell their properties.
Ask everyone if you can send them your contact information, so they can call you if they find a deal in the future or change their minds.
The goal is to get their email addresses.
D) Text and email Craigslist ‘For Rent’ ads
Look up rental properties on Craigslist every day. Send texts and emails to each ad, asking them if they would consider selling their rental property. Get them on the phone. Talk to them. Tell them you are an active investor, looking for properties to buy in the area. Ask them to think of you if they ever find a deal. You will pay them a commission/referral fee if they bring you any deals.
E) Text/email Craigslist FSBO’s
Send a text/email to these sellers and ask them something like this:
“Hi, I am an investor and I saw your property on Craigslist. Is your price negotiable? My wife and I are looking for an investment property in the area. Call me. Thanks”
This next thing is REALLY important... Don't gloss over it. This is where the power is...
F) Email everyone on your list once a week, asking them if they have any deals.
This is where the real power of this strategy comes in. Most of these people that you call and talk to are going to forget who you are the next day. But you are going to send them an email every week, asking them if they have any deals. These are going to be simple, non-spammy emails. Something like this…
“Hi - just checking in… We talked a little while ago. I am an investor looking for hard-to-sell properties. Do you have anything I can look at?”
or
“I’m an investor looking for fixer-uppers. Do you have any deals I can look at?”
or
“Hey John… Hope you’re doing well. Do you have any investor specials? I am looking for any hard-to-sell properties. Call me or reply if you have anything.”
Be creative with the emails. Keep them short and sweet. No links - just a simple email, one or two sentences, looking for a reply or phone call.
To learn a cool trick to email all these people every week...
Go to YouTube and do a search for “Yet another mail merge tutorial.” You will find videos there on how to send these emails through your Gmail account from a Google Spreadsheet. Check it out right now... it's awesome.
G) Super ninja trick - find other bird dogs to do all of this for you.
Once you get all this figured out, and you’re starting to get lots of leads (and you will, I promise), put ads on Craigslist for bird dogs to do all this marketing for you. They will send the leads to you, you will prescreen them, and then send them to your wholesaler partner.
5) Send All the Leads to Your Wholesaler
Now, what do you do when you get a lead? You prescreen the lead and send it to your wholesaling partner. Simple as that. You don’t have to worry about steps 7-8 just yet… all you’re focused on are steps 1-2, which is marketing and talking to sellers.
You don’t have to worry about estimating repairs, getting comps, finding buyers, finding cash to close these deals, working with title companies, etc. Your wholesaler will take care of all that for you. You will learn that stuff as you go.
Again, track all these leads in a tool like Podio or Google Spreadsheets.
6) Reinvest Your Profits into Marketing
Now that you have done a couple deals, reinvest all your profits into marketing. Start doing postcards and yellow letters as soon as possible.
Let Me Summarize
I am speaking from experience. I am doing this in 4 different markets right now. I closed 20 deals the last couple months doing this - doing the marketing and partnering with other wholesalers - while I was traveling in my RV with my family.
This stuff works.
I had a stay-at-home mom who I was coaching a couple years ago. She had three screaming, crying, playful, energetic kids at home. She could NOT talk to sellers if she wanted to. And she didn’t have any money to do marketing. So she did the only thing she could do… She emailed landlords and sellers on Craigslist every day. She did all her deals, from beginning to end, with only Craigslist and emails. Every week, she would pick a new city…
She made it happen because she knew no other way. She didn’t believe anyone who told her she couldn’t do it.
So where there's a will, there's a way. How bad do you want it? Make it happen. Don't let anyone tell you that you can’t.
There is a ton of great free information out there. You don’t have to buy a course to get started (although a good course does help get you faster results). Keep asking questions, check out all the awesome free podcasts out there, get some books on Amazon, etc.
And when you do have some money to invest in your education, find a good recommended course and buy it.
Hope that helps!
Joe McCall
Care to Share?
I’ve said my share… got anything to add? Or maybe add some comments or questions below.