I have a confession. I really struggled with adding this lesson to the wholesaling course because I didn't want to have it discourage anyone. Still, it's essential that you have all the information (good & bad) to improve your odds of success.
There's a good chance for some of you that wholesaling real estate will be different than anything you've ever done before. You may have no real estate experience, no sales experience, no negotiating skills, and your people skills may be rusty.
Here's the good news... If you commit to working hard, changing your mindset, facing your fears, and developing new skills, you can genuinely become a great wholesaler no matter your experience is, and I'm here to help you do it.
Let me tell you a quick story that might put your worries at ease. When I was a young man, I had a job installing industrial tires on forklifts, and it was a hard, dirty, nasty job.
Now and then, I'd be working in the shop and see our salesman walking around in his nice clean polo shirt and khaki pants and would think to myself, "Now that's the job I'd like to have!"
A couple of years later, I got my big break, and my boss agreed to give me a shot as a salesman, so I bought some new polo shirts and khaki pants and hit the road to crush it as our company's latest and greatest "Salesman."
But there was one little problem... I Completely Sucked at it.
I remember vividly making my first cold call... My mouth was so dry I could hardly tell the receptionist why I was there, my heart was pounding, and the walls were closing in, so I handed her my business card and hightailed it to my car.
I wanted to be a salesman so badly, not just any salesman... A Great Salesman! So this was quite a blow to my master plan.
I could have quit and told myself self "welp, you gave it your best shot," but I didn't. I went next door and made another cold call, then another, I read sales books, a lot of them, and I kept at it.
Do you know what eventually happened?
I changed my mindset, kept at it, and eventually became the great salesman I wanted to be. Trust me when I tell you deep down in my heart, I know you can become the great real estate wholesaler or investor you dream of being. (seriously, if I can do it, anyone can)
One great thing about this website and my YouTube channel is I hear from many great people trying to better their lives through real estate wholesaling; I'm genuinely humbled by the emails I get and love being able to help people.
Another advantage is I get a lot of mental obstacles that hold people back from becoming a successful wholesaler. That allows me to create content that will help others avoid the same issues.
Let's take a couple of minutes and walk through the most common mental blocks people tell me they're having issues overcoming.
This describes an individual who is overanalyzing or overthinking a situation. It can make moving forward, or decision-making becomes "paralyzed," meaning that no solution or course of action is ever decided upon.
My Advice: Before you move forward on anything, it's a good idea to understand it; this course should give you a good foundation of how real estate wholesaling works.
Your next step should be to pull out a notebook, make a list of your next steps, and put a due date on them. (Example: attend first REI meeting by this date, go driving for dollars this Saturday for 4 hours, locate a successful wholesaler in my area and invite them to lunch by the end of the month.)
There is a saying that goes like this... "If you wait for all the lights to turn green before you head to town, you'll never get out of the driveway."
Please make a list, set dates for completing them, and then take action. Will you screw up? Probably. Is making mistakes something everyone does? Most Definitely! But that's how you learn.
Not to be mistaken with analysis paralysis, the fear of taking the next step is different. You most likely know the wholesaling process, but fear is holding you back. Like people afraid of public speaking know how to speak, they're just scared of doing it in front of groups of people.
My Advice: Find ways to start dipping your toe in the water, and eventually, you'll be swimming. At a point in my sales career, I was expected to give safety training classes to companies that had purchased the training for their employees.
I was terrified of public speaking but needed to find a way around it. I found that if I arrived early before any of the employees took the training, I could stand in the front of the room and talk to them individually as they came in.
We'd casually talk, I'd try to joke around with them, and then by the time the training started, I felt comfortable talking to them as a group. So how can you dip your toes in the wholesaling waters?
Get on Craigslist and call people selling their house "by the owner," ask them about the home, and set an appointment to see it. Don't panic. I'm not asking you to negotiate with them. I want you to get comfortable talking on the phone and going to see houses.
I'm confident you'll be ready to take the next step once you've done this several times.
Impostor Syndrome is a psychological pattern in which one doubts one's accomplishments and has a persistent internalized fear of being exposed as a "fraud."
This plagues new wholesalers often, and they're afraid of calling homeowners or seeing a property and being exposed as not knowing anything. They imagine saying something wrong and having the other person yell, "Ah, Ha, You're Fake."
My Advice: Be yourself... Please don't act like you're some big-time investor or have been doing it for years. People like honesty more than anything, so just be truthful with them and say something like this. "You know I'm just getting started in real estate investing, and when I saw your house, I thought it might make a great investment for me."
Everyone has been new at something many times in their life, and people rather you be honest than feed them a load of bull. So don't be an impostor, be yourself, and everything will be okay.
A feeling that you are not as good, intelligent, skilled, etc., as other people.
Have you watched wholesaling videos on YouTube? Some might say, Max Maxwell, Kent Clothier, Cody Sperber, Jerry Norton, and many others with wholesaling-related channels are probably better looking, more experienced, and perhaps a little funnier & entertaining than I am... but yet some people still watch my channel.
Do I feel inadequate? Nope, I think I bring something different to the table that can be helpful for people getting into the business, and the same can be true with your wholesaling business.
My Advice: Don't worry about others in your market, or if people think your good enough, worry about what you're bringing to the table. Do your very best to help distressed homeowners find a solution to their problems, and strive to deliver great deals to real estate investors.
Educate yourself, finish this course, read wholesaling books, and keep striving to do your best; before long, the fear of being inadequate will fade away.
Fear of Market Oversaturation: market oversaturation is a situation that arises when the volume of a product or service in a market has been maximized.
Sure, it would be nice if you were the first person to come up with the concept of wholesaling real estate and you had no competition, but that's not the reality. I will, however, share something with you that might ease your concerns. (a lot of wholesalers aren't very good at what they do)
Many don't take the time to learn this business, and they "wing it" or try the "fake it till you make it strategy, but in the end, they fail due to a lack of education.
My Advice: don't worry about all the people you see in Facebook groups saying they're working in your market, and don't be concerned if you see a lot of "we buy houses" bandit signs in your area... Almost all of them are rookies and don't know what they are doing.
Learn the business, be professional, and treat people right, and you'll quickly find that there is less competition than you thought.
When a wholesaler puts a house under contract and cannot find an end-buyer interested in the property, that's when the fear sets in.
This is 100% avoidable by learning how to correctly wholesale real estate! Many coaches, books, and bad Facebook advice tell you to go find a "good deal," and the buyers will line up; this advice couldn't be more wrong.
My Advice: Start building your cash buyer list from day one. Knowing who the real cash investors are, what they're buying, and where they're buying is crucial to your long-term success.
Armed with this knowledge, you know where to focus your marketing efforts and how much your investors pay for properties. Then when you get that first property under contract, you won't panic about finding a buyer.
This is the fear of finding a motivated seller, then, because of an error on your part, having the seller not move forward with the transaction.
Yes, it can be traumatic; you've marketed, went driving for dollars, skip-traced owners, sent out letters, went to look at houses, negotiated a price, finally you have a deal, and then... the seller backs out. F*@#!
It happens to the best of us.
My Advice: Shake it off, have a beer, and when your blood pressure gets back in the normal range, reflect on what you did right and wrong.
Sometimes people are just weird, and there is nothing you could have done differently, and sometimes maybe you didn't do your job right. Did you take the time to build rapport? Did they make you think there was a deal so that you would leave?
Self-reflection is excellent, so make sure to do it, but don't let the fear of losing a deal prevent you from getting one in the first place.
The fear you get the moment you think about picking up the phone to call an investor or homeowner.
In my mortgage days, I had to make a lot of phone calls, and in the beginning, it wasn't easy, but as time passed, it became so routine I didn't give it a second thought.
My Advice: Practice, Practice, Practice! I suggest in the cash buyer section of this course to call FSBO (for sale by owner) listings off Craigslist in another city. Just call and ask questions about the house, about their situation, and why they're selling.
Tell them you're moving to that town and you're making some calls on a few properties that caught your eye. It's easier to make calls when you know you'll never have to meet them, and you won't screw up a deal because you say the wrong thing.
After doing this for a while, you won't hesitate to call someone locally that has shown interest in selling their property.
The fear of knocking on the door of a property owner and having them yell at, physically attack, or shoot you.
Before I started rehabbing houses or wholesaling, I briefly did occupancy inspections on homes in foreclosure for mortgage companies. Now to say some people get upset when they see you on their property, taking pictures is an understatement.
However, if you approach it correctly, most people will be okay with you knocking on your door.
My Advice: I have only door knocked a few times on houses sold at the sheriff's sale because Michigan has a six-month redemption period in which the owner can sell their property. But if I were to door knock, I'd knock, take a step back from the door (so they don't feel threatened), and try not to be a slick, fast talker.
Explain that you're there because you couldn't track down a phone number for them, and you wanted to speak to them about buying their property.
I'd also say something like this... "I was heading to an appointment in the area, but I'm a few minutes ahead of schedule, so I wanted to swing by and see if you were home. Unfortunately, I don't have time to stay and chat right now, but I wanted to give you my card, so if you're interested in selling, you can call me to schedule a time to talk."
This approach accomplishes two things.
#1 It's non-threatening and doesn't make them feel like you're trying to sell them something or attempting to get inside their house.
#2 It gives them time to think and check out your website. If they are interested in selling, they'll be more comfortable inviting you back because they know you didn't try to pressure them the first time you were there.
Always put yourself in their place and remember if your house was in foreclosure, your spouse had just passed away, or any other event indicating you might be a motivated seller, would you want someone knocking on your door?
Be kind, polite, let them know why you're there, and then give them the option to set up a future appointment with you.
The fear of working with someone who uses you for their own gain in an activity meant to benefit both of you.
Unfortunately, there are unscrupulous people real estate investing business that will double-cross you, and you need to be cautious.
My Advice: Do your due diligence before you partner up with anyone. Find out how long they have been in business, ask other wholesalers in your area if they've heard of them, and always CYA (cover your a**).
If you're doing a deal together, always make sure your name is on the paperwork so you don't get cut out of the deal. Always include yourself in conversations with the buyer, seller, and especially the title company, so you're confident you'll also get a check at closing.
And if you still get double-crossed? Don't start plotting your revenge, be the bigger person. Shake it off, learn the lesson, and find the next deal.
The fear of being cut out of the deal by the investor.
While writing this page, I took a short break to stretch my legs and scrolled through YouTube on my phone. A video that caught my eye was titled "Why you should stop building buyers lists."
The creator of the video (who had a ton of followers) said that most cash buyers only buy once, have a terrible experience trying to rehab the property, and never buy again. He continued by saying these people pay more for houses, and you should get homes under contract and try to market them to these "new investors" for bigger profits.
My Advice: don't take his advice... If you fear people going behind your back, take the time to build solid relationships with reputable investors in your area.
Attracting buyers on Craigslist, Zillow, Facebook, Redfin, and other online sources will bring you plenty of buyers, many of whom wouldn't mind screwing you to save a buck.
I build relationships with people who have been investing in my area for years and have a solid reputation. I can also tell you this, in all my years of wholesaling, not once has one of my investors tried to cut me out of a deal. In fact, I've taken deals to investors they already knew about, and they chose to work with me because of our relationship.
Final Thought About Common Fears
Trying and failing is the path to personal growth as long as you look at it from the right perspective. Sure, you could easily be bitter when you fail or have fears preventing you from moving forward; sure, you could take it out on your family or give up... but there's a better way.
You can accept the fear and know that everyone that walked this path before you faced similar worries and overcame them... it's the price of admission to the private club to achieving success.
You've already taken the first step by starting this course, and when you're done, take the next step, and then the next, and keep going until you achieve the lifestyle and income you envisioned when you started this journey.
I want to cover one last thing before we move on to the next lesson in Wholesaling University, the skill set of a "Professional Wholesale Real Estate Expert."
Now you don't need to master these things before you start wholesaling, but they're skills you should continuously work on to be more successful in your wholesaling and real estate investing career.
I have been a licensed real estate salesperson in Michigan and Florida, so I can tell you from personal experience the one thing they don't teach you... How to market yourself. In fact, most realtors struggle with marketing, which is why most only do a handful of deals a year.
Honestly, anyone that chooses a career in real estate be it as a realtor, investor, property management, or even real estate contractor, should take a lesson from the wholesaler's playbook. And learn how to market for motivated sellers and real estate investors effectively.
In this day and age of technology and social media, people are bombarded with marketing constantly, and you always need to be thinking of and trying new ways to attract customers (we'll talk more about this in later lessons)
This is a term used to describe the process of locating a fugitive that can't be found at their place of residence or usual hangouts. "Skip" refers to the person being searched for (derived from the term "to skip town"), and "tracing" means the act of locating the skip.
Skip tracing is most often used by bail bondsmen, bounty hunters, repossession agents, private investigators, and debt collectors. Skip tracing, however, is a skill you should develop as a professional real estate wholesaler.
The very best vacant houses lead is the one owned by someone that's hard to find because chances are no other wholesaler or investor can find them.
Do yourself a favor and put skip tracing on the list of things to learn; it will pay off!
Many people that start wholesaling are so anxious to get the first deal that when the homeowner agrees to sell, they agree to whatever price the owner requests. Then three weeks later, when the wholesaler hasn't found anyone that wants the deal, they're trying to figure out what went wrong.
Here's something you need to remember... In real estate, you make your money when you buy, not when you sell.
Let me clarify. This means that your purchase price is the main factor that determines your profit later on. You can't rely on an appreciating market, wishful thinking, or construction coming in under budget to create your profit margin.
Always remember, as a professional wholesaler, you bring value to your investors by knowing how to negotiate a great purchase price.
Often how a person acts is more important than what they say, so make a point to watch their body language. If someone keeps looking at their watch or smartphone while you're talking, you're not saying anything they're interested in, so try something different.
Many people like listening to themselves talk so much they don't take time to listen or observe the person they're conversing with, so don't make this mistake.
Become a student of human nature and pay attention to what people are saying, not only with their words but also with their bodies.
Being a wholesaler means you'll have to connect with people, build rapport, and develop relationships. Learning how to interact with others is a valuable skill not only for real estate wholesalers but for any human on the planet.
The best book on this subject, hands down, is "How to Win Friends and Influence People" by Dale Carnegie; I highly recommend you buy a copy and read it cover to cover.
Local Real Estate Expert
We'll discuss how to pick your market in this course, but now I'll just say that when you choose an area, learn everything about it.
What investors are buying there, what they're looking for, the price of homes, the rental rates, property managers in the area, and whatever you can do to become the local investment expert.
This knowledge will help you build rapport with sellers in the area and let your investors know you're not fooling around and mean business.
Last but not least, you should know how to inspect a house, and I'm sure many books and cheap online courses will explain the basics. I'm not talking about getting a degree in structural engineering, just the basic things you should look for when walking through a property (maybe that will be my next course).
Taking the right pictures while you're at a property is also an important skill to have. All the time, I see wholesalers taking horrible pictures, not enough pictures, and the wrong kind of pictures. Luckily for you, I cover property walk-throughs in a later lesson.