A Real Estate Wholesaler?s Startup Story

?Sometimes you have to go out on a limb; that?s where the fruit is.?
-- unknown

In 1999, after a year of reading books, harassing local real estate investors and faxing typed letters from the floor of my apartment (Yes, with a typewriter. I didn?t even own a computer.), I bought my first house for $36,000. It was a duplex located at 765 Bonnie Brae Avenue in Atlanta, Georgia. I bought the place with a no-credit-check, hard money loan at 10pts/18% interest, yikes.

I had just quit my graveyard-shift job working in an archaic, limb and digit-risking envelope factory. It looked like one of those early 20th century sweatshops, straight out of a Stephen King novel. I was at my wit?s end and finally decided my arms were better suited for carrying a cell phone than inserting them all night into a possessed mangler for $10 bucks an hour. I had two weeks before my rent and car payments were due, and I had no money.

I was able to pull some cash out of the repair escrow to stay afloat. While putting on a new roof and painting the house, a lady from across the street who managed a rooming house (or more accurately, a drug dealer who managed a crack house) had come over to me and said she wished I could do that to her house. I said give me the name and number of your landlord. Within two weeks, I had seven rooming houses (drug houses) under contract. These houses were beyond imagination, piled with filth, raw sewage and, in all reality, should have been bull-dozed.

When I spoke with the neighbor?s landlord, I didn?t even know what wholesaling was, let alone how to fill out a contract. So I called a wholesaler who was already well established, who also happened to be one of the investors I was pestering with my fax machine, my one and only piece of office equipment. I asked him to show me what to do with the contracts and to help me sell the houses. I, in return, would split my profits.

I closed my first deal, went to Office Depot and had a field day. I bought my first desk and my first swivel chair. I bought my first computer, my first printer and my first dry erase board. I even bought my first cell phone; and from that day forward, every time it rang, it sounded like, cha-ching! I was in business. I was my own head honcho operating from my own high-tech command center. My life changed DRAMATICALLY.

I ended up buying and selling four other houses on that same street. The rehabilitation that was going on, in turn, had brought other investors into the area. Over the course of a couple years, the whole street had turned from a war zone into a neighborhood. Some homeowners complain about investors, citing more rentals and lowered property values, but this would be a debate for the suburbs. My business is lower-end, inner-city, and from my personal experience, what I do is positive.

I had wholesaled properties independently for a number of years in Atlanta and managed to move 50 plus houses, but it was a tough gig to pull off without cash. I started out of the gates strong, but had eventually begun chasing my tail. With the influx of prime-time real estate shows, late-night infomercials and the hot Atlanta market, large, well-capitalized cash buyers were coming out of the woodwork. The game of tying up contracts as a means to control and turn enough properties to sustain my, now, over-extended lifestyle had caught up with me. I had to start from scratch once again.

Many successful entrepreneurs and even multi-millionaires have hit rock bottom several times before finally establishing a foothold on real wealth. The moral of the startup story is you just have to do it, and sometimes you just have to do it again!

John Lydic
Author of ?How to Wholesale Houses?
www.How-To-Wholesale-Houses.com