Creating Value For Both Parties.
Howdy All,
I wanted to take some time to go over a few wholesale tips that have proven to be extremely useful in the markets where I operate.
- Getting the home for less than what it's worth.
For those looking to connect with sellers in military markets, you always have to keep in mind that the cost of homes is substantially lower than that of the larger metroplex's that neighbor each market. This will bring many obstacles to you for one big reason, homes just aren't worth that much. Approaching a seller with a homes that is worth $64,000 is already tough enough, but for investors, it makes it a whole lot harder. You are going to have to offer a much smaller number than what the seller is expecting in order to get your buyers on the hook. Here are a few tips to get to a price that works for everyone.
- Help the seller fix the home:
I am not talking about swinging a hammer, I mean connect with them with a rehab company that will do partial work to justify a higher price. I know it sounds crazy, but I always connect with seller with Code Blue Solar. They will install solar panels on roofs, but they will have to fix the roof first at no extra cost to the seller, they can give loans up to $100,000 for green upgrades such as lighting, insulation, HVAC, and windows. These small fixes allow my sellers to walk away with more cash in their pockets and my buyers have new roofs and windows without spending any of their own money. Creating as much value for both parties will always lead to success.
- Breaking down the cost:
Believe it or not, some sellers don't really understand the cost associated with having to rip our asbestos from walls or fixing rotting wood. One of my most effective strategies is walking through the home with my contractor and having him explain the amount of work that goes into fixing homes that are in bad shape. At the end of our walk-through he creates a sample invoice and show it to the seller, it helps generate a frame of reference of the actual value of the home and they become more understanding and willing to negotiate the best offer for everyone.
- Creating a Package Deal:
Sometimes it's easier if you can build a package of 10 homes with the same price. This allows you to make your sellers feel as though they are in an exclusive group of home owners that have the best homes on the block. often times you can lead with a very simple and honest, "I would like to add your home to the package of carefully selected properties to be sold to cash buyers, there's nothing you would need to commit to even if someone made an offer to buy it." This gives them more freedom to consider your offer without any big strings attached and allows your buyers to select from a bigger pool of homes. Most seller are very surprised when you call them and tell them that there is an offer for their home, they will always want to negotiate and that's something you can help them with. Creating as much value for both parties will always lead to success.
I hope these tips were helpful and if you have any feedback on what has worked for you and is working for you, please leave your comment.