Overcoming Obstacles to Get Your First Wholesale Deal
Starting a real estate investing business can seem daunting, especially if you don't have a lot of money or experience. But our guest today proves that with persistence and hustle, anyone can get their first deal done.
David Olds was laid off from his sales job during the housing crash in 2008-2009. He only had $5,000 to his name when he moved his family of five, including three dogs, from Florida to Tennessee to pursue real estate investing full-time.
Through driving for dollars, sending direct mail, and hustling day in and day out, David got his first wholesale deal done within two months of arriving in Tennessee. Since then, he's gone on to do over 1600 wholesale deals and build a multi-million dollar real estate business.
We'll share David's journey to real estate success, starting from the very beginning when he knew nothing about wholesaling. You'll learn:
- How he found motivated sellers and got deals under contract
- Creative ways to fund your first deals when you have no money
- Tips for partnering successfully (or avoiding partnerships altogether)
- Advice for new investors just getting started
- How David traveled the world through real estate
- And much more!
Even if you feel like you're at a disadvantage, David's story will inspire you to take action and get your first deal done. So let's dive in!
From Corporate Job to Losing it All
David didn't start out as a real estate investor. He had a good corporate sales job and was using his income to rehab and flip houses in Florida from 2002 to 2009.
"We were in central Florida, just buying houses, moving in them, buying some other houses, and actually tried wholesaling and could not make it work," David said.
Wholesaling involves putting a property under contract and then assigning that contract to another buyer for a fee. David tried wholesaling in Florida but couldn't get his first deal done.
Then in 2008-2009, the housing market crashed. Home values dropped 25% in just four months, and David lost all his investment properties to foreclosure. He and his wife both lost their jobs amidst the economic turmoil.
With hardly any money left, they made the bold decision to move to Tennessee to pursue real estate investing full-time. This was their chance for a fresh start.
Moving to Tennessee with Just $5,000
David and his wife lease optioned their house in Florida for a $5,000 down payment. That $5,000 was literally all the money they had when they arrived in Tennessee.
David recounted the experience:
“If there’s like a level where you’re broke, we were half of that. We didn’t even have enough money to be considered broke."
They knew real estate was the only path forward to replace their lost income and feed their family. David described their mindset:
“You have to pay your bills, you have to feed your kids, you have to put new shoes on your kids and your dogs like dog cookies, right? So it was the thing for us. Real estate was the only thing that we did right."
With no money and no jobs, wholesaling houses was their only option. The stakes were high, but David and his wife fully committed to making it work.
Driving for Dollars to Find Deals
As soon as they arrived in Tennessee, David and his wife started driving for dollars every single day.
Driving for dollars involves scouting neighborhoods for vacant or dilapidated houses that might be owned by motivated sellers. David would make a list of 200-300 potential deals per day.
Then his wife would look up the property owners and send handwritten yellow letters or direct mail postcards to the addresses. This was their only form of marketing since they couldn't afford paid ads or skip-tracing services.
David stressed the importance of high volume with driving for dollars:
“I’ll see a lot of people, and I try to be active in Facebook groups where I can, oh, I went out and got three deals or three houses today or ten houses today, and nobody's answering me when I call them. I'm like, well, you need 100, and then tomorrow you need to go get 100 more, and then you need 100 the next day or 50 the next day."
With consistency over time, driving for dollars yielded motivated sellers who wanted to offload their properties.
Getting the First Deal Under Contract
Incredibly, David got his first wholesale deal under contract within one month of moving to Tennessee.
It came from their driving for dollars efforts. David spotted a run-down "for rent" property a few blocks from his house. He called the number on the sign and discovered the owner was struggling to rent it.
David asked if they might be interested in selling the property instead of renting it. The owner said yes, and they negotiated a wholesale contract for David to assign to an end buyer.
“That first deal always feels like an out of body experience, right when somebody's actually getting ready to sign the paperwork,” David said.
He assigned that contract for $8,000 in profit. Considering David only had $5,000 to his name, this was a massive payday!
Funding Deals Creatively As a New Investor
So how did David fund that first deal? He revealed some creative strategies:
For his first deal in Tennessee, David structured it as a lease option instead of a straight wholesale:
“We worked out a deal where we found them a lease option buyer. I think it was like $2,000 down or $2,500 down. We got to keep the $2,500, and the buyer that we put in place was going to make the payments to them with an option to purchase within two years."
By bringing the buyer's money to the table, David could fund his $2,500 assignment fee without any cash out of pocket.
Another way he creatively funded deals was by taking over the existing mortgage:
“We purchased the home and we took over the seller's mortgage. So there were two of them. One was a duplex. The sellers had moved to Las Vegas and they didn't want to manage it anymore. We made them an offer, I think we gave them $10,000 and said, hey, basically we'll make your payments on this duplex for you for the balance."
As a new investor, don't let a lack of cash hold you back. Get creative with transactions like lease options and seller financing so you can fund your first deals.
Growing the Business Through Direct Mail
Once David completed his first deal, he was highly motivated to keep the momentum going.
Direct mail became an important part of generating leads consistently:
“My wife, who just was such a champ, she would sit there at night from four to ten or whatever, going through the property appraisers website, typing out and making this Excel list of mailing addresses. And then she would literally handwrite letters and send out mailers and then postcards."
They put all their effort into marketing and lead generation:
“This wasn't like, oh, I'm going to go send three postcards this week. This was what we were doing."
With a relentless work ethic, David scaled up to doing multiple deals per month through direct mail combined with driving for dollars.
Key Takeaways from David's Wholesaling Journey
There are a few key lessons we can take from David's incredible rise from nothing to completing over 1600 wholesale deals:
1. Commit fully and make real estate your top priority. David was absolutely obsessed with making this work because it was the only way to provide for his family. Are you willing to commit at that level?
2. You don't need money to start. With only $5,000 to his name, David proved deals can be done through creativity and hustle. Lack of funds is not an excuse.
3. Driving for dollars works. David credits driving for dollars as the #1 strategy for finding motivated sellers. Target distressed vacant properties.
4. Talk to everyone. David called for rent signs, yellow letter leads, driving for dollars properties, etc. You have to talk to a massive amount of people to get deals.
5. Direct mail amplifies your marketing. As David's business grew, direct mail provided a scalable source of motivated sellers. Combine it with driving for dollars.
6. Partner only if absolutely necessary. David advises against partnerships unless you 100% need someone else's skills. Hire help a la carte rather than giving up equity.
Advice on Partnerships From 1600 Deals
Given his vast experience, I wanted to pick David's brain on whether new investors should partner with someone on their first deals.
David has had several partnerships go bad over the years, so he offered this advice:
“I don't recommend partnerships here's, typically for me, and I'll kind of project that onto other people, that the reason people partner is because they feel like there's something they can't do that somebody else can come in and do better, right?"
“The truth is that person rarely is ever going to come in and fulfill all of those things. Partnerships are very difficult because it's kind of like a marriage without the good parts."
Instead of partnership, David suggests hiring help on an hourly basis:
“It's far cheaper to hire somebody hourly than to give up 50% of your equity."
The only exception is if you partner with someone you already know well and have worked with extensively in the past. Having an existing relationship prevents many issues down the road.
Overall, David believes you should rely on your own hustle and abilities to get your first deals done. Partnership is like "training wheels" that may do more harm than good.
How to Travel the World Through Real Estate Investing
A major incentive for getting into real estate is having the freedom and money to travel. We asked David how he's traveled so extensively over the years.
His advice was simple: "Go do one more deal."
Whether it's a fancy car, dream house, expensive watch, or 3-week trip to Europe, just calculate how many more deals it will take to fund that lifestyle. Then put your head down and make it happen.
David emphasized that real estate comes down to your mindset:
“That's the difference between entrepreneurs and kind of people that work for an hourly thing, is entrepreneurs are like, okay, well, how do I do it? Oh, it's just one more deal. Great. Let's go do it. No problem, right?"
He even treated himself to a Rolex along the way as a reward for success!
Real estate provides endless freedom, you just have to execute consistently over time. As David put it, commit fully and go out and find one more deal.
Advice for New Investors
Since David has done over 1600 wholesale deals, I wanted to close by asking his advice for new investors just getting started today. Here are his top tips:
1. Find leads relentlessly. Whether it's driving for dollars, direct mail, or other marketing - you need a high volume of motivated seller leads. Make huge lists daily.
2. Call everyone. Talk to all your leads with persistence. Take every call as far as you can go to uncover motivated sellers.
3. Target bread-and-butter neighborhoods. For your first deals, skip luxury areas. Pursue lower-priced homes for higher volume.
4. Use proven marketing. We Buy Houses works for a reason. Don't overcomplicate things when you're new. Stick to the basics.
5. Don't quit. You may fail and want to give up early on. But stick it out - success will come. Stay persistent.
As David said, real estate investing delivers an incredible lifestyle. But you have to put in the work, especially in those early days.
If you commit fully and follow this advice, there's no limit to your success and freedom through real estate!
I hope David's incredible journey inspires you to take action if you're new to real estate investing. With drive and persistence, you can join the ranks of successful investors. If you only retain one concept from this post, let it be this:
Go out and find one more deal.
That's the mindset that propelled David from unemployment with $5k to completing 1600 profitable wholesale deals.
What are you waiting for? Drive for dollars, make calls, send mailers. Be relentless. Success is right around the corner.
About Samantha Ankney
Samantha has been a media specialist for DealMachine for 1.5 years. She produces, edits, writes, and publishes all media that is distributed to the DealMachine and Real Estate Investing community.