Hey everyone, let me throw this out to see if anyone has any suggestions:
I am a flipper and things are going okay, only the spreads are thinner than desired because all my deals come through the MLS. I've heard the podcasts and done some reading on direct marketing but it's not a good fit with me for two reasons:
1. I am a Navy Officer stationed in a small area where I would inevitably come across other Navy members. There's nothing illegal about that but it just wouldn't be proper based on my rank.
2. My realtor wife is opposed to me going directly to sellers and doing a deal without her or another realtor's involvement for three reasons:
a. She's concerned we may alienate her broker, who we are also good friends with.
b. She maintains it is a realtor's job to ensure sellers get as close to fair market value for their properties as possible, thus any direct marketing campaign on my part would conflict with her obligations as a realtor.
c. She believes involving a realtor ensures transactions goes as smoothly as possible, including all legal requirements, disclosures, etc.
I have yet to meet any wholesalers in my area and for all I know there are none (anyone want to start a wholesaling campaign in western Nevada?) so that option is out too.
Pinnacle Homes & Properties
@Account Closed Perhaps there are different rules for Realtors in Nevada. However, in Texas we have Seller's Agents & Buyer's Agents. If I, as the Buyer, have a contract with a Realtor to represent me as the Buyer's Agent, then it is their duty to ensure I get the best deal possible, not the seller.
I'm wondering if it would be possible for you to hire a virtual assistant to handle and screen your incoming leads from a marketing campaign. That would allow you to filter out those who your may have reasons not to want to deal with directly. In the meantime, even if you haven't encountered any wholesalers in your area, are there other investors? Most investors I know will wholesale the deals they get that they can't take down. Perhaps you can "partner" with another investor to act as a wholesaler for you on leads where you might have some sort of conflict. They could get a wholesale fee - a discounted one, since they aren't fronting the cost for the marketing - for securing the deal and then assign it over to you.
You would have to trust this individual, but it would create some distance for you from the seller.
Why not do direct marketing for your wife? Find her some listings - maybe she will share with you.
I find it weird that your wife should decide for people, whether selling direct or through a Realtor is a better option for them. Why not let the seller make the call? When they respond to direct marketing, let them know you can pay them cash quickly if that's what they are interested in, but if they have less urgency and would like to work through an awesome Realtor instead, well then pitch your wife!
I can't possibly imagine the argument against that.
With regards to running into other Navy members, you could simply politely decline. I doubt they are a large enough group to impact your direct marketing economics all that much.
@John D. Good points. I just had a prospect call me from my direct mail campaign that is interested in "a change of scenery" but her house is in great, market-ready condition. I don't want to come in and make an offer to her of 60% of market value because that would be a rip-off, so I'm referring her to a realtor so she can get top dollar for the house.
@Account Closed I wonder if your wife would be willing to list a hoarder-house that needs $50k in rehab to get it "market ready" on an "as-is" basis because the seller can't afford the fix-up? If not, how does she propose the seller get rid of the problem house they don't want to be in anymore? Or perhaps it was inherited by the kids and they don't want to mess with it? Can she guarantee a 2-week closing for someone that needs the cash immediately? Maybe these are scenarios she hasn't considered, because in a lot of cases that's where investors can fill the gap to provide a valuable service to homeowners in distress. I know that's where most, if not all, of my marketing goes.
Great feedback, folks, I appreciate you taking the time. One thing I did not mention is our flips have thus far been cosmetic rehabs--paint, carpet, appliances, light fixtures, landscaping, etc.--we have yet to add square footage, move walls, or put on a new roof. I'm not afraid to do those things, in fact the challenge is intriguing, but our flips have all been within our comfort zone and we probably could benefit from branching out a bit to properties besides just ones we could see ourselves living in. I realize now finding homes on the MLS is the "easy" button.
@Hattie Dizmond realtors in Nevada can represent the buyers, sellers, or both--similar to most other states, I'm sure. Your point is valid about buyers' agents but I was speaking in general terms. With her limited understanding of direct marketing (probably based on my poor explanation), my wife thinks it somehow denies sellers what they could otherwise get for their properties if properly represented. However, after reading @Jim Viens 's response I realize there is a segment of the market that either cannot or does not want to work with a realtor and having someone willing to help them solve their problem is a big benefit. That is probably how I should broach this going forward, particularly if I take @John D. 's advice and offer to refer certain sellers to my realtor if that is in their best interests (which would also keep our broker happy).
All good points and I hope your feedback is the push I need to branch out and continue building my business. Thanks again.
You and wifey can be a team and complement each other. If she has a lead and it involves a home that can't easily be sold conventionally, she can refer that to you, vice versa, if you run into a property that is best served by a listing agent to get maximum exposure, you can refer that to your wife (and her broker). It's a win-win.
If you don't want to buy from fellow Navy buddies, well, buy from the Marines hahaha.
Good one, Sam.
Update for anyone interested: I brought this up with the wife a couple weeks ago and got shot down again (who wears the pants around here anyway?!). Despite my best efforts to convince her otherwise she just can't imagine a scenario where it would not be in someone's best interests to be represented by a realtor. But as fate would have it, a day later "Heidi Buys Homes" bandit signs appeared all over town so I called the number and talked to a guy in a nearby town who is beginning a direct marketing campaign in this area. He added me to his list of buyers so with any luck I can get a deal wholesaled through him, although nothing has materialized yet. (Interestingly, the guy had never heard of BP, can you imagine?!)
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