Matt and Kyle Stanley tackle the hard questions about what it takes to get started in wholesale real estate, and why wholesaling is such an incredible game-changer for those who have persevered with it. Be sure to listen to the entire episode for Matt's personal story of mistakenly diving into wholesaling and ultimately falling in love with it, and why wholesale real estate just may be the answer to your goals and dreams. Once you decide to wholesale - there's no turning back!
Wholesaling 101: an explanation
You may have heard the term "wholesaling," but what exactly is it? Matt and Kyle break down the system into parts:
Party A = the seller of the property
Party B = the wholesaler
Party C = the property buyer
The challenge of the wholesaler is to make an under-market-value offer to the motivated seller of the property and then take that accepted offer and contract and sell the property to a real buyer for a profit. The contract that you and Party A sign includes an assignment clause, which allows you to give/sell your contract to another party (Party C). The profit that you earn as the wholesaler is equitable interest - the finder's fee. The key is to find professional buyers such as real estate investors or large companies that are investing in property.
How Matt stumbled into wholesaling and realized it was a dream-come-true
Matt shares the story of how he discovered real estate wholesaling and why he fell in love with it. It began when he found a house that needed a lot of work. Having once been advised that, "If your offer doesn't make you uncomfortable, it is probably too high," he stepped up to the door and made an extremely low offer of $16,000. The seller countered with $25,000, and Matt took it. Curious about the surrounding area, Matt did some research and found that a similar house had recently sold to an LLC cash buyer. Taking a shot at it, Matt called their agent and offered the property he had just contracted on for $52,000. The agent accepted the price on the spot.
Matt realized that when working in real estate, you have to decide who you want to be. Do you want to be an investor or an agent? The roles are vastly different and require different strategies. As an investor, you have the opportunity to take control of how you make your income. Wholesaling is one of those opportunities.
Action, trial & error: the wholesale real estate lifestyle
Matt explains that at the end of the day, the only thing you have going for you as a wholesale real estate investor is your confidence - your charisma. No one likes to deal with a scripted salesman. In order to succeed, you need authentic energy when beginning a conversation with a potential seller or buyer. On average, Matt and his team have a successful conversation about every 25 prospects. Yes, it takes time and determination, but in what other job do you get a $30,000 check for a single deal?
The rewards can be amazing, but they require work. Taking daily action to meet your goals is a must. Matt encourages listeners to begin with making a list of potential sellers and buyers within your area and cold-calling. If you do have money to invest in marketing, put it towards tools like direct mail and lead-finding tools. Do your research. Know what your potential buyers are looking for, what they have bought in the past, how much they tend to spend, etc. Spend time in money-making activities. Network with real estate agents in the area, cold-call, go door-to-door. No, you won't be successful every time, but going in with the mentality that you are learning as you go will help give you the perseverance you need to succeed.
Know your "why," dive in, and burn the boats
Beginning the wholesale real estate journey can be frightening. Matt pushes listeners to be fearless and embrace their "why?" Each individual will have different goals and different dreams, but know what you want. How will you structure your business to serve your lifestyle? Take into consideration the costs that you will encounter - mental costs, physical costs, and active costs. Will you manage yourself or be the manager of a team? There isn't only one way to approach making money in the wholesaling business. Be sure to listen to the whole episode to learn about the passive, active, and active-passive ways you can achieve your goals as a wholesaler.
Once you have decided to push forward, there is no plan B. Matt says to, "Burn the boats." There's no going back. The reason for embracing the wholesale lifestyle needs to be more than money - because money will never be enough. Don't be the parent or mentor who tells someone that they can be whatever they want and to chase their dreams - only to have them turn back to you and ask why you aren't doing that exact thing. Drop the income limitations and the cubicle prison of a 9:00-5:00 job, and get out of your own way.
Outline of This Episode
- [0:38] Matt's interview with Kyle Stanley of Fearless Flipping.
- [2:17] What exactly is wholesaling?
- [6:30] Matt shares the story of how he started wholesaling.
- [9:31] Persevering to the "Yes."
- [11:02] How to get started in wholesaling.
- [15:10] The process: showing you care about the seller.
- [19:28] How to sell yourself to the buyer.
- [23:20] The potential influence of wholesaling on your future.
- [27:06] Burn the boats - there's only one way forward.
Resources & People Mentioned
Fearless Flipping
Email Kyle Stanley
Connect With Matt
- [email protected]
- Facebook
- Instagram
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