Wholesaling: Getting Started

I’ve hinted previously that at some point I may begin the journey of a thousand steps down the path to becoming a wholesaler.  That time is now.  After a resoundingly refreshing Summit in San Francisco in November, and between a lot of conversations over the years, I realize that the only way for me to continue to build my real estate wealth, I need to take control of my deal flow!

There are a lot of pre-action questions that Wooded Pathoften get asked on what you should do before you begin wholesaling, or in fact any part of real estate investing.  The questions tend to be non-essential questions: Entity Structures, What-If Scenarios, Whom questions.  But the biggest question that is not often asked is the biggest one!  What are my goals? I’m going to answer these questions!

Wholesaling Goals:

  1. In the next 6 months generate a lead funnel that closes 1 wholesale deal a month.
  2. Have marketing dollars flowing to three separate markets.
  3. Systematically break down the process so that I can employ a full-time acquisition manager and contracted Market experts.
  4. Generate $20-$30K Per wholesale fee.

All of the questions in the intro will be answered by my goals!  In my mind’s eye these 4 goals make a pretty good road-map to where I am going and what moving parts I need to solve.

Which Market to Start In

Amazingly enough, I have heard of greater success from wholesalers who are doing it outside of their backyard so to say.  One gentleman I met a couple of months ago lives in the area and is doing wholesale deals in Ohio!  A couple of investors I’ve met recently are wholesaling down in the Greater LA area.  In Vegas, I met a virtual wholesaler who was doing wholesaling on the East Coast. I’ve met very few wholesalers (1 or 2) who have had success in their backyard!  Run an experiment yourself, call these “wholesalers” on Craigslist or who have posted bandit signs and ask them if they have any deals in their funnel.

Here’s the take-away that I got from meeting these people. By going out-of-state and away from home you have to develop systems first and think about your strategy!  You have to systematize what you are doing because you can’t just drive to the home and take a look at it.  But how do you identify the market you want to work in?

I spent a couple of days compiling data from Redfin.  I pulled up some local markets and did a broad search for 3/2 homes to determine mean, median, and average sales prices.  Knowing that one of my goals was to reach a $20-$30k/deal wholesale fee, I knew I had to look at places that were selling for more than $400K.  Using Redfin you can download in csv format the houses that match your criteria, a couple of Excel formulas later I was able to quickly show a few areas local to me that the median price was closer to $600K!  At 600K picking up properties at a 35% discount means I’m targeting properties I can be in at $390K and sell at a 30% discount to rehabber for $420K!

List Source Options
List Source Options

Once I had those price-points, I used listsource.com to identify which of the markets had the biggest sized NOOC, with 45%+ equity.  I settled on the one with the biggest sample size.  It gave me almost 1650 names!


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Deal Flow Projections:

1650 x 5-1% response rate = 82.5 – 16.5 leads

1 deal per 20 leads or 1/20 = 4.125 to .825 deals



That gives me a good idea that within 6 months I should be able to do 1 to 4 deals off of this list! Great! You know what though, and this something that has always confused me and I’ve never really seen an answer too is with these percentages, is it per-month or per mailing cycle?  Should I be expecting 16.5 leads a per mailing? Or 16.5 leads over the course of the 6 month program?  A valid question.  I’m starting off with the assumption that it’s going to be per mailing x 6 mailings.

82.5 – 16.5 x 6 =  495 – 99 leads

495 – 99 x 1/20 = 24.75 – 4.95 deals


24 – 5 deals in a six month period would be fantastic! With a $30K per deal goal it could net me $720-150K!  That would be huge and transformative.  But to bring the realism back, if it over the course of a 6 month mailing it could leave me at $120-30K.  Still pretty exciting numbers! I guess this is why people wholesale!  Not a bad start to making the decisions that are involved in becoming a wholesaler.

Over the course of the rest of the week I’ll continue to comment on my thought process as I design my wholesaling path. We’ll look at all the different aspects that a wholesaler should be looking at and asking questions about.  Don’t forget to subscribe to the blog, and follow me on my path to real estate wealth by becoming a wholesaler!



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