You’re excited to build your wholesaling business.
And you’ve probably spent a good chunk of time researching the wholesaling business model.
But no matter how many books you read, blogs you skim, and resources you scour, you’re still going to make mistakes in the beginning.
Not because you’re stupid or inadequate or incapable, but simply because that’s a part of the process 🙂
When you do something new, you’re going to mess up. And if you stick with it, you’re going to learn and you’re going to get better.
To help you with that path, we’ve put together this 3-part list of common mistakes that new wholesalers make so that you can try to avoid them.
Let’s dive in!
1. Neglecting Buyers
As a new wholesaler, you’re probably excited about the possibility of making $10,000, $20,000, or even $50,000 on a single deal.
And you should be!
With enough time and experience, you’ll learn how to maximize your profits and give your buyers great discounts.
But here’s the thing: when you’re just starting out, it’s not about maximizing profits… it’s about doing deals, learning the process, getting better, and building a buyers list that trusts you.
Sometimes, it’s worth sacrificing a little bit of your assignment fee in order to build trust with buyers who will support your business well into the future.
The wholesalers that win are the ones who are able to find and flip properties the fastest — having a loyal list of buyers is an important step toward that end… even if it means giving up a little bit of profit now.
2. Inconsistent Marketing
Marketing is expensive.
Especially when you’re just starting out and learning to trust the process… it can feel a lot like wasting money.
But the people who trust the process and keep going are the ones who will end up building sustainable, long-term wholesaling businesses. That means sending mailers every single month, answering the phone every time it rings, following up with leads at least 12 times, and sticking to your paid advertising commitments.
You don’t need to do all of that yourself, though. In fact, you shouldn’t.
You’re the owner of your business… and the more it grows, the more you should step into a leadership position so that you can work on it rather than in it.
To make this even easier and more affordable, you can have our U.S.-based, expert-trained reps at Call Porter answer the phone every time it rings. And we also recommend checking out Ballpoint Marketing — our sister company — where you can send hand-written, high-response mailers to your list for a crazy low price.
3. Ignoring Hard Math
The typical entrepreneur personality is a blessing and a curse.
It’s a blessing because you’ll do things that no one else will do — if you keep going and keep fighting, you’ll build a business that supports your family and even makes an impact on the world.
But it’s a curse, in part, because you probably have a tendency to get overly excited and make misinformed decisions at the beginning of something. This comfortability with naivety is what gives you the confidence to do awesome things, but it can also lead you to make poor decisions once you’ve started.
So here’s what you have to keep in mind: the entire wholesaling business model works because of simple, detailed math.
Before you put a house under contract, you need to know realistic, important numbers like ARV, cost of repairs, and ultimately, what your offer should be.
Remember: it’s always better to offer the seller a price that they reject than it is to offer them an acceptable price that you can’t find a buyer for.
Get a second opinion from another real estate investor on your first few deals — this will help you see the opportunity more objectively.