Stop Losing Deals: Why Traditional Wholesaling Fails

What is painless flipping? So you want to start wholesaling real estate and start making money now, but you don't want to do it without having to spend a ton of money on marketing that only gets you a little bit of money back. And we also don't want to have to spend countless hours grinding away each day to start doing deals. Well, the bad news is what most people have been taught to do, traditional wholesaling, makes it impossible for that to happen. The good news though is there is a new way that I'm going to show you in this video that solves all those problems and can literally change your entire wholesale business overnight. So if you want to change your life and take your wholesaling business to another level, make sure to watch this video to the end because I'm going to tell you not only what's working in wholesaling right now, but I'm also going to show you how you can have the hardest parts of wholesaling done for you. So let me share my screen here with you guys. So let's start by taking a look at 111 Eugene Street. This was a deal that was a 5-bed, 4-bath, 2,100 square feet house, and the seller wanted $800,000. Now, the problem is that it was really difficult to comp and figure out an ARV. There wasn't very many comps to look at and none that were quite like this property. The few comps we were seeing sold anywhere from $500,000 to $600,000. Now, traditional wholesaling says to take the comps at $600,000 and then use the 70% formula.. And the 70% formula is the magic formula that can tell you exactly at what price something is a deal for any property in any market across the entire US, no matter who the buyer is. This is the logic of traditional wholesaling. All right. And the 70% formula is 70% times ARV, and then you minus the repairs and you minus your wholesale fee. So traditional wholesaling would have you take 70% times $600,000, which puts you at $420,000. Then traditional wholesaling says to just use a generic formula to calculate repairs. Use $40 per square foot for a medium rehab, which gives us an estimated repairs of $85,640. We'll say $85,000 to keep things simple. So we have $420,000 minus $85,000 in estimated repairs and then minus another $15,000 for what we want to make. And that puts us at a maximum allowable offer of a whopping $320,000. And traditional wholesaling says you should make your initial offer even lower than that so that you can hopefully end up at your max offer of just $320,000. Again, the seller was initially asking $800,000 and traditional wholesaling says to offer around $300,000 or less. Guys, the reason it's called the 70% formula is because it makes wholesalers miss out on 70% of the deals. Now, instead of getting cursed out and hung up on, well, what we did was we flipped it the painless way, which allowed us to know exactly what buyers would pay before we even made the offer or had it under contract. Some buyers said they could offer around $610,000, $630,000. After the seller went through the painless process, she saw what prices the investors were coming in at. So after knowing and understanding more, she now said she would accept a cash offer price of $652,000. And it's not because we told her, oh, you're wrong for wanting $800,000, or, you know, using cheesy sales tactics like, oh, well, you know, there's this house over here that sold for only $10,000. No, she was willing to come down on price because she saw the proof from the buyers themselves without us being the bad guy. She would have never come down on price or even talk to us again if we tried initially offering her $250,000 to $300,000. And just think about how lousy someone feels after making an offer like that and getting hung up on. Speaking from personal experience, I can say that it makes it really hard to want to stick with this business when doing things the traditional way. And guys, I didn't even tell you the best part. The best part is the investor that we sold this deal to paid $739,000 and we made over $80,000 on this one deal. And that investor went on to flip that property for over $900,000. If we were traditional wholesaling, that seller would be stuck with the problem. The investor wouldn't have made a nice profit. The new homeowners wouldn't have a beautiful new residence, and we would have lost out on over $80,000. This is happening every single day to traditional wholesalers. Let's talk about King Street. King Street was an off-market property to where the seller was working with an agent, so it wasn't listed on the MLS, but there was an agent involved handling all the negotiations and everything. The seller was also in pre-foreclosure. He was running short on time and was about to lose his home to the bank and get nothing. The agent was accepting cash offers only and was accepting highest and best by a certain date. Though this property was off market, the agents still did a lot of outreach for it. And so there was a ton of investors and wholesalers competing for this deal, and some of them were really big investors and really big wholesalers. And again, the situation was, give me your highest and best cash offer by this date. Now, for this scenario, traditional wholesaling, honestly, it's not even worth wasting your time. Why? Because with traditional wholesaling, you're just competing on price, and traditional wholesaling pays the lowest compared to everyone else, usually a lot lower, right? We already went over the 70% formula and you know how that goes. Also, you're dealing with an agent. They're not going to want to see an offer with a 2-week inspection period and asking to make the contract assignable. They know what that means. They're not going to be having it. All right. So what did we do? Well, we flipped it the painless way. We flipped the house before we even make the offer. This allowed us to make an offer that no one else can compete with and make an offer that we knew was $20,000 to $30,000 lower than any other competing investor. How? We let the buyer tell us what they're able to do before we make the offer. So our offer had a zero-day inspection period, a $50,000 nonrefundable earnest money deposit, and we allowed the seller to stay in the property for an additional 2 weeks after closing so that he could figure out his moving situation after he had had some money in his pocket. Now, was our offer $20,000 to $30,000 less than competing offers from other wholesalers and big investors? Yes, it was lower, and it was an absolute no-brainer for the seller and the agent. They were thrilled with the offer, and they accepted it without hesitation, and we made just under $35,000 wholesaling that property. More importantly though, we were able to help that seller and save them from becoming another victim to traditional wholesaling. That seller was about to lose his home and get nothing. All the other traditional wholesaling offers have inspection periods so that they could cancel the contract if they couldn't sell the property in time. And that's because with traditional wholesaling, they don't actually know if they can sell the property and fulfill on their promises. The problem is that the sellers don't fully understand the risk they're taking when they say yes to an offer like that. And in many cases of traditional wholesaling, the wholesaler cancels the contract and the seller's left high and dry in a terrible situation they now can't get out of. In this specific scenario, traditional wholesaling would have lost this seller over $200,000. But luckily that wasn't the case. And ah yes, Apple Blossom Lane, a creative finance deal. My least favorite. I say it's my least favorite because I have wasted so much time trying creative finance financing offers with sellers and agents that just weren't leads to begin with and were just a complete waste of time. A little side pro tip here: just because a creative solution could work and may look nice on paper, it doesn't mean that the seller will say yes to it and that it's a deal. For this deal, the property was a deal that had been under contract with multiple wholesalers before. It was kind of an awkward and quirky house, so it was really hard to comp, and the seller was also really fixed on their price. And a creative finance offer was the only thing that would be able to make sense and potentially work. Now, the problem with traditional wholesaling here is that first, well, you need to already know all the ins and outs of all the different creative strategies. And second, there is a million different ways you can structure a creative finance deal. Traditional wholesaling has you wasting hours, one, trying to explain all the different options to the seller, and two, having to spend more time trying to put together a number of different options for the seller to consider. All the while, you have no idea if these are terms a buyer would even be interested in. Again, guys, I have wasted so much time in the past doing this. I truly have. So now I'm still not the biggest fan of creative deals, right? But mostly because it's just a lot of paperwork and I hate paperwork. But with painless flipping, you don't have to waste all this time figuring out and trying to put together all the different options. I'm able to just have the buyer tell me exactly what the price and terms need to be, and I make it happen. I don't even need to be an expert or know much about any of the creative options. The buyer and title company will tell me everything I need to know. And that's exactly what happened with this deal. We just had the buyer tell us what he wanted the terms to be, and that's how we set it up. And we made $10,000. $10,000 on a deal no other wholesaler could sell. And we did it with minimal time and effort. So what's the big point here? The big point is traditional wholesaling doesn't work because it doesn't matter how good of a deal I have under contract. If I don't have a buyer that is ready, able, and willing to pay me for it, I don't make any money. And I can't know if it's a deal or not unless the buyer tells me, because it's the cash buyer, the investor, that's the one who's buying the deal. That is the one who is paying us. That's who we need to go to for answers. Traditional wholesaling doesn't work because it's a completely backwards way of doing things. If you've been actively wholesaling, or at least trying to, I can guarantee that you've come across this problem to where you look at a property or you talk to a lead. And what happens 99% of the time? 99% of the time we look at the deal and we go, well, it might be a deal if the ARV is up here and the rehab is only this much. But it might not be a deal if the ARV is really only down here and the rehab is really this much, right? And the answer on if it's a deal or not is, well, it depends. It depends on who I'm talking to and what that buyer thinks and what they're planning to do with it. I can't use a single generic formula like the 70% formula to tell me if something is a deal or not a deal because every market is different. Every buyer is different because I can have a number of different buyers go and look at the same property and I can have one guy who he's looking to buy the property, move into it himself, fix it up, and then sell it. I've got a second guy who has his own crews that are going to fix up the property and then sell it. I've got a third guy who listened to one podcast and then he went out and got all premium subcontractor quotes and he's telling me I'm absolutely crazy and the rehab's twice what I think it is. Right? And he's looking to fix it up and sell it. And then I've got a fourth guy. I've got a fourth guy to where not only does he have his own crews that are going to fix it up, but because he does so many flips in volume, he buys materials in bulk at a massive discount and he's able to do that same project for a fraction of the cost of anybody else. And guys, that's not including— well, what if someone's looking at this property as a rental property? What if they're looking to turn it into an Airbnb? What if they're looking to do a pad split and rent it out by the room? What if someone's going to put an addition onto it and convert it into something different? What if someone's going to convert it into an assisted living facility. Guys, you get my point, right? And that's the great thing with real estate is there's so many neat things somebody can do with a property. As far as whether it, what price is it a deal at? Well, it's gonna be different for each one of those people. And that's why I have to go for that. I can't possibly know that answer without them. Again, it depends on who I'm talking to. So let's go back here. Lastly, we have Lund Circle. So this was a type of deal that can literally be found in minutes. There's such an abundance of these opportunities. But the thing is, they can't be done by traditional wholesalers. See, this was a deal that was being sold through a big wholesaling company, and their company policy is that they are unable to work with other wholesalers. They cannot work with a wholesaler even if they wanted to, because the company policy will not allow it. They can't and won't do any JV agreements. So traditional wholesaling, well, they can't do it because they won't work with wholesalers. And they have the same exact strategy, right? Because these big companies are also still doing things the traditional way, which you already know has massive flaws. See, traditional wholesaling teaches you to put the deal together in an email and then blast it out to a massive list of tens of thousands of buyers. And that's how it's done. Well, yeah, maybe that worked 5, 10 years ago, but as you guys already know, wholesaling has become too saturated for that to work. The game has changed and the old way of doing things, it doesn't work anymore because traditional wholesaling has become so saturated saturated, buyers will see the same deal 3 or 4 different times from 3 or 4 different people at 3 or 4 different prices. And to top it all off, traditional wholesaling doesn't know what price something is really a deal at, so they just guess and aim for the fences trying to make these huge assignment fees, and they advertise ridiculous prices to investors that are so far from where they would need to be at that the buyers don't even waste their time to reach out. So this was a perfect example of that. This was a deal that literally took me 15 minutes to do on a Friday morning because these opportunities are everywhere. I'm sure you get emails and see posts about, you know, people trying to sell wholesale deals all the time. Finding this deal took 5 minutes and then 10-ish minutes to use the painless process to find the right buyer and have the right conversation. This was all done on a Friday morning, and then I decided to have a nice 3-day weekend after that. The crazy thing about this whole deal was that the buyer we sold it to was already on that big wholesaler's list and they already saw the deal. But that wholesaler had the wrong strategy. And when you flip the painless way, it opens you up to a world of opportunities that weren't available before. Now you don't need to pull these huge expensive lists to market to and have this crazy expensive marketing budget each month or spend endless hours prospecting and trying to find leads. When you flip the painless way, you're able to do so much more with very little because you've plugged all the holes in that leaky bucket. You no longer have all these moneymaking opportunities going to waste, and you're now able to use channels that weren't even available to you before. Fast, inexpensive, high-profit channels. So if you want to be able to change your life, change the way you wholesale, this is it. This is what actually makes the difference. We used to do a 90-minute masterclass teaching this. You all watched our masterclass on a Thursday. Found a deal the next day and a buyer, and he got paid money in his pocket 7 days later. 7 days later. So if you know somebody that wants to wholesale, hates their life, hates their job, and wants to be a full-time investor with a thriving wholesaling business, this is it. This right here. They need to go do what Yoel learned, what Henry learned, what Nelly learned. Nelly started out with traditional wholesaling and was struggling to get any kind of momentum or make any progress for over a year. We taught her how to flip the painless way, and we helped her close over 6 figures in assignment fees in less than 6 months. And one of the reasons she was able to do that is because we helped actually do the hardest parts for her. See, inside the Painless Flipping Apprenticeship, we don't just give you this huge book or course of information and say, here it all is, here you go. Just let us know if you have any questions. No, we don't leave you hanging, feeling overwhelmed and stuck, wondering what to do next. No. In the Painless Flipping Apprenticeship, we actually work with you one-on-one and even do the hardest parts for you. Want us to call and negotiate the deal for you? No problem. Want us to find the buyer for you? No problem. Want us to do all the paperwork for you? No problem. Want to still do it yourself and just want us to tell you what the ARV is, what you should offer, and exactly what to do next to turn it into a closed deal? No problem. Or Maybe you just want somebody to check in once in a while and see how you're doing and how things are going. No problem. We teach you how to wholesale the painless way and we do the hardest parts for you so that you can start closing deals. Now, if you're even remotely looking to wholesale real estate and if this video resonates with you at all, do not hesitate. Do not wait another second. Don't let another month, another year go by without hitting your goals. Click the link down below now and book a call now and we can see if this is something that might be a right fit for you. Click the link down below and book a call now.