Answers to the Most Common Wholesaling Questions
Many wholesaling questions are easy to answer but are still asked to this day. This is understandable. As with anything in life, the hardest part about wholesaling is knowing where to start. It’s a big stumbling block that led to many frustrations and hopelessness. It is not a completely alien concept, and most of us have went through the pressure of trying to get started and not knowing who to depend on.
So in order to level the playing field and give many novices a little bit of a leg-up, here are some tidbits of information that will hopefully chip away at that initial hurdle. There are a number of questions about wholesaling that all novices struggle with, and here are their answers:
Is Wholesaling Against the Law?
If you are already an established broker, you may balk at this question but keep in mind that to many novices, the idea of wholesaling seems too good to be true. After all, it allows people to broker deals without a license.
The issue of licenses will be answered later on in this article, but for now: the truth is that if everything is done above board and with sincerity, you are not likely to run afoul of the law. You will need to be strategic with your verbiage if you want to boost your success rate, but you should still be honest with your contracts. And since different states will have different laws, you should seek help from a legal professional before pushing through with anything. It will cost you, but safety and security always carries a price. And most of the time, it is worth it.
How and Where Can I Find a Mentor?
Many novices ask wholesaling questions related to finding a mentor, because they do not realize that most mentors are not looking to do charity work. If you want someone to even consider mentoring you, you need to provide some value in return. You won’t find any free mentors. The ones that do offer free mentorship are most likely not worth your time, or straight out scammers.
The best course of action, if you want to take it slow and don’t want to invest money on a mentorship yet is to just go out and learn things on your own. There are Youtube tutorials and articles all over the Internet. Then put them into practice. If you find some semblance of success, you will attract the attention of the real mentors in the industry, and maybe a few of them will contact you instead and make offers.
Wholesaling Questions on Finding Motivated Sellers?
The best answer to this question is to be proactive. You won’t find them if you are being passive, merely looking at what others have done and hoping for scraps. Go out there and advertise yourself. Cold call leads, start a direct mail campaigns. Put out a “For Sale by Owner” advertisements. The industry is highly competitive, so you need to be highly competitive as well.
How Do I Approach a Seller if I Have No Money to Buy Their House?
The first step is to avoid admitting that you don’t have the money. It’s true that you can’t afford their house when you talk to them, but you will have enough money by the end of the inspection period. Sellers can easily detect buyers who lack confidence, so don’t second-guess yourself. Be confident and trust in your system.
As for things to say to the seller, you want to come off as a listener as opposed to a talker. You can ask them some of these questions:
- The reason they are selling
- Why are they selling the house if it is perfect
- Are there any concerns I should know about as a buyer
- Is repair needed, and where
Make sure to avoid being confrontational. Ask the questions and let them talk.
How Much Should I Offer for the House?
This is an easy question to answer, because even though things will vary depending on the market, people who have come before us have already turned it into science. A great starting point is the common rubric of ARV X .70 – Wholesale Fee – Repairs = Maximum Amount to Offer. It will require adjustment and refining depending on the market, but it should be a great starting point for novices.
Important Wholesaling Questions on Getting a License
Finally, the most intimidating question. While you can start without a license and that you will save yourself a lot of headache, it is still a smart idea to get a license. You will need it if you plan on becoming an investor for the long term. It also opens up other avenues for income and gives you a certain amount of credibility compared to unlicensed investors. Business is all about being willing to take a risk, but there are parts where it pays to play it safe. Get a license, you will thank yourself later. There are more wholesaling questions out there, but for now the answers above should give you a boost.