Funny, coming from someone who doesn’t wholesale. I do know the basics about it though- you find properties for other buyers, flippers most likely, and do the double-closing thing or whatever it’s called. You make your money by upcharging the buy price to the investor so you make the difference. Easy! That’s why everyone says it’s such the perfect start for a new investor; because it’s “easy”.
Wrong. There is nothing “easy” about wholesaling.
Easy vs. Simple
I want to hold off on copying and pasting dictionary definitions of each word because I don’t want the differences between these two words to be the main focus, but if you look up the definitions, they will support what I’m saying. I believe wholesaling is “simple”. Meaning, the process is simple and straight-forward, as I explained it above. I do agree with that. However, I don’t think there is anything “easy” about wholesaling. Just because the process is simple, doesn’t mean it is easy or doesn’t take a lot of work to do successfully.
I think that is where people misrepresent wholesaling. They imply that it is so easy that any idiot could do it, therefore, start there. Really? If any idiot could do it, why are there not more rich idiots out there?
Simple does not necessarily equate to Easy.
Don’t Be Fooled
This whole idea goes beyond just wholesaling. It happens everywhere. Wholesaling, being a real estate agent, buying 75 rental properties in 5 years, you name it. Ok, all my examples went back to real estate, but how often have you heard people try to convince you how easy something is? Like multi-level markets pyramid scheme setups.
The reps will go on and on telling you how easy it is to make a gazillion dollars selling their stuff. They (almost) aren’t lying. You can make a lot of money selling that stuff, but the process is simple, it’s not easy. It’s a simple and straight-forward, hey hold presentations and talk to everyone you know and they will buy it, process, but it’s not easy because it takes a long time to build your buyer database, get to a point of continuous sales, constantly reach out to new people, handle such a small attrition rate, and in the case of products like those (whatever they are), small profit margins.
Everything someone presents to you that is so “easy” is really just a “simple” process. The process is simple, but building the foundation for success in that area is what is not easy. Building a foundation strong enough to succeed in wholesaling, or in any arena someone swears by, is a really difficult task.
For one, you have to really resonate with that thing. If you try to wholesale and it’s just not you, you will never make all the money people swear by. Never! If you try to push Mary Kay makeup and you aren’t a natural makeup lover and believe in the product, you will sell nothing. Or, if wholesaling is totally up your alley and you truly love it, you may just make a ton of money from it. Or, if you are born with makeup style in your genes, you may do very well with Mary Kay and end up driving a pink car.
An actual example: I read in Rich Dad Poor Dad, or one of Robert Kiyosaki’s books I don’t remember, that if you are ever going to learn sales, it is imperative you try working for a multi-level marketing company. So of course being the avid Robert follower that I am, I jumped on. I had already been using Sunrider products, and I knew they are a huge multi-level marketing company. They are a holistic nutrition company and I’m a health-nut and still use their stuff every day.
So at the time it seemed like the perfect opportunity, learn sales by selling something I actually whole-heartedly believe in. Maybe I could have done well with it, I have no idea. I accidentally got so into real estate investing that I never gave the job a chance much more than sending out the infamous email to my ‘friends and family’ telling them about the ‘new product I found that I just can’t live without’.
Here’s what I got from all that though. While I am huge in nutrition and will argue with anyone that Sunrider is the best company out there (be sure to sign up under me if you go check them out…lol), I know that nutrition isn’t what really resonates with me from a career perspective. How do I know? I know because never once in my time working with Sunrider did I ever meet anyone randomly who was as gung-ho about that type of product as I was.
Whereas, since I got into real estate, it’s like I can’t turn a corner without running into someone new who is interested in what I am with real estate. It’s not because real estate is so much more popular than nutrition that it would make sense I’d run into more RE folks, it’s because there is a natural tendency for all of us to run into people we vibe with. It’s like we have magnets. Everyone attracts a certain person. In my case, I very naturally attract investors. I do not naturally attract nutrition-focused people. No idea why, but for one I’m not a yoga instructor or personal trainer or in any field where I’m around nutrition-focused folks on a regular basis.
The Actual Point
See where I’m going with this? If wholesaling isn’t deep within you, you won’t succeed. My problem with everyone screaming to the real estate newbies that wholesaling is the way to go is that yes, it is a ‘simple’ process, but it is still not easy to do and it may not even be that person’s thing.