Wanted to know what do I say to the seller when I call them? Should I look up comps in the area before I approach the sellers? I've read many of the fsbo posts, but I haven't found a post that solves my problem. I want to get a grasp on wholesaling, is finding fsbo's a good way to find deals until I can build up cash for direct mailing and buying bandit signs. Need some feedback, so I can move forward with taking action. Thanks for your help.
What sellers like to hear you have cash and ready to close.
@Lonnie Zinnamon Your goal as a wholesaler is to find motivated sellers. Other than calling and gathering the basic information about the property, you need to determine their motivation to sell. As a wholesaler, you are not in the business of buy retail, so finding a motivated seller is important as they are more likely to sell lower and quicker. 3 questions that I like to always ask are;
What do you want to have happen?
Why are you looking to sell?
If we can come to an agreement, how soon can you sell the property?
I build some rapport and weave these questions into the conversation, but I use this to help gauge the seller's motivation. If I feel they are motivated, I will schedule a meeting to view the property.
I would suggest to browse around the forums and blogs on Bigger Pockets as there is a wealth of information that will help you build a solid foundation for wholesaling. Also, I highly recommend listening to podcast to help learn wholesaling. A few of my favorites specifically for wholesaling are Sean Terry, Flip to Freedom, and Matt Theriualt, Epic Pro Real Estate.
Best of luck and please feel free to reach out if you have any questions.
@Lonnie Zinnamon In addition to what @George Makakaufaki said, you need to learn about their financial situation with the house. A person can be very highly motivated, but also have a house that's worth 100,000 that has 120,000 owed against it. That's probably not a deal, unless you want to deal with short-sales. Even then, that's probably not a deal unless they are behind on their payments.
Try asking open-ended questions, and then just listen. "Tell me about your situation". "Oh, why is that?" "Tell me about the house?"
Also, know that the vast majority of leads are not deals.
Good advice above. You will be making lots of offers and hearing lots of "no" so get used to it. Dont forget to follow up.
Thank you all for the advice and timely response. Any help that I can get is appreciated.
I jave gotten plenty of no's before from unmotivated sellers but it did not completely dissuade me from trying. The key is finding a way you can appeal to the seller. Maybe a quick cash close or an "as is" purchase.
I'm curious about the same thing, what to say to fsbo or yellow letter responses. They want to hear that we have cash and can purchase immediately, but as a wholesaler, I don't have the cash to purchase immediately. The goal is to find the cash as soon as possible, so do I tell them I have the cash or explain that I will find the cash from another investor? What happens if I can't find the cash and the deal falls through? I look like an idiot and they keep a deposit?
I would call and ask them the series of questions to determine that they are motivated to discount their property.
If they were and their discount was low enough I would contract it and if I didn't have the funds I would go get the funds.
I would not be contracting to buy without the ability to buy. That seems wrong
The reality is that the sellers who discount do so because we can solve their problem. Understand that the ability to close on time is of paramount importance.
For these situations is why I would line my money resources up in advance. Besides it makes negotiation easier.
If you need the questions to ask let me know and I'll post them
Hi @Michael Q.
It certainly makes sense not to contract to buy without the ability to buy. I guess the conversation just needs to be handled differently when trying to wholesale or lease option. Now I just need to figure out how to have this kind of conversation.
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