Episode 3: The When, Where, and Why of Wholesaling

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Show Notes

Welcome Back to the Discount Property Investor Podcast Episode 3! Thank you for sharing some time with us today. In this episode the hosts David Dodge and Mike Slane talk about when, where, and why you should start investing in real estate and why wholesaling is the easiest way to get started investing in real estate today!  They also talk about their own when, where, and why’s that got them started as real estate investors.  In this episode you will quickly learn how to find your own when, where and why so you can start investing in real estate like the Discount Property Investors!

To learn more about Wholesaling visit: https://www.FreeWholesaleCourse.com

Check out our Tool Kit to see David & Mike’s Secret Weapons:
https://discountpropertyinvestor.com/toolkit/

Welcome to the discount property investor podcast, where we show you how to buy real estate at a discount, so you can create wealth over time and income today. Our mission is to share what we have learned from the experience of others and help you make more money investing like a pro. We want to teach you how to create wealth by investing in real estate the discount investor way.

Thanks for tuning in.

Mike: Welcome back discount property investors. I’m your host Mike Slane, joined with David Dodge. Thanks’ for joining us today, we are going to be talking about the ‘when, where and why’ of wholesaling. If you are interested in learning more after listening to this episode, please check us out online at discountproperterinvestor.com, you can check out our current properties, or there is a link to freewholesalecourse.com, where you can learn more about jumping into wholesaling, getting started there.

But today, we are talking about ‘when, where and why’. So let’s go ahead and get started, Dave, do you want to cover, ‘when’? When shall we start wholesaling?

David: Today. Obviously today. When should you start? Today. Don’t procrastinate, get out there. Sometimes the best lessons you can learn in life are mistakes that you have made. So, my main focus with this episode is, get started and don’t be afraid to make mistakes. Obviously if we can learn from the mistakes of others to prevent making those mistakes, that’s great. We can all educate ourselves that way. But don’t be afraid to make mistakes because, if you make mistakes that means you are learning and you are growing. Not only as a person but as a business. I would say the ‘when’ would be right now. Get started today.

Mike: No matter what stage you are at your business, I think it’s important to start wholesaling or thinking about wholesaling. If you are a seasoned real estate investor you have been doing flips for a long time, well you are coming across deals that may not fit you, or your criteria. So, you may as well make some money on it.

David: That’s OK if you come across deals that don’t fit your criteria. You are paying for those leads, instead of saying OK yeah; I don’t want to buy that home in this area because of this or because of that. There is tens of thousands of other people that are looking for that type of deal so. Always have wholesaling on your mind.

Mike: If you are a new investor, why start with wholesaling? Well, because you have to learn how to negotiate deals. You have to learn to find deals, wholesaling is kind of a base of — any business really. In that you are learning to negotiate deals. You are negotiating on your purchase side and your sales side to — make a deal. So it is definitely — anywhere you are at is a good time to start or try to learn how to wholesale.

David: Absolutely, and one of the things that discount property investor is trying to teach people in — our motto is discount properties. So, if you can learn how to buy property at a discount, then no matter what you come across, you are going to be able to make money on it. So you make your money when you sell — or when you buy. I screwed that up. You make your money when you buy, but you get paid when you sell. Always be focused on getting the property at a discount from the beginning. That’s the main point that we are always wanting to stress to our listeners and our viewers in this point in time.

Mike: Sure, go in it with a little bit of tact too. Don’t hit on price right up front. You always want to get a good price on a property for sure. So we talked a little bit about the when, so where, where should someone start wholesaling? I am going to go with in your backyard. I see a lot of people — I guess I get a lot of calls from people, and it sounds like they are trying to wholesale in St Louis when they don’t necessarily live here. I can tell they are a green investor. They just don’t know exactly the right questions to ask, things like that. And I am always wondering why are they trying to — start off somewhere else? It confuses me; it is not what I recommend. The where and why are in your backyard and you have got the ability to go look at the property, you’ve got — just makes sense to me.

David: It’s just — easier to start in your backyard. There are people out there doing wholesaling nationwide. They are doing virtual wholesaling as I like to call it. And, it’s not necessarily a bad thing, but I look at that as a more of an advanced way of investing. It is more of an advanced strategy for — people that have large marketing budgets, and they are able to create strategical alliances, with local investors, local wholesalers, and they can do it in multiple markets. So I look at — doing virtual wholesaling — it’s a whole different beast. So as far as the where goes. We always recommend, start in your backyard.

Mike: We are obviously bias because we did it.

David: Absolutely. Start in your backyard, and if you live in a city that has a small population, then — find the nearest market that has a large population. If you live in a rural town, that doesn’t mean you aren’t going to be able to find deals in that town. There are deals everywhere. You just got to get out there and start marketing. But what that does mean, is there might not be a large buyer pool in your small town. Always start local, start in your back yard. If your backyard happens to be a cornfield or somewhere really rural. Find the nearest local market that has a pretty decent sized population and start there

Mike: I think one of the rules of thumb we use is, if there is a real estate investment association, like if there is a A.R.E.I.A meeting in that city, or town, there is probably a good sized market to — get into wholesaling or there is going to be a large enough market where you are going to have people that you are able —

David: If you have real estate investors meeting on a weekly or monthly basis, then exactly. That right there should tell you there is enough interest in that market, that you are going to have buyers to where — if you go out and do some marketing to find the motivated sellers, and you get the deals, that are then going to be able to sell those. So absolutely, great point Mike. If you have a local A.R.E.I.A real estate investment club in your market, then your market is probably big enough.

Mike: Again, not just anyone who lives in a rural area, or if you live — in hundreds of miles then year the wholesaling probably makes sense. Again, i think there is a different set of challenges for you doing that. But start in your backyard, if at all possible. Or the closest backyard to you.

David: Absolutely.

Mike: That’s kind of our message on that.

David: Absolutely. So when? Today guys, get started today, don’t wait. Get out there, if you have to make some mistakes, make some mistakes. That’s how you’re going to learn. The where? Local. Start in your back yard, or the nearest market to where you live, ok? Why? Why is probably one of the most important questions that you can ask yourself? You need to find your ‘why’ ok. When it comes to my ‘why’ personally, I like being my own boss, I like creating my own schedule, and I really love passive income and cash flow. Cash flow is one of my favourite words. And, if I can build myself a little bit of a business that will have a reoccurring cash flow or — pay cheque that I don’t necessarily have to work for every day, week or month, then that is going to be able to give me financial freedom. My ‘why’ is the ability to create financial freedom, work for myself and really determine my own level of success? If I decide I want to take two weeks off, probably not going to make a whole lot of money other than — off the investments that I have already created, however I have the freedom to do so. If I want to work really hard and — then obviously I am going to be able to make more money that way. Mike, what you say your why is?

Mike: Mine was pretty similar. I would say for anyone that is struggling with their ‘why’, research Simon Sinek – Start with why, I think is a book he wrote.

David: Absolutely.

Mike: Excellent book, go ahead and that will help you kind of determine your ‘why’.  Another quick method would be — just ask yourself why’’ about five times in a row. So if you say you want financial freedom, ask your why? Why do you want financial freedom?

David: Such a great idea.

Mike: Because I want to spend more time with my family. Why? Because I love my family. Why? Keep drilling down — as many times as you can to get to that core reason. So my ‘why’, I will get a little bit into that as well, was — [00:08:44.19 – inaudible] and that helped me change the way I think about money, and how I think about income. So David hit on the passive income thing and — the time freedom. Those are two of the main reasons for me, being in real estate is the same thing as — I don’t want to be tied to a job. I don’t look at investing in the stock market as investing as much. Well saving, I’ll consider it saving if — blue-chip stocks, dividend paying blue-chip stocks. But — yeah so my point is. You can’t necessarily take $50,000, put it in the stock market and expect to get 800 bucks a month from it.

David: Or even 30,000.

Mike: Whatever number it is, in St Louis we can get —

David: 20,000.

Mike: Right, and expect to get a $800 pay cheque every month from it. You can do that with real estate. So — with no nearly as much money you can create the amount of money you need each month — in a much quicker time. So that’s my ‘why’ is the passive income, the time freedom that real estate allows me and — yeah. You have to figure out your ‘why’, it is extremely important. Anything else on the ‘why’ Dave?

David: I think you are exactly right. I don’t want to get too deep into the topic of — why real estate versus other types of investing. But Mike said it — great as far as — you have a lot more control when you are investing in real estate and that’s another one of my ‘why’s is that I have the ability to control my investments. I also have a portfolio in the stock market. But it is very, very passive. You can make a capital gain or you can make a dividend on stock — or stock portfolio that you make have. But you don’t get the ability to leverage your investment. You can use margin, which may give you one to one, or even a little less. But it’s risky. With real estate you have the ability to leverage yourself as much as nine, ten or even twelve times if you are using hard money —

Mike: I’ve been thinking about that South park episode. I am sorry, I’m interjecting.

David: You’re fine.

Mike: But — when Stan and his dad go to the bank teller.

David: Oh yeah.

Mike: And they put the money in —

David: And it’s gone.

Mike: That’s the thing with real estate; you have to have a real asset there.

David: You do. You have to have a real asset. Absolutely.

Mike: Can — depends on what you’re investing in. And it’s gone. But with real estate and your tenants gone and they’re not paying, and —

David: You still have yourself a property.

Mike: You still have an asset.

David: You still have an asset. Let’s touch on this really quick Mike. You mentioned Rich dad, poor dad. Again, that is one of my favourite books of all time, if you haven’t read that book yet, we highly recommend it, I think it’s probably the number one real estate book in the world at this point. But I think the main take away from that book and there are tons of them. Is determining what an asset is. So — just to touch on it. An asset is something that is going to put money in your pocket — on a weekly, monthly annual basis. But it isn’t taking money out of your pocket. So with real estate, we look at real estate as an asset because — there are so many exists you can have with real estate. You can buy something and lease it out to a tenant. You can buy it, fix it up then you can sell it. You can lease option it, you can buy them subject to — there is just tons of different ways that you can make money in real estate so. That is one of the things that I would just like to touch on.

Mike: Yeah, that’s a good point. We don’t — I think we just make the assumption that if you are listening in or — turning in to us that you have already bought into the real estate thing. But — there is a lot of reasons its makes sense. Tax implications, there is lots of them.

David: I didn’t even get into that, there are so many reasons.

Mike: That’s great. What can you do today? I think we should probably get into that.

David: Focus on your ‘why’. It’s really simple, figure out why you want to invest in real estate and find your ‘why’. So when is today, the where is your local market, the why is that you need to determine for yourself. So find your ‘why’. And from there, we would like to invite you to the freewholesalecourse.com; we have a link to that website and that course on our main website which is the discountpropertyinvestor.com. If you are looking for local properties, or should I said properties in St Lois Missouri, you can subscribe to the discount property investor.com on our website, top right-hand corner, there is a subscribe button. Let’s wrap this episode up with a quote Mike, what’s today’s quote?

Mike: Sure. “Someone sitting in the shade today, because someone planted a tree a long time ago.”

David: It’s a great quote. Invest today so later in life you can live the life that you want and you can have the financial freedom that we all desire. So — the main point of this is finding your ‘why’. As soon as you find you’re ‘why’ it’s going to make everything else a lot easier, and we wish everybody luck in their discount property investing endeavors, thanks, guys.

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