How To Advertise a New Product For Sellers

Question

I would like some agent's opinions on how to market this product.  We are trying to explode this product in our market and have done a little over 10 of these so far.  Most of the time I pitch this at the listing presentation, it's a no-brainer for the seller and they love it, just looking for more.

Currently we are sending mailers to absentee owners, social media marketing and homes around our recent projects.

The product - We offer a product through an affiliate business for our sellers that would normally be the target of many wholesalers.  We are looking for homes that need work to sell and covering all costs of renovation and managing the project start to finish as long as the property qualifies (mostly any project under $40k).  We make the seller a lot more money on the backend than selling to a "cash buyer".  We split added equity at closing with the seller for the project manager fee.

Mark Williams · Answer

I've had an interesting experience related to your referenced product. About five years ago, my wife came up with a similar idea, but I had some reservations at the time. However, she's quite creative financially and often thinks outside the conventional box. Sometimes, the best ideas take time to mature.

Eric Jubeck · Answer

Hey Chris,

Is the product something along the lines of a Curbio or similar offering? Where you're funding the renovation costs so there is no upfront expenses to the seller, so that you can list/sell for more?

That's becoming more popular across the board and some brokerages are starting to jump in as well...

I'm just curious how you're doing the equity split...are you just setting a number with them now on the current market value as-is that they are guaranteed to receive...then anything above and beyond that figure just gets split like a jv?

That's the part I'm trying to wrap my ahead around for the verbiage and how to effectively market that aspect, above and beyond the traditional "We Buy Houses" "We Pay Cash" etc...

Christopher Jason Lloyd · Answer

I love this!!!! We hadn't even thought of this... Thank you so much!!!

Christopher Jason Lloyd · Answer

Exactly.  It is very similar to that model - we establish an "as-is" price with the seller.  Once we do the reno, we take sales price and subtract out what we put into the property and split the "equity gain" 50/50.

Example:

As-is: $130,000

Rehab costs $40,000

ARV: $225,000

the rehab costs are recouped at closing and the rehab built an additional $55,000.  We split this with the owner 50/50.

Owner makes $27,500 more, brokerage earns almost double in commissions, we provide good inventory into the market and the flipper makes $27,500 with no holding or closing costs.  Everyone won on this one.