Fair warning: Because this information is curated to produce results, you will be expected to take action. Most real estate investors close less than one deal a month, which is an intimidating statement if you are looking for your first one, but everyone started here, and the majority stay here, In this series, Daniel Moore and Grant Kemp guide you through the key steps to be a successful real estate investor. Just as there are stages in real estate market cycle, there are stages to your career as a real estate investor. Each level presents unique challenges that require different action plans and adjustments to your business operations. It is critical to focus on the action steps for your current stage, which are based on total deals closed.
How to Get Your First Wholesale Deal – Stage 0: 0 Deals & Stage 1: 1-10 deals
How to Wholesale at Least One Deal a Month – Stage 2: 11-25 deals
How to Go From 1 to Multiple Deals Per Month – Stage 3: 26-75 deals
How to Scale Your Business to 50+ Deals a Year – Stage 4: 75+ deals
On Your Mark, Get Set, GO
Step 1: Get the knowledge and use it on a consistent basis. You don’t have to know everything, and you must DO something every day. You will learn as your go and your capacity to absorb information expands rapidly by applying it. Spotting a deal requires educating yourself, closing a deal requires doing something about it. As noted above, this series is designed to produce results and accelerate your trajectory. Once you do your first deal, you are an investor, and that is the focus here. Chess players thinks multiple moves ahead, but if they make move #9 at move #2, they lose the game. Similarly, if you are focusing on top level nuances like systematizing or operational organization, then you will be well informed on those issues without a first win. A waypoint is not a win. Getting a contract is a waypoint, the check clearing your account after closing is a win. Celebrating the waypoint robs your drive achieve the win.
Lights, Camera, ACTION
Step 2: Marketing is the most important thing you must do every day. That is the ONLY way to get your first deal. Your greatest source of marketing is talking to people and telling them that you buy houses. Tell at least 5 people today. Drive for dollars every day. If you have a 9-5 job, drive through a neighborhood before work, during lunch and on your way home. Write down the addresses of distressed properties. Look for houses with signs of neglect, like overgrown lawns, broken windows, damaged gutters, cracked siding, missing shingles or peeling paint. Create a list of 500 potential leads every week, which is prospecting, not marketing. You must reach out 7 or 8 times to the same house. If you can’t pay for mailers, call the owner or knock on the door, leave a note, the key is contacting the own multiple times. The Propelio Driving for Dollars app allows you track your routes, pin properties, lookup the owner information, skip trace and send mailers from your phone. Again, amassing a list of potential properties produces nothing, the outreach does. One of the most important negotiating skills is looking at the situation through the homeowner’s eyes. Be a problem solver. This establishes rapport to solve their problems. When you secure your first deal, you may need to partner with a more experienced investor to close the deal. Look for an experienced investor who is doing what you want to do, and reach out to them, but only if you bring more than just a potential deal to the table. The successful investors do not have time to mentor someone, they likely have the money to fund the deal and/or the knowledge of the entire process. With partnerships, each partner leverages either their time, their knowledge or their money. As a beginner, you likely don’t have the knowledge or the money, but you have the time, and they don’t. You must add value beyond just a potential deal. A standard co-wholesaling split is 50/50 with equal experience levels. However, that split is not likely on your first deal.
How Do You Know This Works?
Daniel and Grant are both successful investor and educators who started their journey at stage 0 in a time when information was expensive, limited and unreliable, but they made it. Grant became an investor by accident when he bought a duplex, lived in one side and rented out the other. The income from the monthly checks sparked his interest acquiring more investment properties so he called his realtor to ask her how to buy properties without any money. She recommended researching foreclosure lists, which led to his perpetual quest for more information. Understanding that knowledge alone is worthless, he put each new clue into action and started marketing to foreclosure lists within weeks. During a casual dinner conversation with his tenants, he heard them utter those magic words that he had only read about “We’re just going to let the bank take it back.” He couldn’t remember exactly why they were magic or what he needed to do, but he told them “I have a solution.” Thus, his first subject 2 deal was born. And what is a subject 2? For today, just remember that it’s a solution to avoid foreclosure.
Daniel read several real estate investing books at 19 but it was 4 years before he did anything. While driving though a largely abandoned neighborhood, he remembered reading about abandoned houses as investments. He couldn’t recall the details, but he could call the phone number on the “For Sale” sign in the yard, so he did. In each case, the first deal came from a conversation, not from an education. They knew very little, but they took action, got a contract, and both were terrified because they had no clue what to do next so they partnered with someone who did know what to do, which was the case on the first several deals. Eventually, they became the experienced one who had to turn down partnership offers constantly. Your fellow investor community are an invaluable resource so be an active participant.
What actions did you take TODAY to get you that first close? You can either think about your answer or respond in the comments. Think or DO? Your move. If you closed your first, share the details, the ups, downs, doubts and lessons.
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