Tim Bell - Cardinal rules of wholesaling

Alright, so again, there are three strategies. Wholesale, fix and flip, buy and hold. We are going to focus on wholesale because that's going to get us paid most quickly. That's what we want to do. Now, I don't know if you remember, back in the 1960s, there used to be a team called the Green Bay Packers. They're still around. And their coach was named Vince Lombardi. Now, Vince Lombardi was a famous coach. In fact, he's such a famous coach that they currently named the super bowl trophy after him. It's called the Vince Lombardi Trophy. Well, way back before there was even a Super Bowl, Vince Lombardi was the coach of the Green Bay packers. And he was famous for his approach to football being basic, being fundamentals, being execution of a very few things, very few plays. He would, on the first day of spring practice, he would sit all the professional football players down into the, in the classroom and he was famous. He would hold up a football and he would say, gentlemen, this is a football. Well, obviously they were professional football players. They knew what a football was. The point that he was trying to make is we're going to start from the beginning. We're going to start with the basics and then we're going to work our way up and we're going to build from there. Now, I've never been able to verify this, but I've been told that the 60s Green Bay packers, who won the world champion and were a very famous team and did a great job against a lot of other teams, had eight plays. They had a total of eight plays. Eight plays to the right and eight plays to the left. That's all they had. We can all agree that's not very many plays for a professional football team. Obviously, most professional football teams have many, many more plays than that. And in those days they did too. But the Green Bay packers under Vince Lombardi and Bart Starr and Jerry Horning and Jerry Kramer and all those famous 60s football players, they performed the fundamentals very, very well. They were excellent at executing those eight plays. So like Coach Lombardi, I want to make sure that you understand the basics of wholesaling. In my experience in teaching thousands of students and in doing wholesaling myself, I have found that if you understand the basics, you will flourish, you'll do well. If you don't understand the basics or you're sketchy about how a wholesale deal works, you will flounder. It will be challenging for you, it will be difficult. So I want to make sure that you do have the basics down and so that's what we're going to talk about now is wholesaling basics. Now, the materials that you have that I've sent to you have this information, of course, in them also. And you can certainly review the same information in there. Everybody learns a little bit differently. If you want to learn by reading, that's great. If you want to learn by listening to me, that's great. If you want to do both, that's terrific, too. I encourage you to learn whatever way you need to learn. Remember, this is not about my teaching. This is about your learning. That's the most important part here. So in regards to the basics of wholesaling, we have to understand that a wholesale transaction is an A to B to C transaction. There are three parties involved in a wholesale transaction. If you don't have three parties, then you have something other than a wholesale transaction. In a wholesale transaction, there is always a seller, then there is you as the wholesaler in the middle, and then there is the buyer. Okay? Your job is to essentially accommodate those two people getting what they want out of the transaction. That's how wholesaling works. So, all right, so let's talk about what I consider the cardinal rules of wholesaling. Now, when I first started doing a lot of wholesaling and teaching people how to wholesale, I basically adopted these rules to help people be more successful. If you will follow these two rules, you will flourish. You will do fabulously well in your real estate investment business, in your wholesaling. If you don't follow these two rules, then it will be a big challenge for you. You will find that you will receive a lot of resistance in your business. But if you'll follow these two rules, then you will find that it'll be a lot easier for you. Okay? Rule number one is the deal that you structure for for the next person, the C person, must be a good deal. It must be a good deal for that next person. If it's not a good deal for the next person, it's really simple. They just won't show up to buy it. So it's got to be a good deal for that C buyer. That person, if they don't perceive it to be a good deal for them and help them to accomplish what they want to accomplish, either as a fix and flip investor, a buy and hold investor, or a mom and pop homeowner, then they're just not going to buy it. They just won't show up. Have we. We've all gone shopping, we've seen something that we wanted, and then when we check the price. We realize that it's too expensive, it's not right. And what do we do? We set it back down and we walk on and we look for something else. That's how everyone shops, including the wholesale buyers. So again, cardinal rule number one of wholesaling is the deal you structure must be a good deal for the next person, the C buyer. The C person, the end buyer of that property. If it's not a good deal for them, they're just going to yawn and walk away. They're not going to buy it. The second rule, the second thing that you must follow to be successful as a wholesaler, in my opinion, is that in creating a good deal for the next person, that C buyer, you also have to build in a profit for yourself. Now, a lot of people say, wait a minute, Tim, duh, I have to build in a profit. Of course I know that. How could I forget that? Well, you would be amazed at how many people I talk to on a regular basis. I'm talking to them about their wholesale deal. We're talking about the numbers. We're going through the formula, which we'll go through in a little while here. And I say, yeah, that's a terrific, a terrific fix and flip deal. You need to go ahead and go do the fix and flip on that property. And they say, no, no, no, I'm going to do a wholesale on that property. I'm going to wholesale it out to a fix and flip investor. And I say, well, where's your profit built in? And then they get real quiet on the other end of the line and they say, ah, I forgot to build in a profit. Yeah, you did. So I don't want that to happen to you. And so that's why I want to reiterate that building a profit in is important. It's critical that you help people. Helping people is a very, very important aspect of life. And it's critical to your real estate investment business and your success in life that you focus on helping people. However, you must also make a profit when you help people. If you don't make a profit when you help people, then pretty soon you'll be so destitute that, that you won't be able to help people anymore because you'll be so worried about your own financial situation. Obviously that's not acceptable. So remember, it's got to be a good deal for the next person. And number two, you've got to build in a profit for you. Those are the two cardinal rules. Again, if you'll follow those two cardinal rules, your wholesale business will be so much easier for you. One of the biggest problems that current wholesalers have is that they try to violate rule number one. In other words, they try to create a deal. They put the deal under contract with the seller, they have it all ready to go, and then they try to sell it to a wholesale buyer. Well, they work on what I call the bigger fool theory. The bigger fool theory says I'm going to find somebody who's a bigger fool than me that will agree to pay more for that property than they should because I agreed to pay more than I should. Don't do that. That's not a good way to operate, okay? It will cost so much stress in your life and it'll cost so much anxiety, and it will cause you to. To fail as a wholesaler. Again, if you'll follow just those two rules, your success as a wholesaler will be insured, and that's really what you need to do.