Steps To Start Wholesaling When Failure Is Not An Option

October 20, 2016 in Investor Stories

Equity Real Estate Journey

The Journey

Hi guys I want to talk about an awesome encounter I had recently and how it made me reflect on how I got started. I was asked “what are the practical steps I need to take in order to get my first deal but I can’t afford to FAIL”!!!!

Does this question sound familiar or are you facing this same dilemma……? if so this article should speak to you.

So what should you do if you can’t afford to fail but you are ready to get started, here are some practical steps.

The Journey

Let me tell you my story so you know that I am speaking from a place of experience and not theory. In the fall of 2012 my wife and I finally decided to move to a warmer climate, we are from Chicago and we were just getting tired of the winter and our kids were just getting started with their schooling. The decision was not easy, it took much prayer and many discussions with the family. The reason the decision was so difficult because I was just getting started with a few rentals I have and I was leaving a family business that was very lucrative. I told my wife if we could find stable employment then we could make the move.

After months of putting in employment applications in Arizona and visiting we both were offer positions. This was awesome news to us but not as much to our parents. We received the blessing to leave from our parents (although we’re grown we wanted to leave peaceably). This was difficult for our parents because we’re taking their only grandkids 2500 miles away.

The transition did not go according to plan as most plans don’t. My wife was stable in her position but the job I was offered was rescinded. The situation I was in seemed to be hopeless, I was denied the position because I had a misdemeanor criminal offense that occurred 20 years earlier that raised a red flag for the employer. In Arizona most executive level positions require a high level fingerprint clearance so in my eyes I was barred from all employment.

This was devastating I dealt with depression not being able to provide for my family. I faced embarrassment because I spent $90,000 on an education that was practically useless in this state. I was ashamed because although so many I had no idea what to tell my children when they asked why mommy was the only one going to work, and I was regretful for making the decision to leave certainty for uncertainty.

So……I could not afford to fail. On my drive from Chicago to Phoenix I stumbled upon the Bigger Pockets Podcast, I was in the beginning stages of being a landlord so I knew real estate was my passion and my way out. I continued to listen and soak up as much information as possible and I finally decided to take the leap. I figured I was at the bottom and things could not possibly get worse financially so it was all or nothing. I could not afford to fail.

I maxed out every credit card I had which only totaled a dismal $1700, but this was my security blanket. Again I could not afford to fail and this is the step by step process of what I did to get me and my family out of that financial struggle.

 

The Process (Giving)

The first thing I did and I believe was the most important is that I changed my perspective. I looked at things from the benefit perspective vs the burden perspective. I begin every morning and throughout the day thanking God for what I have and begin to speak positively about where I was going. I did not focus on the lack that was in my life.

The biggest promise I made to myself was that I would be a giver. I promised to give 10% of whatever I made to charity and would live off of 90% of my income. The reason I made this decision is because I knew after much study that money is currency and there need to be a continuous cycle in order for me to live in abundance. This was a tough decision because most of the time when I did make some money (from my rentals) that 10% could have been used for a delinquent bill or savings. I knew that by giving I would receive and what I was looking for was not money in return but the right connections.

One of the biggest struggles for newbie investors is to find someone that was willing to coach them and train them. Influence is what I was looking for I wanted find that person that would be influential to help me launch my wholesaling business. After a season of giving I was able to receive the right person that helped me get started.

The Start (Sacrifice)

Once I found the person that was willing to help me I had to be all in. I had to eliminate every excuse I couldn’t worry about how competitive the market was. I couldn’t worry about how much money I did not have or anything else. I had to be committed.

So what I had to do was use what I had in order to get what I needed. I drove for dollars, I wrote yellow letters daily, I went to every open house in my neighborhood to speak with Realtors to get pocket listings. I went to REIA meetings, and I did tons of networking with other wholesalers. Again I had to be all in.

My First Deal (Hustle)

So after the tons of networking and my mentor (in theory) telling me what need to be done, I went to an open house and had a great conversation with a Realtor. I didn’t think anything of the conversation but I informed him if he knew anyone that really needed to sell to call me and we will make an as is cash offer with no hassle. I had no money only thing I had was hustle, grit, and a contact but I presented well.

Roughly a week later the Realtor called me and told me about a seller who was going through a divorce and needed to sell immediately. I discussed my offer with the Realtor and after approval from my mentor and some tough negotiating the seller accepted and we were under contract.

My mentor bought the property and I received a $2200 birddog fee. What was important was not the money but it was the experience and the realty knowing that this was possible.

On And On (System)

After knowing this is truly possible I begin 10x (ing) my efforts. I began networking more, now since my mentor saw the effort I was putting in he provided me with authorization to put in offers on mls listings and he also provided me with a POF (proof of funds) letter. From my networking I was able to find another aggressive Realtor that was willing to put in tons of offers. From that relationship and resources we were able to get two more properties under contract. Now I had about $8000 in my coffer to work with to do my own marketing.

From my networking I met another awesome wholesaler that was doing about 4 deals a month. He was looking to expand his operations and needed someone that was effective with lead management. I took the opportunity because I knew I would be able to gain more knowledge and refine my technique speaking with sellers. This opportunity turned out to work great for all parties, they were able to close more deals and I was able to make money while learning.

Journey Continued

The journey is continuing; I am doing my own deals and working with many buyers. Because of my network which I am expanding I am currently working 2 markets (Phoenix & Chicago) and my family is not faced with the financial struggles.

I don’t want anyone to think this process was fast, it took plenty of patience and tons of tenacity to see things materialize. I am grateful to those who assisted me along the way.

In parting I would like to inform the key practical steps to getting your first deal when you can’t afford to fail is Study, Network, Market, Implement Systems,  and use the Golden Rule.