Categories: Podcast

268 – Rafael Cortez – How To Start Wholesaling

Synopsis

Rafael is a real estate coach and an organizational psychologist based in Miracle Valley, Arizona. He owns several real estate businesses, including a fix-and-flip company and a brokerage.

In this episode, he’ll give us some pointers on how to get started with wholesaling, including how to interact with sellers and overcome the industry’s stigma.

Key points

Background

In 2007, he started his first business centered on medical transportation. He also dabbled in fix and flips while operating his business since he had previously worked on construction projects in high school and college. A few years later, in 2012, he also explored wholesaling. He opted to sell his firm in 2014 after becoming comfortable in the real estate industry.

Fix and Flip to Wholesaling

For those unfamiliar with wholesaling, it entails finding a property that requires some work and negotiating a price below market value. Rafael said he started diving deep into wholesaling using Sean Terry’s YouTube podcast. He also did his own research to see whether he could make the switch from fix and flip to wholesaling.

In 2013, he received an email from Sean about a vacant position for an acquisitions representative. Rafael applied for the role because he wanted some challenge, and his business was basically running itself at the time. Thankfully, he was accepted. He sold his firm and concentrated solely on real estate after working as an acquisitions representative for a while.

Skills of a Wholesaler

Rafael believes that being a good salesperson is vital for a wholesaler. To do so, you’ll need to be resourceful and constantly be prepared for buyer queries.

He claims that there is a notion that wholesalers defraud customers, but this is not the truth. Most of the time, sellers spend their time deciding whether or not to sell their property, not because they are concerned about the amount of money they will get, but because they are emotionally tied to the property and have difficulty letting go.

Since wholesalers are expected to cope with circumstances like these, they must have a problem-solving mindset. Preparing a script isn’t enough since the questions vary from deal to deal, so you’ll need to expand your understanding and keep looking for new options.

Rafael said that a wholesaler must also be an active listener to know how to steer the discussion toward their goal and get a number and a signature at the end of the deal.

Wholesaling

Finding a motivated seller, getting the property under contract, and finally selling the contract are the ultimate goals of wholesaling. Anyone interested in getting into wholesaling should follow three simple steps: locate, lock, and sell.

What’s the best way to find a motivated seller? Rafael outlined three of the most successful methods for locating sellers:

Cold calling – When cold calling, you’ll need to compile a list of people linked to the kind of properties you’re searching for. This method may be done using a script.

Text messaging – You may utilize text messaging to prospect for leads. It’s a really successful means of getting into the seller’s market if done properly. According to Rafael, this has been the most successful technique for 2022 based on their experience.

Door knocking – While most people dislike this strategy because it requires tenacity, Rafael believes it is the most successful since it allows you to speak directly with sellers. To do this, you’ll need to make a list and then approach the people on it.

To lock and sell a deal, you’ll need to prepare a purchase agreement and find out what the issue is with the property so that you can come up with a solution and agree on a price. As time passes, you’ll notice that your client list is growing as you expand your network.

Batch Services

If you have a bunch of different leads, you can put them all in a lead stacking software. It will filter the properties for you, allowing you to discover which ones are unoccupied or are absentee-owned, to name a few. It’s an excellent way to zero down on a particular area or niche. When you’ve identified the properties that pique your interest, you may begin text message mass marketing.

Dealing with Sellers

When interacting with sellers, Rafael adheres to three fundamental principles to ensure that everything runs smoothly. First and foremost, radical transparency. It’s essential to inform the sellers about the whole process and your plans for the property so that the deal’s outcome does not blindside them. Second, extreme task ownership. To properly track errors, accountability is critical. Finally, third, people over profit. Clients should be given precedence over income. They must be well-informed about the deal to avoid being taken advantage of.

Final Advice

Consider hiring a mentor if you’re just getting started with wholesaling. It will help you learn faster. There would be a lot of rejections, and some folks would be rude over the phone, so you might get discouraged and lose motivation, but you must remember that this is all part of the process. To keep going, all you have to do is remember why you began in the first place and what your ultimate goal is.