106: Finding, Qualifying, and Closing Wholesale Leads with Brad Clark
Brad Clark had no intentions to even begin investing in real estate. Circa 2019, the only thing Brad knew was that he’d been renting for three years and had no equity or networth to show for it. So he figured he might as well buy a property since he’s going to be paying for housing anyway—that way, he might at least see those payments return back to him one day.
Brad called a Realtor and began searching for a home. Once again, at this point in time, Brad had no intention to purchase an investment property. He just needed some place to live in. So he half-heartedly put in an offer for a duplex that luckily got outbid because the numbers made no sense from an investor’s perspective. Fortunately, Brad’s Realtor found him a solid duplex in another area with numbers that made sense and House Hack #1 was under way.
From there, Brad was hooked. He had realized the wealth generating power of real estate. He learned as much as he could and consumed information as fast as he could. Not very long after, Brad was on his way to purchasing rentals, doing joint ventures, and dabbling with wholesale deals all while working a W-2 job full time.
Up to date, Brad’s focus is to build his wholesaling team to become a force in the Rhode Island and surrounding markets. His priority is helping out as many people as he can, as much as he can.
Takeaways from our conversation with Brad:
1) What is the difference between wholesaling and wholetailing? Wholesaling is generally defined as putting a property under contract between yourself and the seller, and then finding an interested buyer who you will assign a contract with for a higher price for the same property, thus allowing you to keep the difference (or assignment fee) as profit. WholeTAILING, on the other hand, is similar in process, with the caveat that you close the original contract agreement and then (generally) do some minor, cosmetic renovations (to sell at or close to retail price), and finally list the property on the MLS or proceed with an off-market buyer as you would with a wholesale deal. Neither strategy is one size fits all (they both exist for a reason), but it doesn’t hurt to have these tools in your tool belt.
2) Gist of setting appointments. Calls from inbound leads can be nerve-racking starting out. You will fumble your sentences, your emotions will be out of whack, and you might even agree to a bad deal. As per Brad: Evaluate the seller’s tone and responses. Feel them out. Next, qualify their condition. Really get a good understanding of their situation, their pain-point, and what you can offer as a remedy. Then, gauge the seller’s price point. Let them throw out their number and evaluate as you go. Don’t be the first to throw out a price. Lastly, offer three (3) scenarios and simply ask if the seller would be willing to accept any of the three.
3) Pre-qualify to subtract, not to add. If marketing for targeted inbound leads is going to be the primary vehicle used to generate your deals, you will get to a point where you might have too many “leads” coming in. Quotations included because many of those prospects might be nothing more than time-wasters looking for someone to chat with. These are objective business conversations. Stick to your agenda and start plucking out said time-wasters. At first you might feel desperate to cling to these leads because they might be the only leads you have. But it’s better to toss bad deals in search of good ones, as opposed to clinging to the bad deals and losing money because of it.
4) Go with the numbers. Even if you might not know a specific market, or have all the data you might want to make the best calculated decision, if you have run the numbers and they make sense, chances are you have a good deal in your hands. At the end of the day, all investing has risks. It’s about how well you can mitigate those risks, not necessarily about trying to eliminate every single one. And one way you do that is by going with the numbers.
If Brad could go back and talk to his 16 year old self, he’d tell him, “Start learning, read books, listen to experts.”
An unexpected benefit of real estate investing, Brad said, was simply the experience of getting to help people who have very limited options and provide solutions for them.
A piece of advice Brad would tell his friends looking to get started in real estate would be to “Do something, take some sort of action.” It doesn’t have to be perfect (it’s most likely actually going to be messy) but if you know where you ultimately want to be, all you have to do is fill in the gaps in getting there.
Brad recommends using the Zillow App to help you do your property diligence on the fly. Just make sure to be logical by what you see (meaning, if a property is a tear down, the Zestimate probably isn’t going to be accurate).
Brad recommends reading The Book on Flipping Houses by J Scott as it was the book that first introduced him to real estate investing and ultimately got him started in this business.
Honorable mentions: Never Split the Difference: Negotiating As If Your Life Depended On It by Christopher Voss and Tahl Raz & How I Turned $1,000 into Five Million in Real Estate in My Spare Time by William Nickerson.
If you’d like to get in touch with Brad, visit: www.401homebuyers.com or follow him on Instagram @401homebuyers
Thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!