Quick background on me: I have been marketing to a custom driving for dollars list for the last 12 months and have only bought and sold 1 property. My goal here is to wholesale and fix and flip. I have gotten great response rates from the marketing and set appointments with every seller that was interested in what I proposed. I know most of you would tell me I should be pre qualifying leads before actually wasting my time to go to the property, but I wanted the experience of walking through houses, learning to build rapport and improve my sales skills. Plus, I have only been sending to around 1000-1500 homeowners every 3 months - nothing too crazy.
My offers have all been too low for these homeowners to accept. I think they were low because I am conservative on my ARV and my rehab estimates are higher because I believe I am truly estimating for ALL of the repairs/improvements correctly. It has been frustrating to constantly hear No when each of these sellers wanted to sell and had houses that needed a bunch of work! Why wouldn't accept an all cash AS-IS offer?!
I recently met with a bank that is ready to sell a house for an estate that I have been marketing to for the last year. The homeowners are now in an elderly care home and gave the bank my letters. The bank got an appraisal and of course, they are valuing the property at what it might be worth AFTER the house is fixed up. So, I kind of knew my offer at 70% of that wouldn't go over so well since the bank has a fiduciary responsibility to sell the property for the highest value. When I presented my offer at the bank, I gave them a second offer -- they can hire my company to get it ready to list on the MLS so that it sells quickly and for the highest price. I would clean out the junk in the pole shed, clean the interior, repaint a neutral color, replace carpet and other light rehab tasks. The bank loved that idea and we are going out to see the inside next week to create a scope of work.
Instead of just letting the lead go because they won't accept at 70%, I realized that I can still provide value and create a profit somehow. It was a huge realization for me.
I am thinking back to the 25 or so homeowners that I met with over the last 12 months and I bet every one of them would be happy if I proposed to help repair their house so they can get TOP dollar for it.
Questions for you guys on BP: How can I make this work? Most of the sellers I meet don't have the money or expertise to fix up their property. What if I paid for all of the renovations (putting a lien on the house) and then once the house sells, I would get paid back for the repairs + a profit on top. I am profiting by performing the repairs(contractor) and lending the money to do it.
This would not geared towards motivated seller, but just sellers with houses that need work.
How can I create a model around this idea? I feel like I could create customers out of all of the sellers that do not want to sell at a discount. Any thoughts would be appreciated!! Thank you.
I've been looking for ways to monetize similar leads.
Have you pursued this at all? Would love to hear an update.