Most folks getting started with real estate investing have one question looming in their mind: when am I going to be able to put my knowledge to the test and do some actual wholesale real estate deals?
Real estate wholesaling requires a whole set of skills and strategies not every would-be entrepreneur comes built with. And it can be difficult to know –- without jumping into the world of wholesale real estate –- to know whether or not you’re truly ready to begin your quest as a wholesale real estate investor.
While some skills and attributes of a wholesale investor are better learned after you do your first deal, here are five key questions to ask yourself before you start acquiring those wholesale real estate deals to ensure you’re as prepared and ready as can be for your new venture.
4 Questions To Ask Before Going After Wholesale Real Estate Deals
1. Are you a relationship builder?
Successful investors who specialize in wholesaling real estate know building a list of buyers isn’t done simply through running marketing campaigns. It’s through building relationships with professionals in the industry, and then doing your best to align properties you find with those professionals.
This means viewing other real estate investors, like you, as partners instead of as the competition. Your plan is to not sell just one property, but build a relationship. Are you currently meeting with other real estate professionals such as hard-money lenders, other wholesalers, and real estate agents on a regular basis? Do you have a robust Rolodex of names you can reach out to when you find wholesale properties?
These are important questions to ask, as constant communication — and offering to give before you receive — will develop genuine trust with your network and benefit your business long-term.
2. Do you have your lead-generation systems setup?
Lead generation is a vital part of any investing business, and doubly so for real estate wholesalers. It is the lifeblood of a wholesaling business, and if you want to succeed in wholesaling, you need to put effective lead generation marketing systems in place long before you look for your first deal.
This means entertaining queries such as:
- Do you have a website that builds credibility and tells your story?
- Do you have a landing page that collects email subscribers/potential home buyers?
- Do you have an automated email sequence that shows potential wholesale buyers how you can help them find deals?
- Do you have thriving social media channels (Facebook and LinkedIn, at the least) that establish your authority AND point people back to your lead acquisition pages?
- Do you have a single proven system (Craigslist, direct mail, bandit signs, etc.) to help you find motivated sellers?
The more systems you have in place, before prospecting for wholesale real estate deals, the quicker you’ll move closer toward a profitable bottom line.
3. Do you know how real estate wholesaling works?
Before you start your real estate wholesaling efforts, you want to make sure you know the details of the process, from top to bottom. You may not have the experience of wholesaling, just yet, but knowing how the mechanisms work can help you become much more confident when you talk to home sellers (even if you’re scared of such an encounter).
This means knowing:
- What a purchase and sale agreement is
- How the timing works on a wholesaling deal
- What happens if you can’t find an investor to assign the contract to
- How earnest money works
- What the title company’s role is
- How a home seller is protected in a wholesale deal (and what their rights are)
If you don’t know the answer to a question, that’s okay. Be honest and humble enough to admit you aren’t sure of the answer to their question and will get back to them once you have the data they need.
Confidence in dealing with a seller (and potential buyer) is all about doing your deal homework and being able to inform — in a plain-spoken way — how the process works.
4. Think big
While you may have the knowledge and resources to become a great real estate wholesaler, it’s also important you have the right business mindset. In Alex Pirouz’s article The Importance of Attitude for Business Success, for The Huffington Post, he mentions a couple of must-have mindset tweaks that can exponentially boost the success rate of your business venture:
- Choose to be positive: What matters is how you respond to the situation, not the situation itself. A negative attitude can ruin your relationship with potential customers and all those you communicate with, not to mention sap your energy and motivation. Keep a positive outlook and feel confident you will perform your best and succeed.
- Be determined and persistent: State the reasons why you must succeed with your wholesaling venture. Maintain a hopeful attitude. Learn more selling techniques. Change those that are not working. Focus on the wins. Challenge obstacles and use them as opportunities to win.
- Maintain a forward-looking mindset: Get inspired by the picture of your future success, and your sub-conscious will work overtime to make it happen.
To become successful in real estate wholesaling, you have to possess the communication skills needed to work well with different types of people and to commit yourself to continuously provide effective customer service satisfaction. After all, real estate is a relationship business.
Preparation isn’t just important for the Boy Scouts, it’s a vital component to any business venture, and that includes real estate investing. While it’s important not to spend more time studying than actually doing, it’s helpful to put yourself in the best position possible with a new business venture.
And when searching for wholesale real estate deals, you must ensure your business systems and partnerships are in place, along with a key understanding of wholesaling. With knowledge and preparation comes confidence, and with confidence it’s amazing what you can accomplish.