In the world of wholesale real estate, persistence and strategy are key. Think of it as a numbers game where, similar to basketball, more shots eventually lead to scoring points. This blog article delves into the tenets of probability law as applied in real estate wholesaling, illustrated via an uplifting tale of success. Discover how consistent effort and smart strategies can turn potential into profits.
The Law of Probability: A Real Estate Fundamental
The law of probability is a simple yet powerful concept: keep taking shots, and eventually, you'll make the basket. In real estate wholesaling, this translates to making consistent efforts to find deals, even in the face of initial failures. It works on the principle that increased activity increases the chances of success.
A Journey from Zero to Success
Meet Rai Hamida, a real estate investor who exemplifies this principle. In 2018, Rai embarked on his real estate journey, but it wasn't smooth sailing initially. Despite facing setbacks for nearly ten months, Rai's persistence paid off when he secured his first deal, making a notable $7,500.
First Deal: A Lesson in Persistence
Rai's first deal came from an expired listing that had failed two years prior. The homeowner had lost hope, but Rai's approach represented a new opportunity. Although the property needed a price cut for repairs, Rai sold it quickly and made a good profit.
"Follow-up is huge... nobody is willingly and lovingly going to sell you their house at 50% off. You have to be there." - Rai Hamida
Strategies and Tools for Success
Leveraging Software Tools
As technology advanced, he used more tools like DealMachine. This helped him get better data and find potential deals more efficiently. These tools have become essential in modern real estate wholesaling, offering vast databases and contact information.
Cold Calling and the Law of Probability
An essential part of Rai's strategy is cold calling. By making consistent calls daily, the chances of landing a deal increase dramatically. Rai recommends making at least 30 calls per day for three weeks to get a feel for the process and start seeing results quicker.
CRM and Follow-Up
Rai emphasizes the importance of having a good Customer Relationship Management (CRM) system. Contrary to the advice of using simple spreadsheets, Rai suggests investing in a proper CRM early on to manage leads effectively and ensure no opportunities slip through the cracks.
Expanding Into Turnkey Solutions
After mastering wholesaling, Rai expanded his business to offer turnkey properties. These properties are fully renovated, managed, and ready to rent, mainly appealing to out-of-state investors seeking consistent cash flow.
Criteria for Turnkey Deals
Rai follows a stringent set of criteria for turnkey deals to ensure profitability and efficiency:
- Moderate Repairs: Properties needing less than $25,000 in repairs are preferred to avoid extensive renovation risks.
- Cash Flow Potential: The property must follow the 2% rule. For example, a property worth $100,000 should generate $2,000 per month in rent.
- Geographic Strategy: Rai focuses on untapped markets such as Flint, Saginaw, and Jackson, Mississippi, which offer significant potential despite their reputations.
International Investors and Building Trust
Attracting International Buyers
Rai has seen success with international clients, particularly from countries like Colombia, Venezuela, and Peru, where investors look for safe economies to park their funds. By offering net operating incomes (NOI) of over 10%, Rai appeals to these investors seeking stable returns.
Navigating International Legalities
Working with attorneys, Rai helps international clients establish U.S.-based LLCs, handle tax considerations, and secure American bank accounts, simplifying the investment process.
Conclusion: Persistence Pays Off
Rai Hamida's journey in real estate investing is a testament to the power of persistence and strategic thinking. By leveraging the law of probability, utilizing advanced tools, and maintaining a focus on following up on leads, Rai turned initial failures into a thriving business. For aspiring investors, Rai's story offers valuable lessons in perseverance, strategic planning, and the importance of consistent effort.
Embark on your real estate journey with the understanding that success is a numbers game. Keep taking shots, and eventually, you'll make the basket.
