wholesaling
Is wholesaling on a decline
I would say it's quite the opposite now. Inventory is on the decline but wholesaling is at a alltime high. Just my observation though.
Wholesaling is never on the decline if you are doing it right. As long as you completely per-qualify your cash buyers and know very specifically what they want, you will always make money wholesaling. You need to be confident and honest with them, and when they walk you through every single detail of their ideal investment property and you get it, you need to walk them through how you work, how your deals will work, what you expect from them, and get them to commit in advance to buying their ideal investment property when you bring it to them. Now, every house you put under contract is sold in advance.
Wholesale will never exactly be on decline. There will always be a different strategy of wholesaling you can do depending on the movement. Also, there will always be people in situations. Life happens. It is your job to be in the right position to take that opportunity when it comes around. It just might seem like its on decline because most of the newbies that hit the ground running in January, have since burnt out and left race.
@Chris Piper Hey Chris I was just wondering if you could give me some advice, I know a lot of people say if you have an amazing deal you wont have a problem finding qualified cash buyers. I am just starting out and I keep getting contradicting information on weather you should find deals first or build a cash buyers list?
@Chad Bernstein I know people always say when you find a great deal, the buyers will come out of the woodwork and find you. I have not found that to be true at all in my experience. You can't really know what a good deal is if you don't have a cash buyer's list and if you don't know exactly what they want to buy.
If you find a 3 bed 2 bath in the ghetto for $50,000, and it has an ARV of $150,000, is it a good deal if you have no cash buyers list or if you do, but have no idea what they want? The answer is no. It's not a good deal for you. It might be a good deal on paper, or for wholesalers who already have a cash buyer's list of people who are looking for properties in the ghetto. If you don't have buyers who want those types of properties, then it is not a good deal for you.
A good deal starts with knowing what you are looking for. Initially, you need to let the cash buyer's know that you are very good at what you do, and you will be creating deals for them based on what they tell you they are looking for as their perfect investment property. Let them know that you don't waste a minute of your time, that your time is either spent working on creating deals for cash buyers, or with your family. You will be bringing them the perfect deal wrapped up with a bow on top, and all they have to do is pull the trigger.
You can only know what a good deal is by knowing exactly what your cash buyers are looking for, by talking to them in the beginning, and finding out exactly what they want. I do mean everything: the number of beds and baths, what the exterior looks like, what side of the house the driveway is on, garage, what the interior looks like, what price they are willing to pay, etc. You need to become a master at reverse wholesaling. Once they tell you what their perfect investment property looks like in vivid detail, you need to let them how you operate and what you expect from them. Always talk to your cash buyers with confidence and be straight forward. Even if you've never done a single deal in your life, "act as if." Act as if you've been wholesaling for 10 years, act as if you are the best in your area at what you do, etc.
When explaining how you operate and what you expect from them, let them know that you will be spending your time, money, and resources to create deals for them based on their description of their perfect investment property. So, let them know that when you call, that you will be bringing them exactly what they want and at the price they want, so they need to answer when you call. At the very least, they need to let you know if they are busy and that they will be getting back to you soon via text, email, etc.
Let them know that when you bring their perfect deal to them, that you expect them to put the property under contract immediately, and they need to put $2,500 in escrow right away as well. They will have 7 days to inspect the property, and if they don't like it, they can back out within the 7 days and get their money back. No harm no foul. But, let them know that after the 7 day inspection, that you expect them to close. If they don't close, then inform them that they will be looking for their own deals from then on. It seems harsh, but they have to understand that you are the best at what you do, and that they are lucky to be working with you. Obviously, you want to convey that without saying it, and without being a jerk about it.
The key is 100% to build a cash buyer's list first. Imagine being able to put a house under contract that you know is already sold. That is like getting paid to shop. Pretty powerful stuff.
P.S.- Don't let your cash buyers blow you off by saying "Oh just send me anything you get" or "I want 3 bedrooms 2 baths." That is too vague, and that will cause you to go after deals like that, and end up getting stuck with them when those same cash buyers don't buy when you come to them anything or with a 3 bedroom 2 bath. Make sure you make them imagine and walk you through their perfect investment property that they would buy every day of the year if they could.
@Chris Piper WOW, thank you so much for taking time out of your day to walk me through that. That does make a lot of sense, I have spoken to a few cash buyers who said exactly what you said, "just bring me the deals and I will let you know" OK so let the networking begin! Again thanks a lot Chris truly appreciate it.
@Chad Bernstein No problem. Cash buyers who say that are just wasting your time. When you put them on the spot, let them know exactly how you will help them, and what you expect in return from them and get them to commit in advance, you are golden from that point on.
Even if you get 5 cash buyers on board with you to start, you can make a great living from that, and keep building up your list. The average cash buyer buys 2.5 properties per year. So, if you are making a $10,000 wholesale fee per deal, and you have 5 cash buyers doing 2.5 deals per year each, that equals $125,000 a year. Not too shabby depending on what part of the country you live in.
Honestly though, once you deliver to cash buyers and continue to do so, they will want to increase the number of deals they do with you because you are bringing them gold. Any more questions, let me know. I'm here to help.
As a side note, I'm not sure how much money you have to put into your business, but targeting cash buyers is a big deal and will really fast track your business. I am using Kent Clothier's "Find Cash Buyer's Now" system. It's great and you can pull up cash buyer anywhere in the U.S. that you want to target. It is rather pricey, but aside from putting up bandit signs and craigslist ads in your town, it is a much faster way to build your list. You would need to pay for Kent's system, and then pay to direct mail the cash buyers. I think Ken't system is like $1,000, and they will put together and mail out your letters to cash buyers for around $1 each or so. Just a though for you. If you don't have that kind of money, I would look through the forums on here and search on youtube for techniques for building a cash buyer's list. Good luck!
@Chris Piper again Chris thank you so much for the valuable information. I will deffintly keep that system in mind. I am just starting out now, but will be implementing a system very soon for getting cash buyers and I will definklty look into it. Thanks again for the great info Chris!
I think your area makes a difference too... I live in Boston and wholesaled a property (at over 90% of retail) for 10k with no buyers list by posting on craigslist. I added about 30 people to my buyers list just from that one ad. Granted my area is extremely high demand and multis that hit the market usually go for over asking right away. I do also find that the buyer's I've talked to around here won't get specific about what they want, they just say bring them any deal and if the numbers work they will buy it.
Nick - I'm not sure if you wholesale in the Middlesex and Essex counties, but I can be specific on what I buy. :)
I'm a rehabber in the area and would also be interested in being on your buyers list.
I'll buy in a bigger area and am less discriminating than @Justin Silverio
:)
@Shaun Reilly is correct, I'll just buy the good deals. :)
Originally posted by Justin Silverio:
@Shaun Reilly is correct, I'll just buy the good deals. :)
Lets clarify.
I will buy crappier houses in crappier locations that have good numbers. :)
@Nick Luongo you can add me to your list as well. I am looking south of Boston in the area of Brockton, Abington, Hanover, Weymouth, Whitman, Hanson, etc. I like 1000 to 1500 sq ft homes 3 bed 1 bath but of course would consider some properties outside these specs if the numbers are good.
On the original posters question I would say it is safe to say Wholesaling is alive and well in Eastern MA. :)
@Steven Brown Whether you think Wholesaling is on the Decline or you think it isn't, you're right! (for you)
There is no shortage of Wholesale deals in Boston and the North Shore.
I attended a discussion recently on whether you should find the Money or the Deals first. The consensus was BOTH but I think it's more important to have a Buyer's List.
I looked at a Property last week and by the time I walked from that property to my Pickup I was able to call two Buyers who knew the Area and Market. If you can't, then that may be your next goal?
@Nick Luongo I like your Craig's List technique!
@Mike Hurney good points. @Paul Sorgy will do no problem.
Do you find there are any key differences between wholesaling in eastern MA vs. other parts of the country, if any? Most wholesaling articles I've read the investor was working in different areas.
Hey @Nick Luongo . You can add me to your buyers list as well. My partner @William Roberts handles most acquisitions but @Paul Sorgi is looking hard for a deal so hopefully you can hook him up with something in his market area.
In any market, in any economy, and as long as people live there :-) there will always be a high price and a low price. Meaning, make sure you buy (get under contract) at the low price and there will always be someone to take it off your hands… wholesale or retail.
