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Michael went from being a W-2 employee to making $100,000 on his very first wholesale real estate deal in 2017. In this blog, we cover his story for those looking to achieve financial and time freedom through wholesaling.
Michael's Background
Michael had been actively investing in real estate for 4 years prior to getting into wholesaling in 2017. He was doing traditional fix and flips, so he already had money coming in from properties he had sold. When he started direct marketing to sellers, he spent a lot on marketing, including mailers. The $100k wholesale fee came from a deal that he got through direct mail.
The property was a two-family home in the very high-end town of Great Neck, NY, one of the top school districts in the country where homes can sell for $5-10 million. Michael was shocked to find a duplex listed in this fancy area. After checking it out, he realized there was a small pocket in Great Neck that wasn't so nice, and this property was in that pocket.
The seller said it was horribly disgusting and didn't even live there himself. One unit was rented out and Michael couldn't even view it. But based on the price the seller wanted (around $500k), Michael knew it could be a great wholesale deal.
The Wholesale Deal
Michael locked up the property for around $500k and showed only the one unit he could view. He ended up selling for $620k, having to pay about $12k to the buyer's agent.
What exactly is wholesale real estate?
Wholesaling involves getting a property under contract and "assigning" that purchase contract to another real estate investor for a higher price. The difference is your profit.
For example, on a $500k property, you'd typically need $100k down with traditional financing. But with wholesaling, you don't even need to close on the property yourself - you just connect a buyer willing to pay more than your purchase price.
Why Michael Started Wholesaling
Prior to wholesaling, Michael was doing traditional flips. At one point he was flipping 17 houses simultaneously and was completely overwhelmed dealing with contractors, permitting, etc.
He spoke with Brad Chandler of Express Home Buyers, who had transitioned his own business from rehabbing to wholesaling with the help of Robert Wensley. This allowed him to scale his business up tremendously. Wholesaling removed all the complex project management involved with rehabs.
This convinced Michael to give wholesaling a try, and he hasn't looked back since! He wishes he could wholesale every deal now rather than rehab properties.
Michael's Advice for New Investors
When asked what marketing strategy he suggests for new investors just getting started, Michael said:
"The general plan is to get a list of people or properties, depending on where you are. In NY the public data isn't great, so I'd recommend buying a list first. Choose an area you want to operate in. We look at what lists are available - tax delinquent, code violation, vacant, etc. You want a list of about 10k properties, skip trace it, and start calling or texting the list. Use a dialer to be efficient."
Michael stressed the importance of having conversations with sellers, even if you get hung up on. He says you have to push past the fear of rejection and be confident on the phone.
Surprisingly, he's found newer investors are often more afraid of getting a YES from a motivated seller, because they fear they won't know the next steps and will lose the deal. This is where having a mentor or JV (Joint Venture) partner is extremely helpful when you're just starting and don't have experience guiding deals through closing.
Lifestyle Freedom
When asked what real estate investing has done for his lifestyle, Michael answered:
"The most important thing to me is time freedom. Many of my friends are doctors, lawyers, bankers - they can't just take time off whenever they want. I'm sure some make more money than me, but having the freedom of time is so much more valuable. For 17 years I had to ask permission to take vacation days. Now I don't have to ask anyone!"
Michael has 4 kids and 2 grandchildren on the West Coast. He and his wife travel to visit them every month. He says wholesaling gives him the flexibility to do this. When his grandchildren were born, he was able to spend 7 weeks in California with his new grandchild!
Having a virtual team in place with a strong acquisition system allows Michael to have this freedom. He says his only US employee is a disposition manager who lists and sells his inventory. The rest of his team is virtual.
Final Tips
For those still working a W-2 job but wanting more freedom, Michael suggests:
- Don't quit your job! Wholesaling can be done part-time.
- Start small - buy and skip trace a list for under $1k total. Call the list for free.
- Use a dialer ($100/month) to increase efficiency.
- Work the list consistently for 6-9 months. Should generate at least 1 deal from a 10k list.
- Partner with other local investors to help with dispositions if needed.
Michael's business is Biggerflips.com and you can connect with him on social media under "Michael Pinter Real Estate".
Michael's story shows that with dedication and perseverance, you can replace your W-2 income through wholesaling real estate and gain financial and time freedom.
If you have any other topics you'd like covered in the blog, please leave a comment below!