When asked about the process and practice of wholesaling, it can be very difficult to provide a complete and concise definition. And as the conversation continues, it becomes clear that wholesaling sounds like a very complex and challenging task to undertake. Even though many claims that it is the perfect way to enter real estate investing in a cost-effective manner, many prospects shy away because the concept just sounds overwhelming.
With that in mind, it became clear to the team at BatchDriven, that there needs to be a more straightforward way to define and explain the process of wholesaling. As our team tossed around ideas, we determined that the most honest and useful way to describe this aspect of real estate investing is to break it down into the five essential tasks or parts of the business. Understanding each of these pieces of the puzzle makes it much less complicated when understanding how it all fits together to become a great real estate investment option.
1- MARKETING
Marketing is only of the most essential concepts in wholesaling. Without marketing, you will have no leads and no potential deals. And with no sales, you are not making any money. So even when you are just starting out and don’t have a massive budget for things like marketing, you need to find creative ways to get your name out there.
As a new wholesaler, you will have far more time than dollars. So you need to invest your time in marketing yourself. One excellent option is to attend open houses and speak to the listing agent. This is a free way to meet other people in the real estate business and to tell them about your wholesaling business. You never know when a realtor will have a deal fall through and need to move a distressed property quickly for an owner who is in a jam.
You can also invest your time in marketing yourself on social media, cold calling, Craigslist, and a variety of other free or almost free avenues. But never forget that you need to continually focus on keeping your name in view of the public to keep deals rolling into your business.
2- MARKET ANALYSIS
You need to know your local market and any other markets that you plan on combing for deals. There is no one size fits all, perfect property that will always be desirable. Markets are continually changing and evolving, and you need to keep up with current trends and desires.
You also need to understand that even within your market, there will be distinct variables such as the price range and the location of the property. Some features that are must-haves in one area will be only a nice to have in another and not a deal-breaker if it is missing. All of this information will guide you when making a purchase. The more you know about the market, the higher your potential for success.
3- COMMUNICATION AND RELATIONSHIPS
You can’t have relationships without good communication. And relationships are what real estate is all about. You are helping people meet their needs. In some cases, the person is a seller who needs to turn a property into cash. Other times, you are helping a person find the perfect home or rental income opportunity. But the key is always knowing the person you are working with and understanding his or her needs and motivation.
Your business is not to build as many relationships as you can in a day, week, or year. To be successful, you need to focus on building quality relationships. And only as many relationships as you can maintain with a high level of attention to detail and focus. These are the relationships that will continue for years and provide not one or two deals but dozens over the course of the relationships life.
4- ADMINISTRATION
Attention to detail is an ongoing theme in real estate. You need to apply it to relationships but also to the documentation required to run your business. Ideally, you will have many deals in different phases of completion at any given time. And you need to be able to access information on each one quickly and efficiently.
Your clients are relying on you to conduct business in a professional manner. And that means having paperwork completed correctly and on time, meeting deadlines, and following up on promises. The only way to meet all of these needs is to be organized at all times.
5-CHARACTER
You are providing a service. You do not make widgets that can be examined for quality craftsmanship or functionality. So people will judge you and your work based on your reputation and your character. If you are taking advantage of people and being less than honest, someone will figure it out. And when that happens, your reputation and career will suffer or be destroyed.
There is nothing wrong with making good money on a deal that you worked very hard to create. But that profit needs to be obtained honestly and fairly. Once lost, you can never recover your integrity and good reputation. Protect that asset as much as you do your debit or credit cards.
Seeing the five parts of wholesaling broken down and explained in a single page of plain language makes it far less intimidating for potential real estate investors. You now have an excellent idea of the areas that you need to focus on to be successful in wholesaling and in building your financial independence through real estate investing.
