Burning Question?

We actively market to absentee owners, probates, estate sales, for rent signs, garage sale signs, word of mouth, pre foreclosures, divorces, expired listings, fellow wholesalers, MLS listed REOs and individual sellers.

We use our 25/1 offering system through our agents, mailers, phone calls, door knocking, bandit signs, go to foreclosure auctions, door hangers, go to REI meetings, business cards, flyers and constant networking to keep our pipe line full.

True, you only encounter one seller at a time but you DO IMPROVE your skills and knowledge each time. If something is not working you change the contact strategy and your offering strategy.

Believe me there are investors in your area making money, you just have to adapt, overcome and succeed. What we do is easy. Doing it takes systems that allow multiple, multiple offers (Most WILL be rejected) Oh well, on to the next!!

Good Luck,
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Think of it like batting averages. A good batting average is 300. So 7 out of 10 times you fail. I don't think that you want to give up so easily. I have been at this a little over a year. I have negotiated with sellers and come close, but no deal. However, I now have several accepted offers and hope to close on them soon. Keep batting and like Michael says market, market, market, and build that buyers list!

Thanks, hope your points can help wholesalers who are struggling.

The people who are doing 50 deals a month are most likely in multiple areas and are well experienced. I highly doubt they are in one area. They also have a team of people working for them.

At the peak of our marketing we were getting 30 calls on our bandit signs PER DAY. Most were duds, but we ended up with a few solid leads every day. So it would be easy to get 30+ deals per month if we had the capital or a strong enough buyers list!

As Matt Larson says, if you want 10 deals in a month, you're going to have to make on average 250 offers that month (25 offers per deal). Always break your goals down as much as you can, it's a whole lot easier to take one step at a time. Just concentrate on your first deal, then start worrying about your second.

Here is wholesaling broken down as simple as I can think of: Multiple Low Offers + Solid/REAL Buyers = Deals

Start in your own backyard for your first 10-20 deals, then start expanding! Eventually you will get to 10+ deals per month, then more, and more, and more. It might take a year or two to get to that point, but no one ever said this didn't take time or work! It's well worth it in the end.

Hi Everyone thanks for leting us in on this info many thanks, Jim

The way I look at it is this: Real Estate Investing is not something you can write a step by step guide, give it to somebody , and then watch that person start to cash checks. You hear this over and over, but you really do have to do the work. "The work" is not mindlessly doing the things DG tells you to do. "The work" is getting out there, intelligently applying the DG methods, noticing what works and what doesn't, and tailoring your strategy to those observations. I have not closed a deal yet, but I know that I am not finished doing the work necessary to make that happen. My first deal will come when I've put in sufficient work.

Networking is also such a HUGE part of REI. If you are a master networker, then you will have an easier time finding/closing deals. Since your seller list is always changing, so should your network. In other words the networking process never stops.

If you're having problems finding deals, building your buyer's list, etc., hang in there and keep putting energy into building your business. If you truly put dedicated energy into something, it has to come back to you at some point, so keep pouring it in!

Then I think wholesalers should toss aside the 50+ months as a bench mark for success. That only applies when there is access to large amounts of cash and a team of people working in multiple areas. In reality, a single wholesaler/investor is limited to their own abilities.

You are limited to your own abilities if you refuse to team up with others who can shorten your learning curve and help you. DG teaches that you have to build your own team, that's part of the process.

As for people with money to invest, you have to find them. Find out where they congregate, and crash the party (so to speak). Try REI clubs for one. Many investors with money go to them specifically looking for wholesalers and bird dogs with deals they can invest in ASAP. Some clubs even have a forum where you can post deals you get under contract. You van also place some ghost ads online to "fish out" the investors, and get them to call you. My point is that there is an avenue to success for everybody somewhere out there, you just have to find it. Good Luck!

I don't know where this number of 50 deals a month comes from. There are very few people in this country that do 50 deals a month. It may be some kind of benchmark for some but you can make Good money doing ONE a month if the fee is $20,000! That is $240,000 a year. I think most wholesalers would be happy with that!!

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

The 50 comes from Matt & Dean, it is always mentioned as the minimum amount they do every month. In any case, most would be delighted by doing 1 a month, but the overwhelming posts I have ready here haven't done a single deal. In my area, the wholesalers that I contact usual respond that they don't have anything and will let me know once they get something under contract...but when?

This is why I'm asking this question. Hoping that someone can shed some light and help the wholesalers achieve better success.

Paul - remember too there are many ways to make money in RE. Wholesaling is one way. I personally started with buying rentals through owner financing (just posted on that separately).

It's the passive way to generate income. Find a place, negotiate a small or no downpayment, rent it out for more than your expenses. Maybe generate $400 per month, and it may take a year to find that perfect deal. But once the deal is done and the place is rented, I spend 30 min per month checking the rent is in my bank account and paying the bills on-line. 30 min for $400 per month, every month. In Year 2 repeat. In Year 3 repeat again. Much better return for your time in my opinion.

Of course there may be hiccups on the way but it can be managed (property manager for tenants, home warranty for things breaking).

On top of it all, you get a tax break now, and potential appreciation over time, in addition to the cash flow.

It can be done!!

Good luck,

- Tom

YOu have to be realistic and just start doing the work, and like Michael said, It only takes one really good deal, or a few okay deals to make some decent money. Even if you have 3 deals worth 1000 each, that is $3000 dollars. Not too shabby!

That is exactly the diretion I'm planning to take. It is more doable and the results are more realistic. Thanks for the advise!

I am going to say something that is not going to make you happy. But it is the gosh awful truth no matter what anybody else says!

You live in Los Angeles. And it is friggin' (moderator, do not censor! This is not a cuss word!) hard here!!! What works in most of the rest of the country, will VERY, VERY rarely work here! It just doesn't! It is NOT YOU!

The good news is that you can develop techniques that will work in other areas. Most of us that live here and are investing have been forced to do most of it in other states. Just like Tom, above. He has said that most of his is done in VT (hence his name). Chad Merrihew, out of state. Ali, Valerie, and Keith in OH. Tammy and I, numerous areas of the country. Yes, Tammy and Keith have done some deals in CA, but Keith's are not in large urban areas and Tammy does most of hers out of state.

I know that there are some investors who are doing it in CA but most of them are in smaller areas.

With internet access, it makes it so much simpler. You don't even have to go there. Just build a good team and they can help you. If you have been learning all your technique here and fighting this market, you will find that it is REALLY much easier once you go somewhere else!

Good luck!

Karen

Do you know what it is that makes LA such a difficult market? I mean, we have such diverse neighborhoods and unlimited supply that one would think the possibilities are endless. But those of us here in the trenches know better.

Basically, I'd like to know what the main problems are with the LA market and see if other areas with similar circumstances can be avoided as well.

Agreed with Michael and Karen,

50 is NOT the benchmark. Just because Dean and Matt are doing that does not make it the benchmark. I would say 1 a month is a GREAT start, better than most beginners actually.

And if your back yard isn't working for you at all, then maybe you should pick a new area to invest in and stick to it for a while until you get a feel for it. I have no experience out in LA, so I can't relate, but I hear it's tough out there!

Don't give up!

I honestly think there are two main reasons. Everyone may not agree with me, but this is what I have concluded after almost three years of banging my head against the wall here.

The majority of people here are taught not to trust easily, if at all. They (again, not all but the majority I have found) would rather just do absolutely nothing to try to save their credit, etc and just let the bank have the house back. They would rather do that than risk being conned. (Please, no one start telling me you have to earn their trust. If you have ever met me, I do not come across as smarmy in any way!)

Second, many of the people here think that they are SO savvy and they will negotiate and negotiate until there is no way to make a deal work! They don't GET it!!! Creative processes have to have a certain structure or they don't work!

I have had potential L/O sellers that I am able to offer their FULL asking price and, of course, save them realtor fees and they still want half of MY option fee from the seller and for me to put half of my half in an escrow acct and if the buyer doesn't pull the trigger, they get that, too.

Another one who had four props that I could have gotten T/Bs for in two seconds and made over $100k in option fees but he wanted to price the houses so high that there is no way they would appraise in the end for the T/B to be able to get a loan. His answer to that? a smug "Then I will just take the houses back and they can move out!" The T/Bs would just lose all that money. Not with me, he won't! I told him I did not want to work with him.

Again, this is the assumption that I have come up with. Otherwise, I am totally bewildered. Someone else may have other opinions.

Karen

I didn't even give my opinion of the 50 deals/month!

Come on! Those are Superman numbers! In your first year, even if you get 2-3 that is good! (And this is countrywide). It just takes a while to get comfortable and to really know what you are doing and to build your momentum. Just like Michael said (and maybe some other people (i keep getting interrupted and lose my train of thought) you just keep doing it and doing it and doing it and...

After a while you will start getting calls from people whose seeds you sowed 1 1/2 yrs ago and others. You just have to NEVER say die! NEVER EVER QUIT!!!

As far as you not dealing with repeat customers...That customer may not be buying/selling again soon but he/she knows people who know people. Again, the ripple effect.

Make sense?

Karen

First of all, traditionally, Southern CA real estate appreciates like no other area of the country, so sellers have a different take on real estate than in other parts of the country. Also, Price/Rent ratios are higher here so it is harder to make properties cash flow. The people I see having success are people who have been doing it a while and have their systems and teams in place. Realtors deal with them because they have a track record and the realtors know they can close a deal. They are marketing machines. I know of two investors in the San Bernardino/Riverside area, which is a lot more fertile in terms of deals than San Diego, and they did 40 deals total last year. One of them is a real estate broker. Among one of their marketing methods is direct mail. They sent out 88,000 pieces of direct mail last year. So for the sake of discussion, lets say they got all their deals from direct mail. Normally, 1-3% is a reasonable rate of response for direct mail. Their response rate was .05%. I spoke with one realtor/investor last week and he said he put in 260 offers and got one deal last month. If you want to play in southern CA, bring your A game. Just my opinion, I may be wrong.

I my do an average 1-2 per month for the year so 50 is all out crazy. What do they say about pigs getting fat and hogs getting ? Don't be a hog and the riches man in the graveyard. Now go get some.

Everyone above has said it all about wholesaling/finding deals and I believe Karen's assessment of LA/Southern CA is accurate.

Keep networking locally at REI clubs for buyers but begin to look to expand to other areas out of state to find true cash flow deals with the best ROI and build a power team there. Show these deals to the people you meet at REI clubs and look to create repeat buyers. There's lots of money in CA which can be used for out of state ROI deals.

Just keep pushing through while learning and taking action. Due to the fast appreciation in CA most of us grew up thinking REI is a get rich quick plan but the reality is that it is a long term plan for financial freedom which involves "paying your dues" along the way.

Thom

While Jeremy and I have been strictly buy and hold investors since we started 5 years ago many investors to this site have come and gone because they feel assigning won't work in their area. Don't get me wrong Assigning is a great way to go for instant cash, but it requires you to jump back in and do it again and again, while on the other hand B/H's your net cash flow continues to build from deal to deal. It does come with headaches though as renters have a whole set of diff problems that you must learn to deal with in a fair and honest way.
Either way you look at it, both avenues will build you wealth. It just depends on do you want it now or down the road...Jan