Best Markets for Real Estate Wholesaling Success

Welcome back everyone. Today we're going to be talking about how to select the best market to start real estate investing in. Let's dive right in. Before we dive into this video, I want to explain to you guys exactly why you should join my free Facebook group. My Facebook group, it's called Painless Flipping. All you have to do is go to Facebook, join it. We have free community, we have free masterclasses we do every week, we have free materials. We want to help you succeed. And we want you to network with people, so go check it out and join. But let's dive into this video. So why is it important to pick a market that is good when you start investing? Well, you don't want to go in the middle of nowhere where there's no flips going on. And I actually have an expert that I interviewed and I talked to, his name's Nicholas Nick, and we dove into exactly how he picks the markets when people come to him and want him to get leads for his clients. He actually tells them exactly where to go. So we're going to dive into that. We're going to learn from the expert on why picking a market is so important when you are marketing and trying to get leads. So everybody, let's dive right in and let me know if you have any questions in the comment section below.

Nicholas, let's talk about what's going on when people start and what they face when they just pick a random market and they don't know what they're doing.

Yeah, absolutely. I think, I think a big problem people make is they choose what everyone else chooses. You know, I mean, the downside of life is if we want to start there and it's our first pick, well, that probably means it's everyone else's first pick too. Okay. And this is where whenever we're finding hobbies like yoga, that's great because there's a bunch of people at yoga. We got a bunch of different people we can be friends with.

And you like yoga, brother? Hot yoga is fun.

Yeah. Yeah. But, you know, real estate is different. Like, you wouldn't open up a burger restaurant next to a bunch of other burger restaurants, right? You just wouldn't do that. You know, it makes sense.

Yeah, it makes sense.

However, every real estate investor in their yard isn't a big-ass sign that says, hey, I'm a real estate investor. So you can't really tell now. What I've learned, the safest bet is to stay away from two things. One is something I call a celebrity city. Okay, so a celebrity city is any city that everyone knows the name of. Okay, Tampa, Orlando, Atlanta, Phoenix, Los Angeles, Las Vegas, Chicago. Okay, if 3-year-olds know the name of these cities, you should stay away from these cities. Okay.

That's a bold statement, brother. That's a bold statement.

It's true. It's true. And, and when I say stay away, let me also be clear. It's not that it doesn't work. Arguably, these are the best cities in the world if you already have a contract, right? Because there is so many buyers.

That's correct.

However, the cost of that contract is going to be through the roof. And that doesn't mean that the closed deal isn't going to outweigh it. But the real rule of thumb is this: when you're playing— so let's use Miami, for example, right? Okay, well, the other tip— the first thing was celebrity cities. The other tip was tourist areas. Okay, so now the thing about tourist areas, and I'll go into Miami here now, is even if you're in a celebrity city and you don't want to get out of it, you got to get away from the tourism. Okay, if you're in one of these celebrity cities and you have a smaller budget, you really wanna be in the least touristy place. And since you're in the most touristy city, right? So finding the coldest spot in the hottest market, if you're gonna be too stubborn and not leave, that's what I totally recommend.

Hmm, okay, so let's talk about that. So we're specifically talking about if you have a marketing budget or you're cold calling or texting or you're doing any outbound, is that correct? Is that what you're saying? Even inbound too, right?

Yeah, whenever you're doing lead pursuit, right? Whenever there's some type of investment on the lead strategy, You know, and it's like, because what's happening in these markets, like one guy says, oh, I'm in the, I'm in the zip code with the most transactions. Well, that's great. But that also means that most other people are also transacting there. You know, if you think, if you do the math in reverse.

Right, right, right, right. So unless you're like a dispo company, only dispose deals for people in those areas, then it's, it's just going to be a little bit more expensive to get those deals. Now, it might— you might be able to make a bigger spread, but you're saying if the person is starting out new, doesn't have a big budget, playing in those areas could get you— you could outspend like your budget and not be able to get a deal.

Absolutely. So, so, you know, Miami, I actually Googled it. Miami is the 5th wealthiest city in the world, not America. Okay. And you should know that if you're investing there, because if the math works and it always works, that means that some of the people I'm competing with are the 5th, the top 5% wealthiest in the world as well. And that's okay if you want to invest in Miami, but if you're showing up to Miami with $1,000 in your pocket thinking you're gonna close deals, you know you're not going to because your competition's minimum budget is $5,000 a month. And even that guy's struggling. So, you know, and so it's just understanding who you're competing against. And it's okay to end up in Miami, but I want you to start in a place where you're gonna feel successful, where you're not gonna get defeated. If you're just starting out, you know, trust me, I've been in business 6 years, I'm still fragile, okay?

You know? That's business. That's business is fragile. We're always, you know, we're always fragile. We're always growing. We're always improving. So that's why we come to you guys with the truth. We come to you.

Right, yeah, you know, I have one down week and I'm like, oh my God, what does this mean for the rest of my life? And it's just one week, bro. It's a holiday, dude. Relax.

That's it. Yeah, exactly.

It's gonna be okay, you know? But, you know, the fragility is true. So this advice is really mainly based on lead generation strategies and to help protect your momentum. You know, I want, I want, if you would, sometimes when we run into these snags, whether it's financially or skill-wise, like in these markets, a lot of the other guys you're competing against, not only is their budget bigger, but their skill is stronger. You know, I recommend all of my clients, you know, I own a lead gen company. So naturally these aren't people with signed contracts looking for buyers. If they were, I'd be like, hey, you're great in these markets.

Bro, you want them to succeed or you don't? They don't get to keep working with you, correct?

100%. And I tell them selfishly, look, I'm going to give you advice, and the advice is the best results come from markets nobody wants to visit, okay? And that's really where you get the most results. I've seen people get 5 leads on a $1,200 campaign in a super saturated market, and we shift the budget to Arkansas, okay? And then they literally get 28 leads, they close a deal, and, and then everything, everything becomes real. And it's not Arkansas is the secret, but the number 28 is the secret because it takes leads to close deals, you know?

Well, that's— I like that you say that because when you say you want to market in cities that you don't know the name of, bro, I think Little Rock is the only thing I know in Arkansas. I think that's the only city I know.

That's right.

Right. So it's the same thing. Nobody wakes up and is like, let me hit up those other cities I don't even know the name of in Arkansas.

Right.

Mississippi.

Very few people are even saying Little Rock, right? Let alone everywhere else, you know? And it's like, and that's everyone else's. And I get kicked back, well, Nick, are there investors there? You know, there's no investors over there. And I then I have to remind people that every home that's for rent is owned by an investor.

That's correct. They don't live there. They're investors, right?

And so are you telling me that there's no homes for rent in the whole area? Every, everyone owns every property they live in?

Yeah.

Market, really? And then they go, oh yeah, that's such a great point. And so, but I understand it doesn't seem like people would be flipping in Arkansas, but you know, they do and they are.

Of course, you know, that's so true. So the reason why I wanted to talk about this today, guys, is, uh, a lot of people, they hear go market, right? So they immediately just spend, you know, money on a list with batch leads and they skip trace and they start calling. And when they don't see success after a certain amount, they're like, this doesn't work. But that's not the case. It's just maybe you don't have the budget to, uh, play in those bigger markets when you're facing me, uh, you're facing other people who their budgets are $10,000, $15,000, $20,000, $30,000 a month. Now you can still get deals. I got deals in Utah, Salt Lake, very competitive when I was new, but I was knocking doors, I was hammering phones, and it took me several leads. So you just got to weigh it. It's like it's going to take more calls, but if you get some, the contract's probably going to be bigger. So depends what you want. But momentum, like you're saying, it is important to stay active, bro. You need— if you're just calling, calling, getting smashed, you might want to just quit. But if you're calling, calling, and you know, your first deal is not that big, but at least you're having good conversations, you're talking, that might help you to see that this is real quicker.

Yeah, you know, spending, you know, spending $1,000 and getting 10 leads isn't bad. However, if you're looking for some momentum, you know, it can be like a little draining sometimes. You know, if you didn't start with a budget of $3,000, spending $1,000 to get 10 leads is horrible. But if you're a seasoned pro and you're like, yeah, averaging $100 a lead, you know, I mean, I had a guy call me the other day, he's in California, He says his average closed deal is costing him $17,000.

Wow. What market is he in?

He's in San Francisco.

Yeah, but. Right. The spreads are bigger, but still.

That's right. Well, that's exactly right. If you can't play— oh my God. And I told him at first, I was like, look, you're going to have a hard time cold calling. He goes, Nick, I'm spending $17,000. He goes, if you could get me a deal for just $8,000. And I'm like, well, when you put it like that, you know, we can definitely get you a deal at $8,000.

Yeah.

You know, even though if I said that to any other client, they would tell me I'm a scam and they'd slam the door in my face. But this guy's like, he's talking me into being my client.

Yeah, yeah. I talked to RJ the other day through his experience of doing nationwide, same thing as you. He says, you know, you're going to play in the West Coast, Washington, California, Utah, you know, those areas, you're going to have to spend more money to play in. But the contracts are bigger. So if you get started in those areas and you don't have the money to play, just know that that's the risk., but you go in those other areas. So let's, let's just kind of narrow it down. What are some states that no one thinks— you don't have to go over cities and dive really deep, but what are some states right now that you're like, those perform well, or that's like probably a good place to start if you're starting with lead gen?

You know, I'll be honest, you know, I don't really have a quick reference. What I try to do for everyone is I try to guide them to where they could be, right? So I do tell people the Midwest and any, any state you'd never want to visit. Like, to be 100% honest with you, if you look at a map of the 50 states and you're like, holy fuck, I forgot that was a state. That's a great place to start.

Yeah. I never want to go there. Right.

You're like, that's a good spot.

Like West Virginia, brother. I've actually gotten a lot of contracts. Those are hard to move in West Virginia. I'll tell you, at least for me.

And you know, there's just so many states that we totally— I mean, there's 50 of them. And if someone asked you to name any, you'd probably get to 10 before you didn't know the other 40. So, you know, it's like, there's really, it's really ripe out there and the least popular the name, the better off it is. But that's if you want to go super super virtual. My biggest recommendation is you go to the nearest suburban or rural market, okay? And then, you know, that place is going to have a reputation. They always do. The suburban areas around the city always have the reputations. You know, maybe you're looking for cows, maybe you're looking for indications in the market that, you know, it's a little bit more rural.

Did you say cows, bro?

Cows. Yeah, cows, gated fences, open land. That isn't where you want to be. That's a little too deep, but that's when you know you're close. Okay, it's good advice. Yeah, so it's like what I recommend is when you find those areas, you find the nearest suburban area and then you focus on that suburban area, and then that, that normally works extremely well.

You know, I like that. I appreciate you giving us your knowledge because that— this is what you do. You find out what's working. So there's no one better to ask than Nicholas Nick. No one better to work with than Nicholas Nick if you want him to call so you don't have to. So it works great with the strategy I teach. I— painless wholesaling, painless flipping. If you're going to go to a market, find the buyers first, right? So you're not stuck, you know, cold calling or getting leads and you're like, oh, who do I got? You can find that out before you start doing that. It can take a couple of days. It can take a week. But once you are ready to get in lead gen, I agree 100% with you. But if your strategy is not lead gen, obviously bigger cities, there's, there's different strategies.

So, you know, if you're, if you're a JV guy, And you want to be like you mentioned earlier, if you create a little dispo system where you're like, hey, bring me all your contracts. And just so you know, that's why a lot of the coaches are in— find out where the coaches are investing in. Bam. And they're in these cities where it's hard as shit to get a lead. So a part of the strategy, and no fault to anyone, is let me create a bunch of lead generators that I call coaching students and they bring me deals. And it's brilliant. It's brilliant. Nailed it. I'm not knocking it, you know, but That is their strategy. They don't want to cold call or send mail either. Instead, they're like, hey, I'll educate and I'll create an army of lead generators. I think it's brilliant.

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