The Mindset Needed To Start Wholesaling
Updated: Dec 18, 2018
Some words of advice for anyone looking to jump into real estate with wholesaling
Starting anything new is quite an uphill challenge. What’s the saying…’you must do something for 10,000 hours before you perfect it’? Something like that. Well, it holds true for almost anything, but not everything. I’ve been crafting my skillset for soccer for over 10,000 hours, and believe me, I’m nowhere near perfect.
Real estate is no different. I’ll bet Matt Faircloth still makes some mistakes here and there, and I'm sure he's been at it for more than 10,000 hours. Grant Cardone isn’t perfect and he’s quite successful at almost anything he does. Life, just like anything worth pursuing, is a game of mistakes, disappointment, discouragement and failure. If you can manage to take consistent, productive action in the face of those four beasts, success is inevitable.
My name is Michael, I began wholesaling 5 months ago and I’ve recently formed a new company with my partner, John Smart. I’m writing to you all today to let you in on the reality of wholesaling if you are thinking of pursuing that route, and to inspire current wholesalers in the startup phase. Although I am not successful by my standards in the industry, I have the proper mindset that gets me closer to my goals each day. Below you will find advice and words of encouragement. I hope you can take away at least one thing from reading this post.
It’s not as easy as it looks – Wholesaling is enticing to most people looking to make the move to real estate, and I don’t blame them. The gurus out there have painted this false image of the industry in my opinion. Social media is littered with posts from these experienced investors making unrealistic claims about wholesaling. “Flip houses in your spare time, with no money down, and close your first deal in a month”. I mean, I nearly jumped off my couch when I first saw one of these posts. They were the reason I started in real estate.
There is rarely a free lunch in life. Some newbie wholesalers may close three deals in the first month. But were they lucky? Or did they develop an unique business model that quick? I’ve invested 6+ hours each day for the past 5 months, and I consider myself a proactive and determined individual, and I’ve squeaked out 2 small deals for myself. I’ve faced more discouragement and embarrassment than anything else. I’ve made some awful mistakes and put my reputation at stake, but it’s all a learning process in the end. It’s crucial to have the desire to fail often and fail fast. Every lost deal just means your one step closer to closing one.
Wholesaling is the perfect way to educate yourself with hands on experience for investing in real estate. For me, it’s only a means to an end, but for someone else, it may be a long-term source of revenue. Jump in the game at 100 miles an hour, make mistakes, fail, and love every bit of it. Because it’s fun and addicting, but it’s never as easy as some people say it is.
Develop Relationships – Real estate is a game of relationships, similar to life. I was able to learn quick by getting around good people and asking for their help. You must be willing to attend at least 2-3 REIA Meetup events every week. Befriend as many real estate professionals as possible. Be willing to give them anything, without expecting anything in return. You must never carry an attitude of entitlement around with you. If people see that you are determined and willing to add value to them, they will always return the favor.
The key to developing a great reputation is to ALWAYS act with 100% integrity and honesty. If you lead life this way, it becomes very easy to attract others to you. Like I said, real estate is all about your relationships with others, if they trust you, they will always be willing to do business with you.
Also, I personally have not done enough of this, but you must be willing to reach up. What I mean by this is don’t be afraid of going up to the most successful investor in the room and asking for his or her advice or simply start a conversation. The most successful investors all know each other and they most likely all do business together. If you can tap into one of them, by acting with integrity and being the great, genuine person that you are, you will upgrade your life and business. Be willing to give them anything and everything without asking for a single thing in return because they will help you eventually, and their help goes a long way, for both your life and business. It’s a daunting task, are you up for the challenge?
Befriend the Competition – Unconventional thought process, wouldn’t you agree? I urge you to make an effort to network with other wholesalers and start partnering with them on deals as quickly as you can. Once another experienced wholesaler starts to like you, he or she will start bringing you more deals to market to your buyers, and vice versa, they will help you find a buyer for a deal that you have under contract if you’re having trouble moving it. They may even teach you some of their tricks. I’ve developed some pretty great relationships with other wholesalers in my area. You obviously make less money when you co-wholesale with another investor, but less money is better than no money, and you’re also making an investment into that relationship with that wholesaler. Think big picture, 10 years from now. Never be focused on one deal. Focus instead on creating relationships that will bring you deals on a consistent basis.
Take consistent, daily action – Starting off in wholesaling is extremely difficult, especially since everyone wants to do it now because it seems so easy from a distance. There will be days and weeks of you not wanting to pursue it anymore. Some days will be filled with discouragement, some with frustration, and others with fear. Grant Cardone and I have a similar belief when it comes to fear: If it scares you, that’s a good thing. Fear is an indicator that you should take action on that exact thing, whatever it is.
I remember my first phone call with a seller. I was shaking, my hands were sweating, I couldn’t even get my thoughts straight. But I kept calling sellers even though it scared me, and now it’s become second nature. If you’re afraid to hold a conversation at a REIA Meetup, go right ahead and start speaking to someone. If you’re scared of picking up the phone, go ahead and answer it. If you’re scared to ask for help, go ahead and ask, but be polite in doing so. Face your fears, no matter how small or big they are. Life is too short to let them determine your actions. Success and fear go hand in hand. Welcome the fear, embrace it, act on it, and success becomes inevitable.
Most of this advice that I’ve shared with you is exact advice I need to digest and act on, too. I’m far from any type of success in real estate. But I believe, truly, that I will attain everything that I desire in real estate one day, as long as I take consistent action, reach up in relationships, and act with 100% integrity no matter what. I hope to syndicate massive multifamily deals in the future, but I must start somewhere.
I wish you the best of luck. I hope this material can help you in some way. I will share more in the future. Get after it, conquer your fears. Enjoy the successes. They will come, but not as quick as you might hope. Stay persistent, consistent and determined.
Michael and Smarty
ProEdge Investors, LLC
(215) - 595-1212