How To Start Wholesaling Real Estate For Beginners - 3 TIPS To Get Started!Apr 15, 2019
In this video, a Pro Wholesaler Student came into the office and I taught him about wholesale real estate investing. In this article, I will recap the 3 TIPS I covered with Mike so that you can learn how to start wholesaling real estate sooner rather than later!
3 Tips On How To Get Started Wholesaling Real Estate
1. Get Access To The MLS
2. Attend Real Estate Investors Association Meetings (REIAs)
3. Only FOCUS on 1-2 Marketing Strategies (NOT 5-10 Strategies)
Tip #1 - Getting Access To The MLS
First off, what we talked about was getting MLS access. What's MLS access? It's the Multiple Listing Service. It's a database of all leads on the market in your area. It’s very important as a real estate investor, and as a wholesaler, to get access to this because, if you get access to this, you have access to all the leads on the market! Now, on the MLS there are houses that are for sale that have been renovated… These aren't really good leads to fix & flip and to wholesale because they are already renovated to current market conditions. However, there are plenty of distressed real estate leads on the MLS, so you want to get access as soon as possible.
2 Ways To Get Access To The MLS
1. You can be a licensed real estate agent or broker.
2. You can get unlicensed assistant access.
With unlicensed assistant access sometimes there's a sign up fee and also a fee around $25 per quarter, so every three months you have to pay that amount. But go ahead, and get unlicensed assistant access so that you can get access to all leads on the market in your area!
The next point under MLS access, is how do you get it? You need to get it from a real estate agent or a real estate broker. Real estate agents & brokers are the ones who can grant you this MLS assistant access. Be sure that you pay for the access and do not have the agent/broker pay for the access. It's going to be a lot easier when you pay for it. Like I said, it's a nominal fee, but you can incentivize this real estate agent by saying, "Hey, if you give me MLS assistant access, I'm going to be filtering and finding leads on the MLS that I can send offers on. There's going to be deals that you can be my buyer's agent on, and you can submit the offer for me, so you can get buying commissions on these deals."
It is really important to communicate this because buying commissions are how real estate agents and also real estate brokers get paid. If you wholesale a deal to a fix and flipper, now you can also incentivize this real estate agent by saying, "Hey, if my fix and flipper (my cash buyer) needs a real estate agent to list this property, then you can potentially get a listing commission. You can get a listing commission by listing this fix and flipper's deal that I wholesale." Also, even if you're a fix and flipper yourself and you fix and flip a property, and you need a go-to agent to list your property for you, then you can incentivize this agent to give you MLS assistant access by saying, "Hey, I'll let you list my property for me once it's been fixed and flipped."
I've been doing real estate deals off of the MLS for 8 years, and what's really important is to understand that it's a numbers game. It takes about 15 offers to get one deal accepted. A 15 to 1 ratio to make a $10,000 wholesale fee. Most people don't know this, and so they bad mouth the MLS. For example, these people send two offers and they get two “nos”, and they quit. They give up and just quit, and they suffer and fail. Those people won't be successful. You need to keep going. You need to know that it takes about 15 offers to get one deal. All right? If you get 14 “nos”, keep going. Heck, if you get 15 “nos”, keep going. Keep submitting offers until you get it. You will make it happen. You will get this wholesale fee. It's not unreasonable to at the very least do one offer a day. That's 30 offers a month. You should be getting around two deals a month then, or about $20,000 in wholesale fees. Work your way up to that.
Once you really get rocking and rolling, then you can do up to five offers a day. When you do that, you are doing volume, and you can start building a team. Five offers a day is 150 offers a month. This amount of real estate offer volume is what the best of the best investors are doing. If you want to play with the big boys, definitely work on submitting offers. Also, remember that 15 to 1 offer ratio to make $10,000.
Tip #2 - Attend Real Estate Investors Association Meetings (REIAs)
The second point I went over with Mike was the importance of REIA, R-E-I-As. These are Real Estate Investors Association meetings. You want to go to these meetings in your area so that you can become a familiar face and get known. These are the meetings where real estate investors hang out & where people who are interested in real estate investing hang out. At these meetings, real estate investors do case studies on deals they fixed and flipped. For this reason, going to REIA meetings are a great way to find cash buyers if you're a wholesaler. If you’re a wholesaler and need cash buyers for your real estate deals, then go to these meetings…. Go to as many as possible.
So, once you start going to these meetings you're going to become a familiar face. You're going to start seeing other people; you’re going to start seeing the same cash buyers in different places, and they're going to be more willing and able to work with you. It's really important to build trust and relationships with these cash buyers, and this is a great way to do it. To find these REIA meetings, just Google it. Look on meetup.com. Type in your city name and “REIA” and/or “Real Estate Investors Association meeting” to fid them. Locate these meetings & then go to them. Don't be lazy. Don't skip this step. This is really important. REIA meetings allow you to actually go out there and network, and they allow you to get outside of your comfort zone while becoming known in your area for real estate. You’ll meet people that you develop long-term business relationships with. Heck, someone I'm working with right now, I met eight years ago at a Real Estate Investing Association meeting. He’s one of my best friends and we’ve done millions in real estate deals together. You never know who you're going to meet at these meetings!
Where Do I Find Real Estate Agents Or Brokers That Can Help Me Get MLS Assistant Access?
If you need a real estate agent or a broker to help you get assistant access, where do you find them? One of the best places to do this is to meet them at a Real Estate Investing Association meeting. Make it easy on yourself! There's a good saying - They say, "How to find a good girl to marry?" Well, ask yourself "Where good girls hang out?” Go to church. Go to the gym, & exercise. Go to these different places." If you're asking a question, "Where do I find a real estate agent or broker that want to work with me," then go to where real estate agents and brokers who are interested in real estate investing hang out… And, where they hang out at are REIA meetings.
Let's not make it hard on ourselves. Let's make it easy. Go to Real Estate Investing Association meetings, and, once again, you'll become a familiar face, and you'll get taken seriously. This is the best and easiest hack, guys. If you're brand new to an industry, how do you meet all the big players? You go to where all the big players go. Be consistent in going to these meetings. Don't just be the fly by night guy. Don't go to one meeting and then never go to another one. Go to as many as possible. Become a familiar face, network, and meet the real estate players in your area, and soon, you'll become a player, as well.
Tip #3 - FOCUS IS KEY When Learning How To Start Wholesaling
The most important thing is focus. A lot of times, we forget this. When you're starting out as a real estate wholesaler or real estate investor, and you're trying to get deals, you need to focus on one or two marketing strategies to get deals. ONLY one or two. A lot of people that I’ve worked with over the years struggle and suffer because they're trying to focus on five to ten different marketing strategies to get deals. Guess what? They become the jack of all trades and the master of none. When you focus on one to two marketing strategies, you'll start to be successful at wholesaling houses & real estate.
What do I mean by Focus? Here’s an example: if you use the MLS, then FOCUS and go ALL IN on this marketing strategy. Submit offers day-in & day-out. Scour and filter through the MLS. Go through all the new listings, all the distressed properties, submit offers on them, and develop relationships with all the different types of agents that are listing these types of properties. This way, you can not only develop relationships with agents who are doing deals on the market, but eventually this will also bring off-market deals to you, as well.
Maybe your other strategy is direct mail or driving for dollars. Now, you only have 2 strategies you’re focusing on instead of 10… Just don't do five different strategies. If you can just focus on one, do one. If you can focus on two, great, but I don't recommend doing more than that. Focus until you have a consistent stream of deals from one marketing source. Then, systemize the process on getting deals, automate it by plugging in other people, and go on to the next strategy. Once you do this, you'll be well on your way to having a successful wholesaling business.
Great, so there are 3 tips on how to start wholesaling real estate! We just recapped what I talked about an hour with my student, Mike. This video and article goes over the most important points of our meeting. Let’s recap:
Tip 1 - We talked about getting MLS access & why it's important. It's a database of all leads on the market in your area. You can continually submit offers every single day through the MLS. Submitting a high amount of real estate offers is extremely important because it takes about 15 offers to get one deal and make $10,000 as a wholesale deal. Also, you can get access to the MLS from one of two ways: 1) being a licensed real estate agent or broker or, 2) being an unlicensed real estate assistant. As talked about, be sure to incentivize agents that are going to give you the assistant access with buying and listing commissions .
Tip 2 - Go to all of the Real Estate Investor Association Meetings (REIAs) in your area. Google these, look for them, and put them in your calendar to attend. Become a familiar face & build trust with other members of these meetings. This is where you will find cash buyers and you'll find those real estate agents or brokers to work with that can get you that MLS access, as well.
Tip 3 - Focus. I know when you're starting out, there are so many things under the sun you feel like you need to do. However, if you just focus on one to two marketing strategies, and become the master of those strategies, then you will begin to see results. Whatever you do, don't spread yourself too thin when starting out as a beginner!
Happy investing & submit those offers!