Are you looking to start wholesaling real estate?
In the video below, I am going to show you the reasons why most real estate wholesalers suffer & quit so that you can avoid these pitfalls and build a hyper-profitable real estate wholesaling business!
Video Time Stamps:
0:00 - The Top 5 Reasons Why Most Wholesalers Suffer & Quit!
0:26 - Reason 1
2:10 - Reason 2
4:46 - Reason 3
7:19 - Reason 4
9:38 - Reason 5
Note: we've transcribed the video above into this written blog post for those who enjoy reading over watching video!
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After training thousands of real estate wholesalers and flippers to be successful at real estate, it's apparent that most real estate wholesalers actually suffer and quit when it comes to building their business.
So today, I'm going to cover the five main reasons why most wholesalers suffer and quit, so you can avoid those pitfalls and you can build a thriving wholesale real estate business.
I'm Alex Martinez, CEO, and founder of realestateskills.com. And so, let's dive right into it.
All right. So reason number one why most real estate wholesalers suffer and quit is because most wholesalers actually spread themselves way too thin when they're starting out. And what I mean by this is, you may have seen it, and this may be you, the first week you're starting out in wholesaling, you may try door knocking.
And so, you're door-knocking on houses, seeing if people are willing to sell their house. And then that doesn't work out too great, so then the next week, you're starting to do direct mail campaigns. So you're licking envelopes, you're sending out mail.
And then that doesn't work too great, so the next week, you're then putting out bandit signs that say, "We buy houses. Cash," on them at 2:00 AM in the morning in the freezing cold weather, and you're hoping that that phone call will come of a motivated seller the next day or the next week. Doesn't come, and then you're driving for dollars, right?
So if you get the picture I'm painting, a lot of real estate wholesalers suffer and quit because they're not focused. They're not focusing on one strategy, and they're becoming the jack of all trades and the master of none. And that's an issue.
You got to focus on one thing at a time and become great at it. And so, don't be the wholesaler that's running around like a chicken with their head cut off, doing all these different things, trying to get a deal, and then suffering and quitting at the end because you just weren't focused.
What you want to do is focus on one system at a time, one marketing strategy at a time, and one acquisition strategy.
That's all you need. You want to do that, become great at it, and then what you can do is plug other people into this strategy that you're using to get wholesale deals, and then you can scale it, and you systemize it, and now you can go onto the next strategy. Don't be the wholesaler who is focusing on way too many things and ends up suffering and quitting in this business.
All right. Now, let's go to reason number two why most real estate wholesalers suffer and quit. So most wholesalers actually listen to what others say and take it literally. So one thing I always recommend for all my clients and students across the nation is that they attend Real Estate Investors Association meetings.
And what these meetings are, are where real estate investors go to hang out, so wholesalers, flippers, there's hard money lenders, cash buyers. All walks of life that are interested in real estate investing go and meet there, so it's a great place to network.
But what you're going to find when you go to these meetings is that there's going to be the top 1%, the people that are wholesaling and flipping 10-plus deals per month. But there's also going to be the hobbyists, the people that go to every single meeting for years that have never done a deal. And what happens is most amateur wholesalers will go to these meetings and they'll talk to these hobbyists. They'll talk to the negative Nancys, the negative Nicks.
And these people will ask them, "What are you doing to get deals?" And you may tell them that, exactly what you're doing to get deals. And guess what they'll say. "That's way too hard. That doesn't work. That's competitive. No way. I've tried that. Guess what? It doesn't work."
What amateurs will do is literally take that information in and believe that to be true. But it isn't the case. If you just hear one thing from someone and it's hearsay and you believe it to be true, you're just not going to be successful in this business.
And then you'll start to believe that, and you'll be like, "Oh my gosh, this is hard. This is competitive." But you know what? Every market is competitive in real estate. Everything is hard. That's why it's worth it. And that's why the best are the ones who make money in this business. The best are the ones who are successful.
What you want to do is actually talk to people who have been there and done that, who are actually getting the results that you want, or have gotten those results before. And one thing a mentor told me that stuck with me over 10 years ago was that you want to trust, but verify.
And what he meant by that was when you're talking with someone at a networking event or REIA meeting, you want to trust what they're saying. You're not going to come off condescending or rude. But you want to verify the facts for yourself. What is actually real?
So, you can be successful at wholesaling real estate, and you have to believe in that. And you can't believe in the naysayers, the negative Nancys, and the negative Nicks who are, who are telling you that you can't make it happen, because you absolutely can. And we help thousands of wholesalers and flippers to be successful at this, so there's no reason why you can't do it.
All right. So, don't take what others say and take it literally, all right? Only listen to the people that have been there and done that and the people that are getting the results that you want.
Now, let's go to reason number three why most real estate wholesalers suffer and quit. And it's because they use a broken system.
So, we have a lot of wholesalers who want to get started in this business reach out to us, and I can't tell you how many we ask, "Do you know the process of wholesaling? Do you know how it works?" And the majority of them cannot tell us, at a high level, how wholesaling works.
And if you're using a broken system, if you don't understand conceptually what you're doing, then what's going to happen is you may do step one or step two, but step three comes around, and you're stuck, you're lost, you're fumbling around.
Also, there's a lot of wholesalers that get in this business and don't understand what strategy they're using to get deals. There's a lot of wholesalers that don't understand how many phone calls it takes to get a deal or how many offers it takes to get a deal. And so, if you don't have a system in place that's repeatable, that's actionable, that each day, you can take action on and then understand the result you're trying to get, then you're really using a broken system and you're just throwing darts into the wind. You're not throwing it at a dartboard. You're not going to hit your bullseye.
And that's why in our program, Pro Wholesaler, we use the MLS offer system. Because we can send offers on a daily basis on deals that are on the market, that are distressed, that are going to be wholesaled, and it doesn't cost any money to send these offers, doesn't cost any money to get these deals and to find them.
Whereas, a lot of beginners are spending 1,000, 2,000, 3,000, 5,000 in marketing every single month, and then still not understanding the whole entire process and fumbling through those leads, and wasting a lot of money in the process.
And so, the cool thing about the MLS offer system is that we know, on a nationwide average, about one in every 15 offers you send on a distressed house, you're going to get that deal under contract and be able to wholesale it and make about $10,000 on it.
And so, if you just do one offer a day, that's 30 offers in a month, you'll get about two deals from that, about $20,000. And that's what I mean. A lot of real estate wholesalers are using a broken system where they can't break it down like that.
And this is what you need to do in business. This is what the best of the best do. You have a goal, and you break it down, and you understand your daily, weekly, monthly actions to be able to hit your goal.
And so, that's what we help a lot of our students to be able to do. And so, if you're a real estate wholesaler right now, and you don't know exactly what you need to do today to get the next deal, then take a step back, evaluate what you're doing, and break it down, have a system in place, and then work on that system.
Now, reason number four why most real estate wholesalers suffer and quit. So, most wholesalers do not understand that failure is really just feedback. And this is important for more than just wholesaling real estate, guys. This is for life in general, for business.
And so, let me give you an example. So, there's a lot of people starting out in wholesaling real estate that will submit one offer on a property that they want to buy or get under contract. And then, guess what? That offer doesn't get accepted or it gets rejected, and then that person will be like, "Oh my gosh, I failed. This didn't work out. This is hard. Or this isn't for me."
What we need to understand is all that happened was that you just got feedback on the way towards your goal, and feedback is completely necessary. In the wholesaling industry, if you want to be successful, you need to be continually learning.
So every single offer you send that doesn't work out, that's a learning opportunity for you to ask, "What could I have done better? What could I have said differently? Who else could I have sent this deal to?" There's a lot of questions you can ask yourself to continually improve.
And it was actually a good friend of mine that shared with me that failure is actually a myth. And so, I asked him, "What do you mean by that?" And he said, "Well, most people will work towards their goals. And when they have a setback or an obstacle comes, they'll stop working towards their goal, and then they'll call that a failure. And they'll be like, 'Oh my gosh, I failed. That was hard. That didn't work.' So, it's a myth because most people confuse quitting with failure.
So you're either going to work towards your goals. If it's wholesaling five houses a month or wholesaling your first deal, set that goal and then make it happen, work towards it. And that path to get that goal isn't going to be straight and narrow. It may go up, down. You may have to adjust, get feedback, and iterate, and improve.
And so, if you take that, if you hone this into your life, into your business for wholesaling real estate, every single relationship, networking event, offer, phone call, and you take that as feedback, then you'll have that learner's mindset.
You'll always be learning, and you'll always improve, and you'll be successful no matter what because nothing's going to hold you back. So, this is why a lot of wholesalers suffer and quit. It's because they don't understand that failure really is just feedback. All right?
Now let's get into reason number five why most real estate wholesalers suffer and quit. And it's because they find houses first instead of cash buyers. So let's dive into this one. I actually got a whiteboard over here I want to bring out. I love my big whiteboards. All right, let's get this.
So, most amateur wholesalers, they suffer and quit because they'll find houses first instead of cash buyers. And let me explain why this is not optimal.
So, here's how it normally looks. So, this wholesaler, they'll get a random house under contract, doesn't matter where, what city, what state. It'll be completely random. And they'll get that under contract to wholesale. Then what they'll do is they'll market the contract to random cash buyers.
It's only after the fact after they get a deal, will they start to find cash buyers. And so, now they're scrambling around, they're running around like crazy, trying to find these cash buyers. They have a deal under contract that has seven or 14 days that they need to wholesale.
And now they're talking to these cash buyers like, "Hey, I got this deal. You got to come out to the property. You got to make it happen." And they're starting off the relationship on that foot. And they don't even know if this deal's going to work for the cash buyer as well, because it's a random cash buyer. And so, then they hope their random cash buyers want the random house.
There's a lot of hope going on. There's a lot of uncertainty. And as far as I know, I've been building businesses for a little bit, you can't build businesses on hope and randomness. Just doesn't work.
Now this wholesaler doesn't even know if this cash buyer is active, if they want more houses right now if they're buying in these zip codes. They don't know any of this. And it doesn't mesh. It doesn't work well.
There's a lot of hope, there's a lot of uncertainty, and a lot of randomness. And so, what happens now is that this wholesaler will now hope their random cash buyers want the random house. And so, this particular wholesaler, they may have built a list of thousands of cash buyers and have their email, but can't put a face to a name, and so they're just blasting it out. Once again, there's a randomness, it's a shotgun approach. You don't know if the deal's going to work. And now this wholesaler, well, they hope to maybe get paid a wholesale fee.
And so, let me show you what the winners do. Let's do this. Oh, we got the realestateskills.com official whiteboard. Got to love this technology. Here we go. All right. So this is why the pros succeed at wholesaling. So the winning approach is that we find our cash buyers first. And let me share why this is optimal.
So when you find your cash buyers first, what you're able to do is know your cash buyer's exact buying criteria. Because now you can actually talk to your cash buyer, understand what zip codes they're buying in, what price ranges they like to buy in, what's their bread and butter, do they like three bed two baths, or do they like two ones that are 800 square feet that they add square footage to.
So you can actually talk to your cash buyers, find exactly what they want, and now you can find the exact types of properties your cash buyers want because you know exactly what they want. And now this allows you to wholesale houses with predictability because now you can put a round peg into a circle hole.
Now it will mesh. And what you need to do is think of your cash buyer like your customer. What does your customer want? And now, once you find out that information, you can now find the exact properties that they want, and it will fit like a glove every single time.
Now this allows you to wholesale houses with predictability and confidently cash your wholesale checks. So there's nothing that's going to be lost in translation when we find our cash buyers first instead of a deal and get it under contract. Now this cash buyer, we already have rapport with them. They know who we are. We may have met them two weeks ago or gave them a call, asked about their buying criteria.
Then guess what? Two weeks later we give them a call and we say, "Hey Jerry, I found the exact deal that you wanted. I know it fits your exact criteria. It's in the zip code that you wanted. It's in the price points that you wanted. How about you go take a look at it today?" And it's that simple.
So, this is why you want to do it this way, of finding your cash buyers first, because then you won't be suffering, you won't be quitting. It'll make it a lot more simple and a lot easier. All right?
So that covers the five main reasons why most real estate wholesalers suffer and quit. And so, if you enjoyed today's video, if you liked this information here, definitely go to realestateskills.com and check out the Pro Wholesaler Program. Every day, we help people across the nation to build hyper-profitable wholesaling businesses, and we'd love to work with you if you're interested.
And so, if you've ever struggled, and you've overcame some things in the wholesaling industry, comment below, let us know what you broke through on. Or if you're still needing help on something, comment below, let us know, and we'll probably make a video on it and help you out. And don't forget to like the video, subscribe, hit the notification bell.
Comment if you have any feedback. Because guess what? We love feedback like we talked about in here. And I hope you have an awesome day. So, happy wholesaling, and I'll see you soon.
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