5 Common Reasons Wholesalers Don’t Get the Deal (As Explained by Sellers!)

5 Common Reasons Wholesalers Don’t Get the Deal (As Explained by Sellers!)

3 min read
Marcus Maloney

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. Marcus has been named the “Equity King” for his impressive ability to find real estate opportunities with massive amounts of equity.

Experience
Marcus, a high school dropout, went from G.E.D. to M.B.A. Although his education has a major impact on his investment philosophy, the real impact came from his upbringing.

Marcus thrives on completing successful transactions. As a young kid, his parents and grandparents faced many challenges; as a result, it made him think of ways he could help. His mother and grandmother were avid investors—not in the market but in people. Marcus was a recipient of those investments. And his early years were hard work growing up on a farm.

Marcus was a strategist at an early age. To relieve the burden of his family buying him clothes when it was time to return to school, he decided to make a small investment that paid big dividends. Marcus decided to purchase a small piglet at the beginning of summer, feed it until it became fat, and then sell it to a local farmers’ auction before the school year started. This was one of his first transactions and the beginning of his adventure of finding equity in every opportunity.

Marcus’ hard work continues today: He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who wholesales virtually in multiple states while building his investment portfolio. Although wholesaling provides great money, he saw the opportunity to buy some of the deals he found and convert them into cash flowing rentals.

Marcus currently holds seven rentals, two of which are commercial units. He’s also done the unimaginable and purchased a school, which was converted to a daycare center. Again, he turns what is a marginal profit into a significant equity position. He leverages the equity by using the BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategy to increase his portfolio without any money out of pocket.

Marcus has been featured on numerous podcasts, such as the Louisville Gal Podcast, the Best Real Estate Investing Advice Ever podcast, FlippingJunkie, and many others. He’s currently a featured blogger for BiggerPockets, the largest community of real estate investors in the world.

Along with completing transactions and working to build his portfolio, he provides mentorship to aspiring investors. This is done through one-on-one interactions and through his successful YouTube channel and blog.

Marcus does utilize his M.B.A. for more than real estate. As a consultant for a successful non-profit institution south of Chicago, he uses his expertise in the development of human capital. His philanthropic efforts help existing stakeholders develop in their capacity to serve those in need of assistance.

Education
Marcus completed his M.B.A. in 2011 from Olivet Nazarene University.

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If you have been wholesaling real estate for a good length of time, you will run into sellers who will occasionally accept a lower offer to get a deal done. Mind-boggling, right?

Absolutely NOT!

After speaking with a few sellers who did not close deals with me, I would follow up with them just to take note on their transaction to better evaluate my process and to cultivate my skills. In doing so, I noticed that money some of the time is not the determining factor. Of course, as wholesalers, we understand that money is not always the motivating factor or they would sell their property traditionally. However, there are other laws at work that can sway a seller’s decision.

In speaking with a few of these sellers, they pointed out 5 things in our general conversation that swayed their decision to accept a lower offer than mine.

Here are 5 factors that made me miss out on deals, and I would like to share them with you so you can avoid these mistakes.

5 Common Reasons Wholesalers Don’t Get the Deal

1. Perceived Bad Motives

One of the sellers felt that my motives were wrong; I asked that she please elaborate because this is normally not how I come across, and I would hate to give off that impression. She stated that during negotiations, I was not patient enough with her, and I was more focused on getting her under contract.

Related: 3 Examples That Prove Why Wholesalers Should ALWAYS Know Their Sub-Markets

After the discussion, I totally remembered the day, and it was a rough one, and I may have projected the wrong attitude, which gave her a negative perception of my intentions. I was in a rush because I double booked appointments, and at the time, I did not focus on the customer at hand. This was a wonderful lesson learned: Give every seller your undivided attention, especially during negotiations.

2. A Lack of Exit Strategies

Maximizing every opportunity means you have to have numerous strategies; there cannot be a one size fits all approach when working with sellers. At the time wholesaling was my one trick pony, so every seller needed to fit within the golden rule of 70% ARV. Well, not everyone is that motivated to lose 30% marketshare, no matter the situation they may face.

wholesaling-deals

I now have multiple strategies that I use to get a deal done. In the beginning it was difficult to transition, but in order for me to become more of a player, I needed to have more than one iron in the fire. I lost deals because other wholesalers were able to market deals that were thinner because they had buy and hold investors on the buyer’s list and not just flippers, or they were able to do creative financing, or they just listed the property traditionally. I am continually working to expand my product offerings to aide my sellers.

3. Bad Timing

There’s not too much to say about this, other than “right time, right place” will usually get you the deal. I used to beat myself up about this, but I understand now that no one will be able to capture every deal. However, continuous marketing will keep you in the mind’s eye of the seller who is on the fence. Be prompt in returning phone calls and keep the marketing machine going.

4. Ineffective Communication

This also ties in with #3. You may miss a deal due to timing, but please never miss a deal due to ineffective communication. One of the sellers stated that I spoke in real estate jargon, and it was hard for her to follow me in our discussion. Shame on me, right?

Please learn that you need to communicate on the lever the receiver is on. Tone, pace, and voice projection are important; however, you still want to guide the seller along the conversation without losing them.

5. A Failure to Follow Up

Everyone know that you must follow up with sellers continuously, unless they hang up on you, the property is sold (closed escrow) or they state they are not interested and please do not contact them again. If their response is neither of these mentioned above, guess what? You need to call them.

wholesale-communication

Related: 3 Tips for Wholesalers From an End Buyer’s Perspective

One of my biggest mistakes was missing out on a deal because the property was listed at the time (pre-license) and under contract. You will still need to follow up on these deals. In the example of mine, the property fell out of escrow and another investor was continuously watching the property to see if it would close — and that is exactly what happened. There was no closing, and he/she got the wholesale deal. Be willing to accept “NO” until you receive “YES.”

I hope these 5 factors help you when talking and meeting sellers along your path to becoming a real estate wholesaling machine. If you have any horror stories on missed opportunities you don’t mind sharing, we would leave to hear from you.

Investors: What has kept you from landing deals?

Be sure to let me know with a comment!