70 Hour Workweeks to a $13k Payday with Real Estate Wholesaling
Do you feel like you're worth more than you're making at your job? CJ Hibbitts went from working 70+ hour weeks at a demanding job to making $13,000 on his first real estate wholesaling deal. Let's dive into his journey into real estate wholesaling.
Life Working 70+ Hours a Week
For years, CJ worked as a manager at an indoor arena that hosted rodeos, horse shows, and other events. He routinely worked 70-80 hours per week with no days off. From January 4th to April 22nd one year, he worked every single day.
This demanding schedule took a major toll:
- CJ missed out on important family events and time with loved ones
- He had to work holidays like Christmas and Thanksgiving
- He couldn't pursue hobbies or other interests
- His body was exhausted all the time
CJ knew there had to be something better out there. He was already making decent money, but he wanted more control of his time. That's when he discovered real estate wholesaling.
Getting Started in Real Estate Wholesaling
At first, wholesaling seemed too good to be true. CJ worried it might be some "get rich quick" scam. But when he found Zack Boothe's training program, he realized wholesaling is based on ethical principles:
"We're not trying to scam anyone. We're going to be transparent through this whole process of buying a rundown property or someone that just needs to sell for whatever reason it may be."
CJ took Zack's online course and learned the fundamentals of how to wholesale properties:
- Driving for dollars to find distressed properties
- Sending direct mail to motivated sellers
- Estimating repair costs and ARV to calculate offers
- Finding cash buyers to flip contracts
Even with great training, he still made some mistakes on his first few deals. But CJ persisted and kept going.
Finding His First Deal from Direct Mail
After sending out 300 yellow letters, CJ went on vacation in Tennessee for a week. While he was gone, he got a promising call from a motivated seller named Mrs. Wages. When CJ returned from vacation, he immediately sent out 1,500 more yellow letters.
Over the next month, CJ and Mrs. Wages played "phone tag" and left each other voicemails trying to arrange a meeting. Finally, she left him a voicemail saying he could view the property if he just showed up at a certain time.
The tenants let him inside, and CJ inspected the 2 bed, 1.5 bath house:
- Siding falling down in some areas
- No gutters, lots of leaves on roof
- Rundown truck and trailer parked in driveway
It needed some repairs, but had no major red flags. The tenants were extremely helpful, explaining what issues needed to be fixed.
After over a month of persistence, Mrs. Wages finally agreed to meet with him in person to discuss selling the property.
Calculating Numbers and Making an Offer
To prepare for his meeting with the seller, he needed to determine the ARV and calculate his maximum offer price.
CJ's mother and girlfriend are real estate agents, so he had them look up comparable sales to estimate the ARV if fixed up. He also talked with house flippers about typical repair costs in the area.
He used the common 70% rule to calculate his max offer:
ARV x 0.92 - Repair Costs & Fees = Maximum Offer Price
With an ARV of $100,000 and estimated repair costs of $5,000, his maximum offer came out around $95,000.
Negotiating with a Savvy Seller
When he arrived to meet with Mrs. Wages, she caught him off guard:
"I've sold real estate my entire life. I've bought tons of properties...I'm not going to play any games. You're going to tell me a price, right now."
Whoa! She meant business. Rather than make an offer, CJ asked some questions to better understand her motivation. She explained she wanted to split the money evenly between her children.
When she demanded CJ name the first price, he gave a range between $80,000 - $100,000. She instantly said "I think you're spot on."
CJ explained $100,000 was near his maximum price and asked if she'd come down a bit. She dropped to $95,000, and he offered to cover $1500 in closing costs if she'd accept $90,000. She agreed!
Finding a Buyer
Before CJ even got under contract, he had developed a cash buyer's list on Facebook with over 100 potential investors. One of them jumped at the chance to grab this deal without even seeing the house in person!
After covering the closing costs he offered, he made a quick and easy $13,000 on this first deal.
"Not slowing down...that's the hardest part, honestly, because you get that one deal and you want to focus all your energy just on that one deal. But the problem is if you do that...then you'll have no leads."
So now it's onward to the next deal!
We hope this gives you inspiration and a blueprint to get started in wholesaling real estate yourself. It takes persistence, but you CAN replace a traditional job with this business if you stick with it.
About Samantha Ankney
Samantha has been a media specialist for DealMachine for 2.5 years. She produces, edits, writes, and publishes all media that is distributed to the DealMachine and Real Estate Investing community.