Why Most Real Estate Wholesalers Can't Scale Past $10k/Month (And How to Fix It)

Guys, I hear you. You're closing deals, putting in the work, 12-hour days, but you're still stuck at $8K, $9K, $10K per month. You think you're doing things right, but nothing is changing. Why is that? The reason is not your market, it's not your deals. It's because you're still thinking like a hustler and not a business owner. And unless that changes, you're going to keep on spinning your wheels. And if you don't know me, my name is Fidel. I have closed over 300 wholesale deals and have a business that does over $100,000 per month and help other wholesalers break through the hustle trap and build a real company. And in this video, I'm going to walk you through why most wholesalers get stuck at $10K per month and what changes once you break past that ceiling and how to build a lean, profitable company, even if you have a small team and ad budget. Now let's talk about why most wholesalers can't get past that $20K per month and how to fix it. By the way, this is what we closed in June. We made a little over $220K, and for July we did a little over $110K. That way you know what I'm talking about and what I'm about to tell you. Now I'd like to go over some of the reasons why most wholesalers stay stuck. So most, you know, like I said, they never break from that hustle culture and they're still stuck doing everything manually. Right? They have no systems and every deal feels like it's starting over from scratch. You just keep on doing that hard work and that grind, right? You're hustling in the business, not building the actual business. You have that grind mindset that blocks your long-term growth and you have no consistent scalable marketing engine. You know that we do great with Facebook ads, which I'll touch on right now, but usually you also are not gonna be tracking your KPIs because you can't optimize anything. Like you don't know what to track and you're still stuck in that needle grind to make a profit pretty much. Now the CEO mode sounds like a dream, but they don't know how to get there. And they're stuck wearing 6 hats between the lead gen, the calls, the dispo, the admin, the TC. It's just chaos every day. And you get pulled in every direction. Now, if you have a solo empire where just you doing all the deals, it'll be profitable, but it's not scalable. You're going to need to know how to hire people and how to train them. And most wholesalers don't reverse engineer their goals, meaning that they stay stuck guessing on spend and strategy. They will usually want more revenue, but they end up keeping less because they're not doing and they're not operating like a true business owner. And they keep on selling to flippers, making low fees, instead of maximizing each deal by putting on the market and doing innovation where you can make way more money and close more deals to where your profit per deal is above $15,000 per deal. Now let's talk about the hustler mode versus the CEO mode. Okay, there's nothing wrong with the hustler mode, but it can only take you so far. And past $20K, you're going to need to change your mindset and start bringing people in and spend more on marketing. Of course, it depends on what kind of business you want to run, but if you want to get to past $10K per month, you're going to need to do things differently. Now, in the hustler mode, you're doing the cold calls, you're texting manually, you have random deal flow, you're never, you're never consistent, you never know what you need to do in order to close more deals. You just focused on closing that next deal, which prevents you from growing. You don't track your marketing spend. You are working in the business instead of on the business. You have no budget for ads. You're just doing things manually, which is, like I said, nothing wrong. And usually here you have no time to train or delegate, or you have not hired your first employee. What does the CEO mode look like? This is when you start delegating to a team, you start hiring people, training them, doing all those things. You start having predictable tracked lead flow. You start focusing on building a replica— replicable machine that it just spits out leads and gets you deals. You start tracking your KPIs and you start reverse engineering your goals because if you don't know what you're shooting for and how to get there, you're never going to get anywhere. You start tracking your KPIs and doing that reverse engineering method. You start working on the business You start working on yourself, becoming a better founder. You start investing in profitable marketing that gets you that consistent lead flow. You start building systems and SOPs. And basically here, when you're a hustler, you have sweat equity, but when you are a CEO, you have a scalable business and infrastructure. And the CEO has time to leverage, train the team, and give them like scorecards, because if they don't know what they're fighting for, you're never going to achieve your goal. Now, if you have a one-man show operation, you still make probably 80% profit margins, but you still be tapped on reach because your time is very limited. Now let's talk about the scaling roadblock. Now, when you're hustling, you're doing manual labor with no ad spend. Check out the last video that I, that I made on how I would start wholesaling if I had like a low budget. With that option, you still close deals, but it's very time intensive and it's going to require a lot of your time in order to close the deals, right? And then you start kind of building like a little bit of the chaos once you get to $10K to $20K per month because you have like random wins, but you still have no systems and you feel like you're burning out. Now, above the $20K to $30K per month, you start getting, you know, into the KPIs, you start training your team, you start having systems and you start having a marketing flywheel that gets you leads 24/7 because you already set up the marketing machine in place and it's just a matter of lead flow, right? Now, most people never move beyond the chaos because they don't think, they don't change how they think. And like I was telling in the beginning, you need to change your mindset to start thinking like a business owner instead of a hustler. Now, the chaos phase is what burns most people out. This is what makes people quit, but it can be done. You have done it, so can you. And you've seen all the people online that make it is because they adopt systems and they change your mindset. Now, one thing you got to remember is that revenue does not equal profit. Imagine having a $150K per month business where you only net $10,000. That will suck. So you got to know your margins and you got to know what you're fighting for. Most skip the systems and they bleed out at $20K or $30K per month because they're either not hiring properly, they're not training the team, they're not tracking KPIs, they're not reverse engineering, and they don't know their numbers. So you got to think like a CEO and know your numbers. Now, what's the fix to this? The reverse engineering growth. So this is how you scale like a CEO and not a— not just like a traditional grinder, right? So you gotta start with the end in mind. So what is your goal? Let's say that your goal was to get to $25K per month. You gotta reverse engineer your numbers, which I'm going to show you right now. How many deals do you need? How many leads? What's your cost per lead? Now I have a calculator that kind of breaks it down, but let's say that your goal is to get to $25K per month and your average deal size, let's call it $15 grand. That's if you're implementing Novations and Wholesales. Let's say that on average you make $15K per deal. Now let's say that your success rate is 70%, meaning that's industry standards, that if you were to lock up 10 deals, 30% are going to fall out, either title issues or maybe needed repairs, or maybe you saw the property and it's not what you thought. You know, we got to factor that in, right? And let's say that you start knowing your leads, the leads, the amount of leads you need in order to close a deal. Let's call it with, you know, with Facebook, you need 25 leads to close one deal that makes you $15K. Well, let's say that your cost per lead was $45 and your goal is to get to $25K. That would mean that you would need to spend on average around $2,500 to $2,800 a month in marketing in order for you to make this $25K. Now you would only need 1.6 deals to close, but let's say that you had an 80% success rate, then this is basically how the numbers would change. And with that same spend, you can get to $30K per month and have a very lean machine. And as you start making more money, that's when you start hiring and investing more into the marketing, but you gotta know how this makes sense and how it reverse engineer into your goals. So just to recap, okay, if you want to get to $25K per month, you need to have an average of 60 leads per month. And let's say that you close 1 in 25, well, that would basically— this will get you 2 deals. Let's say both close, you would make $30 grand. So I hope this makes sense. And once you understand this, this is when your mind is going to open up and see what you need to do in order to get that. To get there, right? And the way that I like to do it is by installing a profitable lead machine. Now, you know that we love Facebook, and I just wanted to show you, this was the last 7 days. We spent $1,300, we got close to 50 leads, and we got 2 contracts out of this week, right? And we only spent $1,300, and our cost per lead was on average like $30. So this is the power of having a profitable lean machine and like lean marketing engine that gets you the leads. That way you can make more money by spending less. And then you also got to track the right numbers. You know, your leads, how many leads you need to get a deal, what's your cost per lead, what's your close rate, what's your average assignment fee, right? Now the way that I like to break it down is you, you need to know, okay, you need to track your leads your net leads. So a net lead is basically anyone that you reach out to that they said that they want to sell and that they're the homeowner. And then a regular lead is maybe you got a lead but they never answered. That's not a net lead. So the net lead is the people that we actually talk to that we know they want to sell. Now you gotta track your appointment ratio, your offer, uh, how many offers you send out, how many contracts you get, and how many deals you sell. So By tracking all of these 6 numbers, you'll be able to, you know, have a better business. And you need to hire and train your team. So as you start getting more deal flow, you're going to be able to start with, you know, your dispo or acquisition. You gotta teach them your systems, you gotta document the SOP so they know what to do, and you gotta give them the resources in order to do it. And before you do that, you gotta invest in education and mentorship so that you yourself become a better owner and you can hold them accountable because most A players are not going to want to work with someone who's not an A player. So why I like to invest in education is because you can shortcut, you know, years of trial and error and just pay to get the right information. Um, and this is basically how we help our students basically start scaling. Now use my reverse engineering calculator, send me a DM on Instagram and I'll send it over to you. You can input what's your revenue goal, which is right over here, and it'll spill out how many leads you need in order to get a deal. You got to know your deal size, your numbers, all that. And then the output is basically going to find out how much you need to spend in marketing in order to achieve your goal. Now, the nature of our business, since we're dealing with distressed homeowners, we need just— we just need more leads and more people to talk to in order to get a yes. 'cause most people are gonna be a no because they're selling for a discount and it's just a numbers game. But most people fail because they don't know how much money that they need to spend or they're not even like tracking. So they're just guessing. And your marketing spend must match your close rate and your team capacity. But if it's just you, I mean, you can build a very lean machine by spending less than $3K per month and that should get you at $30K per month. Now, what does scaling actually look like? When you start knowing your numbers, so for us, we know that out of 15 to 25 leads, we get a deal. Our average cost per lead with Facebook, it's around $35. And we make anywhere from $17K to $20K per deal. And we have a 35% close rate on warm leads, meaning out of 4 offers that we send, we contract 1, okay? And in this stage, you start having a predictable flywheel marketing system where with us is Facebook. We put on the ads, our lead managers called the leads, and then our closer puts them on the contract. Then we dispo them and then we get paid. And this is what the CEO model actually looks like. KPIs are not optional. They're the only way to scale. And then Tracking equals profit. Not tracking equals bleeding, bleeding cash. And basically, you just keep on hustling, you don't have a business, you have a job. And one missed deal could cost you $20 grand. So you got to be able to do your team reviews weekly. Now, wholesaling doesn't reward the hustlers, it rewards the operators and the people who treat it like a real business. And it's not about working harder, it's about building something that works without you. And with our Arbitrage Ads method, we help you get cheap inbound leads and help you build a replicable sales process that you can just plug and play with your team so that you get consistent deal flow. Now, 80% of my business is now delegated, which gives me more focus. The only thing that I have to do is do the marketing, and the leadership with my team where I hold the weekly meetings, the daily meetings as well, and I hold everyone accountable to what their goal is. And if you want to see some of the results we get with our clients, you know, have this client that got probably like 4 deals out of $30K spent. He spent $3 grand and he's already made like $40 grand. This other guy within the first 2 weeks, He got his first deal, $12K projected. He only spent $1,200. And this is basically what my ad spend looks like for my own personal business. You know, it's very, very cheap. From this, we get anywhere from 8 to 10 deals per month. That gets us past the $150K per month close. And there you have it, folks. That's exactly how I would scale past the $10K per month into the $30K, $40K, $50K range, but nothing changes unless you put in the actual work. That if you follow this to the T and you install a profitable lean marketing channel and you start tracking your KPIs and you start building a small but effective team by putting in a replicable sales process, I promise you there's no way that you break past that $10K and get into the $30K, $40K, $50K range. And I know it's easier said than done, but here's why most people get stuck. You don't know what to track. Basically just throwing spaghetti at the wall and hoping something sticks. You are basically wasting money on ads by not knowing what to test or even trying out marketing channels that are not performing. You try and hire a team, but they're not performing. And I know, I know it's hard. And with everything I have given you, you really have two options. You can try and do this all yourself and implement everything that I told you. And I know you can do it. It's going to take some time and I'm cheering here for you, but you have another option. You could work with me and my team where we help you implement a proven marketing system and a scalable sales process to get you closing more deals where you spend less time hustling and more time making money and operating like a true business owner without getting that burnout feeling or feeling that you're still stuck. And if you think that you pick the second option, I want you to click on the link down below and see if you qualify for our Arbitrage Ads Method that we can help you implement this into your business so that we can help you make more money. And with that being said, watch this next video and I'll catch you on the next one. Peace.