Make Money with Other WholesalersPosted on July 28, 2014 by
Do you think that the other wholesalers in your town are your competition? Not if you position yourself as a useful ally. Other wholesalers can be wonderful resources to help you grow your wholesaling business. So what do I mean by positioning yourself as a useful ally?
First of all, be useful. Bring value. In wholesaling you are either providing the Deal (the property at a great price) or you are providing the Buyer. Or both. If you have one but not the other, you may want to consider teaming up with another wholesaler.
Example #1: You have a friend of a friend (Billy Buyer) who has just inherited $100K and wants to buy a fix and flip property at a wholesale price. You have heard of wholesaling, but haven’t really done any deals yet, and haven’t been doing any marketing – so obviously you have no deals that are your own. You have another friend (Harry Wholesaler) who has started marketing for wholesale deals, and has found a sweet deal – way under market value ($55K) that would work great as a fix and flip and meets Billy Buyer’s criteria. But Harry Wholesaler has no buyers. So you step in and put Harry’s deal under contract with an assignment (for $60K total). Then you go ahead and assign that deal to Billy for a FEE (for $65K total). $65K is still a great deal for Billy Buyer and you and Harry make $5K each for putting together the deal.
Example #2: You have just started marketing for motivated sellers and after talking to 15 sellers that aren’t that motivated you find one that is. You get your 1st deal under contract and it looks really good on paper. You don’t have any buyers yet but you do have a REIA meeting to go to the next day. So you pitch it at the meeting. Another wholesaler there says he has a buyer for your deal. Ideally, you want to give him ONE day to pitch it to his buyer before you blast it out (Craigslist, Zillow, etc). So the next day, the other Wholesaler say his buyer wants it. You can write up an assignment contract with you and their names on it as well as the breakdown of the assignment fee – OR – you can assign the contract to them and they can assign it to their buyer (much easier on one contract IMHO). So – you have your property sold in 2 days which is great and you didn’t have to do any marketing for buyers. Not bad.
Example #3: You have been doing wholesaling for a while now and have a good buyers list. A good buyers list would be 200+ buyers and at least 5-10 buyers that have actually bought something from you. An acquaintance from a Facebook real estate group (Frankie Flipper) asks you if you have any buyers in a particular side of town because they have a deal under contract (and they never usually work that side of town). They say they are in it at $50K and whatever you can get it sold for, you guys will split it 50/50. So you get the details from them – you don’t blast it out because you are not technically under contract, but you do mention it to your most serious buyers. If they show interest – then you put the deal under contract yourself and then negotiate with the buyer and assign it to your buyer or do a double close.
I could show many more examples of how you can work with other wholesalers. I once was told a story of a girl that wanted to get into wholesaling and did her 1st deal by simply calling all the bandit signs on the side of the road advertising deals and asking them what they had for sale and asking if she could mention this to her buyers. Then she would call all of the “I BUY HOUSES” bandit signs and mention that property until she found somebody interested. Turns out she was able to do a deal and make $4K by doing this. Pretty funny and creative.
Don’t let any mental blocks hold you back from doing deals. Just get out there and make it happen. Working with other wholesalers is a great way of finding deals without doing any marketing for either buyers or sellers – but it works best when you have one or the other (Deal or Buyer – directly). If you need any additional help – go to: www.HowToWholesaling.com – for more tips, tricks, and helpful information.