Can You Really Make Money Wholesaling in South Dakota?

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Episode Transcript

SPEAKER_00 (00:08):
Welcome back to wholesaling around the world,
the South Dakota edition.
Let's be honest, there's not awhole lot to report in regards
to virtually wholesaling in thestate of South Dakota.
And it's not shocking.
South Dakota comes in as the46th most populated state, with

(00:30):
just south of a million peopleliving in the state of 924,000
people.
But the one thing that SouthDakota does bring with us is a
pretty good story.
Back in 2020, when we startedour first 50 deals and 50 states
and 50 days challenge, we got aproperty under contract in South

(00:54):
Dakota.
That was one of the states thatwe were successful, right?
We got them in 49 differentstates, Utah being the one that
we didn't get a state in.
So we got the property underSouth Dakota.
Acquisitions was relativelyeasy, you know.
It wasn't difficult, butdispositions, right?
Now that's a whole differentstory.

(01:15):
And this is before we had thedispo softwares, right?
We didn't have investor lift andinvestor baits and all the
things that we have nowadaysthat have made virtually
dispoing a deal so much easier.
So what we did was scrapeFacebook groups, pulled cash
buyer list on batch leads andprop stream, skip, trace it,

(01:38):
cold calls, sent out mass textmessages, right?
We were really having to workfor dispoeing properties in
markets where we did not haveknown buyers.
And of course, we didn't have aknown buyer in South Dakota, so
we get to work.
Now, this property that we hadunder contract, it was a little
bit of a unique property.

(02:00):
It was a tired landlord, it wasa smaller home, but it was it
was discounted, but it wasalready fixed up.
So it was basically kind of usselling a potential turnkey
rental with a discount, right?
It had equity, and we weren'ttrying to get a big wholesale
fee.
I believe we were only going forlike five or six thousand

(02:22):
dollars, right?
We're just trying to move thedeal that we got under contract
inside of South Dakota.
So we start doing the masstexting, and I'll never forget
we get an inbound call from thetexting, and the the buyer is
one of the the largest buyers inSioux Falls.

(02:43):
He he calls us and he's like,Why are you selling why are you
trying to sell me my cousin'shouse?
And it was at that moment that Irealized wholesaling in South
Dakota is really hard, right?
This is one of those areas wherehey, everybody's gonna know

(03:05):
everybody, and it's not likemajor majority of out-of-state
investors are not going to belooking to purchase properties
in South Dakota, it's just notgonna be one of those locations,
especially considering the factthat the majority of the state,
there's nothing to it, there'sthere's not really a lot of

(03:28):
opportunity there.
Where you're gonna haveopportunities is Sioux Falls and
Rapid City, right?
Those would be the two majorcities, but by major, you know,
take that with a grain of salt.
But those would be the two areasthat you're probably going to
have the best opportunity towholesale in if you're wanting

(03:49):
to explore something like SouthDakota.
But over the course of the nextfive years, I have learned that
if you have a connection toSouth Dakota, it could be a
little baby honey hole for you.
And what I mean by that is thereare leads that are available in

(04:10):
South Dakota through propertyleads, leads or loan to lead,
specifically on the marketplacefor speed to lead.
And getting even more granularon that, you can go all the way
down to the coupon club, whichis the cheapest leads available.
You will see regularly, thereare normally two to five

(04:32):
available leads in South Dakotathat have very few purchases on
them, right?
It shows you how many ordershave been placed on that lead,
and normally it's zero and maybeone have purchased that lead
prior to you even seeing it.
So if you have a connection, ifyou have a known buyer, say in

(04:56):
Rapid City or Sioux Falls, thereis an opportunity for you to
come in because there is suchlittle competition in South
Dakota on the acquisition side.
If that seller is trulymotivated, there is an
opportunity where you're notgoing to have to combat like you

(05:16):
would in all of the othermarkets in the United States,
right?
Not I say all of the markets,but the majority of them, right?
It's not going to be like yougetting a lead in Texas or a
Michigan or Ohio, where there'sgoing to be multiple purchases
of that lead, as well as peopleco-calling and direct mail and

(05:38):
door knocking.
That just doesn't really happenin South Dakota.
So what I have seen is that thesellers, if they have some
motivated factor, they areprobably more highly motivated
than the majority of states.
But this positions is where thehard part is.
So in order for you tocapitalize on this opportunity,

(06:01):
you really need to have thatconnection there and have that
known buyer.
Now, do I think as a virtualwholesaler, you should be
targeting South Dakota or evenmining for buyers in this
location?
Probably not.
You know, now, if you alreadyhave traction in other markets

(06:21):
and you're just wanting toexpand and find a new
opportunity, could you take acouple of days to try to mine
for a buyer inside of SiouxFalls or Rapid City and see what
their buy box is and see ifthey're currently wanting to
purchase properties?
Do I recommend that?
No, I don't.
This would be one of the reallyrare opportunities that I would

(06:43):
say, hey, there's probably anopportunity for you to
capitalize on that.
If you can make that connection,understand, vet out that buyer
and know what they're lookingfor.
There could be an opportunityfor you to capitalize where
majority of wholesalers are justgoing to completely ignore not
only a city, but basically theentire state, right?

(07:05):
That it's just going to getignored.
Now, in my very little knowledgeof the South Dakota market,
because it's not like we've donea lot of deals, right?
We've done a handful of dealsthere.
You will have an opportunity forvacant land.
Uh, vacant land on terms isavailable to you.
So, from a real estate investingstandpoint, if you wanted to

(07:27):
take that down yourself, thatopportunity exists.
But wholesaling, this is one ofthe more difficult markets out
there.
I'm gonna rank this somewherebetween 45th to 50th.
Okay.
And just really because thereason why I can't pinpoint that
exact number is because there'squite a few that just kind of

(07:48):
mingle together, right?
There's not a huge differencebetween South Dakota and North
Dakota, right?
Now, regulation-wise, there areno regulations on wholesaling in
South Dakota, except based offof my research, it does look
like the state is pretty hard onbird dogging properties.

(08:10):
They do not want you, theyconsider that brokering without
your real estate license.
So wholesaling is legal.
You just have to make sure thatyou are very adamant about you
are assigning your equitableinterest, you're not selling the
property.
That's where you can get introuble.
But outside of that, there's noregulations on wholesaling

(08:32):
inside of South Dakota.
So there's still an opportunitythere, but this is always going
to be one of the lowest rankedstates out there.
And overall, I think themajority of virtual wholesalers
would do themselves quite a bigfavor if they just avoided South
Dakota, went to the othermarkets that are better suited,
higher volume, higher volume ofin buyers.

(08:55):
And this one fits right along inthe trends.
Low population, low opportunityfor wholesalers.
So, for those of you that arecurrently wholesaling, if there
are any of you out there thatare wholesaling in South Dakota,
let me know.
Do I know what I'm talkingabout?
Or are we missing something inSouth Dakota?
Let me know in the comments.

(09:15):
Regardless, show me some love,like today's video.
We'll see you guys tomorrow.