The Beginner's Guide To Wholesaling Real Estate: A Step-By-Step System For Wholesale Real Estate Investing (Real Estate Investing Starter's Kit) by Jeff Leighton

Author:Jeff Leighton [Leighton, Jeff]
Language: eng
Format: azw3
Published: 2019-01-18T00:00:00+00:00

SECTION 4

Common Wholesaling Mistakes

When it comes to wholesaling, I have seen a lot of good things, a lot of bad things, and mistakes that you need to avoid at all costs. In this chapter, we go over the most common mistakes that I’ve seen investors make, including a few that I made when I was getting started. I will give you tips to prevent you from falling into the same traps.

#1: Only Sell To The Top Investors At First

When you are getting started as a wholesaler, I would only recommend selling to the top investors, people that you know are buying houses. These are the people that you see advertising the most, talking about their deals at local REIAs, or that you were referred to by other investors. The likelihood of the deal closing will be significantly higher if you work with a well known, established investor.

With one of the first deals I ever did, I had two offers from investors. The first offer was for a 10K assignment fee from a local couple that was very active in the investor community. The second offer was for a 17K assignment fee from some random guy of whom I was not sure whether he was able to close. Fortunately, I went with the lower offer and got the deal sold to the reliable buyers with a track record. When you are getting started, it can be tempting to take the higher amount, but if you do that, make sure you see some type of proof of funds from the buyer. Anybody can say they will pay X amount more, but can they close?

With your first couple of wholesale deals, you should focus on getting the deal done and learning, not necessarily trying to make a fortune. You will soon realize that there is always another deal coming around, so you need to learn the skillset of wholesaling first before trying to squeeze out every last dollar. Also, the likelihood of a deal going through with an experienced buyer is significantly higher than some other buyer who might be buying their first rehab.

#2: Find An Investor-Friendly Title Company

When doing wholesale deals and rehabs, you want to make sure you have a title company that works a lot with investors. There are title companies that specialize in working with real estate investors, and there are title companies that don’t. Too often, I will see a title company that may not even know what a wholesale deal is or does not have experience working with investors.

The best way to find these title companies is from referrals from other real estate investors as well as hard money lenders. They will not mind sharing this resource with you since, in some cases, they may even get a future discount from the title company itself. You can also just call 10 title companies and ask them if they do assignment of contract deals and work with investors. If they sound confused over the phone, they are probably not investor-friendly.

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