I have deals, no buyers, just tire kickers! Am I alone?

Question

Good Morning -

I am ranting this morning about my so-called cash buyers list. I meet these wonderful people at investor meetings, or they call me from my Craigslist ads. I find properties they want and negotiate the price just right, then they disappear!!!!

I used to think I didn't price my deals right but my mentor says my deals are priced just right so what exactly am I doing wrong?

I remember my FIRST deal. I got a house worth 90k for 25k, needing no repairs. It took nearly a month to find a buyer, and at the time, I advertised the home at a mere 36k!!! The home was in a desirable neighborhood (one where most investors can't find property unless they are referred), brick, and very well kept.

It's either my market or my marketing...I am guessing. Or maybe this is how a new investor is hazed into the business. Insight?

Aaron Mazzrillo · Answer

If you've got deals and no buyers... you don't have deals. I got a contract accepted yesterday. I sent an email out at 8:45PM to 2 people. By 8:47PM the house was sold for a $13,000 wholesale fee. He didn't have time to go see the house. Based on numbers and my reputation, he knew it was a deal that worked for him.

My suggestion, make sure your numbers are right. If they are, with every deal you close, your reputation gets better and better. Eventually, you can send an email and make $13,000 in 2 minutes.

Account Closed · Answer

In active markets, a wholesale fee at any price is not a deal breaker for experienced buyers.  I've sold at 100% markup many times.  My profit is irrelevant to anyone who wants it at the price I'm selling it for.  And I never ever called my profit a "fee". Where a "fee" becomes a problem is with inexperienced investor buyers in the market or buyers who don't have cash. Newbie rehabbers and landlords trying to line up financing are often already strapped for the down.  They often don't know that conventional lenders have issues with the assignments or double closes and they often don't have cash to pay the wholesaler.

If the OP advertises a property at $36K, she either has buyers at that price or she doesn't, regardless of whether she is buying it for $10K or $20K or $30K.

Jon A. · Answer

You have either no deals or no buyers.  Have these deals eventually been sold by others to others?  Are your buyers really ever buying anything?

Account Closed · Answer

There's no hazing going on IMO.  Having a deal that isn't exposed properly to the market won't bring you offers. I think buyers lists are overrated.  You're probably getting a lot of interest from newbies and wannabe rehabbers. Once you know a few experienced buyers that perform, if they don't want it, they will often know someone who does.  I also think craigslist is overrated as a selling tool for real estate.

The MLS is still the best way to expose the property to the greatest pool of buyers. If I had a contract for $25K on a $90K house, I would close on it!  Lenders where I am would be all over that and would lend 100%.  Then I'd clean it up and list it on the MLS.  If you've got a rent ready house needing no repairs, that means you have a retail ready house.  Owner occupant buyers getting a home loan pay the most.  OO buyers getting a loan use buyer's agents.  Buyers agents use the MLS.  But your numbers have to be right, because the lender's appraisal makes or breaks a retail purchase. So you can't throw around a $90K value if there aren't lots of solid comps to back it up.

Account Closed · Answer

I had two main buyers for several years who bought pretty much everything from me until I figured out I was underselling. The ability and capital to close on properties changed everything.

Mike S. · Answer

@K. Michelle Hill

Most successful wholesalers I have met typically have no more than a few buyers that buy everything from them.  Figure out the big buyers at the foreclosure auctions and the high volume flippers in your area.  These people are probably not the ones responding to your craigslist ads.  You need to sell your deal to the people working on the thinnest margins.  Listen to Tim Gordon  podcast it is full of great info on wholesaling.

Josh Sexton · Answer

Does your marketing right now consist solely of Craigslist and REI meetings?  You want to have as much market penetration as possible and that means you need to be putting time and money into many different marketing outlets.

@Gary Mariencheck mentioned Postlets which is a free product I've used before with some success.  It definitely helps more your Craigslist ads more appealing.

Posting on the MLS is hugely important as well.  Do you have a website that you drive traffic to in the hopes of promoting your services and ultimately moving property?  What about social media?  Do you have a presence?  What content are you putting out that would be useful to investors and potential clients?  Most importantly, try not to be short-sighted with your marketing efforts.  Many companies take months or years to build a following and develop a buyer pipeline.

Account Closed · Answer

Wow! Maybe I'll be blessed with that kind of buyer.

Aaron Mazzrillo · Answer

If you have to use postlets to sell your 'deals,' not to repeat myself, but you don't have deals. Find the players in the market and only deal with them. Your life will be much more enjoyable and your bank account much healthier.

I have deals, no buyers, just tire kickers! Am I alone?

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