"Can we close sooner?" asks my seller while I look for buyers...

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"Can we close sooner?" asks my seller while I look for buyers...

Chris Gould
Real Estate Investor · Indianapolis, IN · Member since 2016 · 26 posts · 0 votes

I have a house under contract in Toledo, Ohio that I'm looking to wholesale. Just received the signed contract back and I've started marketing the house to investors in the area. The homeowner then asks me when we can close by even though September 30th was listed on the contract. I said mid-September and she gets mad saying she thought we would be closing sooner than that and that she had "verbal cash offers" from other investors. 

How should I handle this situation? And in general, when wholesaling, what is the best reasoning to give for a 2 month closing window? 

I want to be honest with these people and set realistic expectations for the process. 

Thanks BP. 

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Ryan Pyle
Multifamily Investor · Toledo, OH · Member since 2008 · 296 posts · 308 votes
10y

Tell her the real answer. If you can't, then you should probably look back over your marketing and ask yourself why she has the expectations that she does. Whenever I wholesale, I tell the sellers up front that I'm most likely going to be the lowest offer, that they can get a better deal by calling a real estate agent, but I'm your guy if you want quick cash (I buy the property with cash and then resell). I also tell them that I'm most likely going to just sell it to another investor. They either thank me for my honesty and tell me that they need a higher price (in which case the deal never would have worked anyway), or they say, "I don't care, I just want to get rid of it," in which case I know I just struck gold.

My point is be honest. You will eventually get caught in a lie/deception, and it probably won't end well.

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  • Ryan Pyle
    Multifamily Investor · Toledo, OH · Member since 2008 · 296 posts · 308 votes
    10y

    Tell her the real answer. If you can't, then you should probably look back over your marketing and ask yourself why she has the expectations that she does. Whenever I wholesale, I tell the sellers up front that I'm most likely going to be the lowest offer, that they can get a better deal by calling a real estate agent, but I'm your guy if you want quick cash (I buy the property with cash and then resell). I also tell them that I'm most likely going to just sell it to another investor. They either thank me for my honesty and tell me that they need a higher price (in which case the deal never would have worked anyway), or they say, "I don't care, I just want to get rid of it," in which case I know I just struck gold.

    My point is be honest. You will eventually get caught in a lie/deception, and it probably won't end well.

    9Reply
  • Tony Gunter
    Investor · Canton, GA · Member since 2014 · 728 posts · 500 votes
    10y
    Time for you to buy it?
    0Reply
  • Keith Goodwine
    Nashville, TN · Member since 2016 · 82 posts · 137 votes
    10y

    Congrats!

    Ask her if she'd like to forward you the contact information of the investors, or if she could give the investors your information.  There's no reason why they can't or shouldn't contact you, especially if they are ready to pay cash.  If they can't make a deal, it's likely the other "investors" are wholesalers as well, in which case, you beat them to the punch.

    What are your buyers saying about this house?  Too high of a price?  Too many repairs?

    Are you marketing the property on Craigslist and Facebook?

    0Reply
  • Mark Mousseau
    Lender · Boca Raton, FL · Member since 2015 · 14 posts · 4 votes
    10y

    Chris, I am actively buying properties in Toledo.  Not sure what the BP rules are on posting addresses in this forum?  I know there is a Marketplace too, not sure if you posted the property there?  Or you can send me a PM with the address and price.  Thanks

    1Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    10y

    So @Chris Gould maybe this would be a good time to let the owner if you're going to actually buy it, if you can't wholesale it.  The seller definitely seems like they are counting on this sale, making life plans to move, and you should let her know now if that may not happen.  I'm not talking about any legal "outs" you may have....this is one of the major problems with wholesalers who have no intention of closing on their own, but make the sellers think their home is actually sold.

    5Reply
  • Keith Goodwine
    Nashville, TN · Member since 2016 · 82 posts · 137 votes
    10y

    @Chris Gould  You don't have to chuck this lead yet, especially since it's under contract.  The hard part is over.  Take massive action!  Wholesalers buy at a discount to close quickly with cash buyers. If you aren't closing quickly, and you don't have any interested cash buyers, then you aren't providing the service of a wholesaler.  

    Help us help you - if you've talked to any buyers so far, why have they turned down buying this property? Did you buy too high compared to ARV? Are there too many repairs needed? Does it have train tracks, an airport, and a nuclear waste facility in the back yard?

    Also try these marketing strategies:

    • Have you called all of your cash buyers to see if anyone is interested?  If not, call AND email them all now!  Even the ones that you know won't be interested may find your deal appealing if the price is right.
    • Is the property in the FSBO section on Craigslist? If not, post it now! (Here's the link - Toledo FSBO Craigslist )
    • Is the property in the Toledo Real Estate Investors Asssociation Facebook group?  If not, post it now!  (Here's the link - Toledo REIA )
    • Do you have a FSBO sign in the yard? If not, buy one for the seller and ask her to put it out front now!
    1Reply
  • Chris Gould
    OP
    Real Estate Investor · Indianapolis, IN · Member since 2016 · 26 posts · 0 votes
    10y

    Thanks Keith this is great information. Being that I just started marketing the property, I have not received any feedback from buyers, although several people have been interested. I posted in the areas you recommended. The house's ARV is $34,000 and I'm selling the contract for $13,000. I have it under contract for $11,000.

    It needs some work. The post in the marketplace and be viewed here:https://www.biggerpockets.com/forums/517/topics/34...I appreciate feedback. 

    Also, I could buy this house but I'd prefer not too. I'd need to get a lender for the other $6k (I have $5k to put in currently). 

    Thank you,

    Chris

    0Reply
  • Brandon Battle
    Real Estate Agent · Buena Park, CA · Member since 2016 · 743 posts · 424 votes
    10y
    This is exactly why actual professional wholesalers have like long lists of Cash buyers who can close fast.If it takes you more than 3 days to assign a house that cheap,you're doing something wrong or the property isn't worth the effort.An ARV of only $34,000 isn't worth getting out of bed for to a Californian like me but,some local guy looking for a buy and hold repair job property mike want it.There are several turnkey operations in Toledo including Ohio Cashflow who will buy it from you fast if it meets their criteria.$2,000 may be too much to ask for if the repairs cost too much because the ARV is so low.The turnkey companies might give you $500.00 or more for it if the repairs aren't going to cost them more that $15,000.
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  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    10y
    Originally posted by @Brandon Battle:

    This is exactly why actual professional wholesalers have like long lists of Cash buyers who can close fast.If it takes you more than 3 days to assign a house that cheap,you're doing something wrong or the property isn't worth the effort.An ARV of only $34,000 isn't worth getting out of bed for to a Californian like me but,some local guy looking for a buy and hold repair job property mike want it.There are several turnkey operations in Toledo including Ohio Cashflow who will buy it from you fast if it meets their criteria.$2,000 may be too much to ask for if the repairs cost too much because the ARV is so low.The turnkey companies might give you $500.00 or more for it if the repairs aren't going to cost them more that $15,000.

    Very true Brandon,

    Not many folks can find better deals than us here tho.

    It sucks as I wish the wholesalers in Toledo where much better so we can increase our inventory.

    It would have to be a great deal and our business model is very unique so we are even pickier with price.

    Thanks and much success

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  • Chris ClothierBusiness Member
    Rental Property Investor · memphis, TN · Member since 2009 · 2k+ posts · 3k+ votes
    10y
    Originally posted by @Ryan Pyle:

    Tell her the real answer. If you can't, then you should probably look back over your marketing and ask yourself why she has the expectations that she does. Whenever I wholesale, I tell the sellers up front that I'm most likely going to be the lowest offer, that they can get a better deal by calling a real estate agent, but I'm your guy if you want quick cash (I buy the property with cash and then resell). I also tell them that I'm most likely going to just sell it to another investor. They either thank me for my honesty and tell me that they need a higher price (in which case the deal never would have worked anyway), or they say, "I don't care, I just want to get rid of it," in which case I know I just struck gold.

    My point is be honest. You will eventually get caught in a lie/deception, and it probably won't end well.

     Great reply, Ryan.  

    Properly setting expectations, starting with your marketing, will keep anyone marketing for houses to buy out of trouble and out of these types of situations.  If you say, as most do, "We Close Quick, All Cash Offer, Any Price, Any Condition" but in actuality you cannot do those things, then you are setting the wrong expectations before the phone ever rings.

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  • Chris Gould
    OP
    Real Estate Investor · Indianapolis, IN · Member since 2016 · 26 posts · 0 votes
    10y

    you guys are right. I need to revamp my marketing and be more clear with messaging so at to not lead homeowners astray. 

    I will say that lots of the information I've learned online takes a stance of don't ask don't tell regarding wholesaling in general which does feel like an integrity based way of doing business.

    0Reply
  • Dawn BrenengenBusiness Member
    Moderator
    Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
    10y

    @Brandon McCraney 

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