How do cash buyers like wholesale deals presented to them? Do they want as much info as possible, or is it unnecessary because they will do their own due diligence anyway?
I can count on one hand the number of wholesalers I trust, and I lost 4 of those fingers in a chain saw accident.. I don't trust wholesalers, and I buy a lot of properties from them. 99% of the numbers they give are total horsepoop..
Send out a note with the basics: Address, # beds, # baths, sq footage, garage y/n, and size of garage. Maybe give what you think an ARV or rent rate is if you can justify it from somewhere credible, and then give your sources for those values. If there's something unique about the house, give that information.. Give at least 1 exterior shot, and try to give 3-5 interior pictures. If you're going to do a video, then don't use a camera from 1970.
All investors look at different criteria. All repair estimates are going to be different. I can probably get a roof done for 3k and another guy 4k, etc.
How you present the deal matters a lot less than actually having one. To know that you have a deal you need to have a solid ARV and a solid rehab estimate. So, you should provide your numbers. No need to wax poetic like many MLS listings do. You're not trying to tug at someone's heartstrings.
Jon Holdman, Flying Phoenix LLC
I'm really glad @Hasan Hamdan asked that question about how much information to give the buyer. Because i am about to market several properties to buyers. But I guess what is so disheartening is when I hear investors say that the hate wholesales. I want yo be a good wholesaler and get my buyers what they want to the best of my ability. But I think the value a good wholesaler puts on something is not going to be dead on to the value an investor is price a repair. I think both wholesaler and investor are going to try to appropriate cost as close as possible. I going to try to be as good at this as possible. Because investors need wholesales as much as wholesaler need investors.
Give your Buyers as much info as possible. At the end of the day they will do their own due dilligence and decide if the deal will work for them. A video tour helps also, saves time and helps weed out uninterested buyers.
i don't hate Wholesalers. Most of my deals come from wholesalers.
Your reputation is key though. Honesty is crucial. You are also going to need to follow up withe buyers. If someone views your property then keep on them until they give you a definite answer. Be prepared to negotiate too.
@Hasan Hamdan Give them everything that they will confirm in due diligence. That way they have the info to evaluate if it meets their needs. But as @Jon Holdman said, no need to go into long descriptions and in fact that is a waste of time. I like to have the comps that the ARV was based upon, and pictures clearly showing all rooms, with detail pictures of all necessary repairs so I can do a quick estimate without visiting the property.
Give enough detail so an investor can tell that you know a good deal when you see it. Without that, you are likely to be classified as just another wanabe trying to pawn off a retail property.
Hello @Hasan Hamdan
I currently purchase most of my deals from wholesalers. Remember cash investors have countless leads presented to them daily! Out of the 30+ wholesalers that send me deals I only buy from 2 because they bring me loads of information on each property. They show me (pictures, video, description, taxes) one wholesaler I deal with is a home inspector and provides me with a full property report as well. The wholesalers that just send me an address with a price rarely get the check as I don't have the time to drive around, look at deals just to be let down by lack of info up front.
Investors actually love great wholesalers! The problem is that EVERYONE is a wholesaler and very few want to put in the work to be a great one! You will also hear investors say they hate contractors for the same reason. If a wholesaler is going the extra mile by finding great off market deals and providing loads of information about the property they will get paid every time.
@Mike Alder I'm working very hard to be a good wholesaler and trying to learn all I can. I'll try to keep my mistakes to a minimum. Although I'm sure I may make some. I will learn from them.
@Hasan Hamdan The best (fastest, most profitable) deals I've wholesaled, I dealt with my buyer personally, not via an email blast to my entire buyer list. I send them a personal email and followed up with either a personal text or phone call to them (or both) letting the know I sent them a deal via email and to take a look at it. They know if they don't reply soon, I will move on to the next buyer I have on my list. Based on history, they know I lock up good deals so they need to take a look at it quicly. I know the kind of properties he/she needs. When I have one I know they'd like, I do as noted. I usually included the basic details like address, #beds, #baths, sqft, age and occupancy, ARV, estimated repairs and my wholesale price. I include a link to a picasa link where I loaded 20-30 pics of the property I took. I also include a few comparable solds justifying my ARV. Occasionally, the first buyer I contact passes for some reason.. So I go to the next buyer and do likewise. If for some reason none of my *key* buyers (those who have performed in the past and bought deals from me) take the deal then I start looking for a buyer via email blast to my entire list. I also start calling agents who have sold to cash buyers nearby my property to see if their cash buyer might be interested. By these later methods, I have found new *key* buyers who buy different kind of properties and in different areas. For me, that's generally how it goes down. Key is to know what your buyers need and to build and keep relationships with those who perform and treat them well.
Thanks for the input everyone! I am a buyer myself, and I usually only trust my own numbers as some wholesalers (unintentionally) can make a mistake in theirs, which could have made them think what they had was a deal in the first place when it might not be. But the reason I asked other buyers is because every once in a while we choose to wholesale a deal if we have too much on our plate, and I was curious to know what others are interested in seeing.
@Account Closed one more question, as I reread this post. How do you handle wholesaler fee. Is it included in the quote or separate ARV, minus repairs and then wholesale fee?
@Jamane Y. M wholesale fee is built into the calculation of ARV x investor discount (70%, 75% depends on market your in) less repairs less wholesale fee. The result of the calc is my MAO, max allowable offer. So I should have it under contract with the seller for MAO or hopefully less. When I present my property to a buyer, I tell them my ARV based on my comps, give them the comps, provide your repair estimate, present them your Wholesale Price (purchase contract price + your wholesale fee), provide the property details and pics. If the buyer wants the property, you assign it to them. The difference between your purchase contract price and your wholesale price is the "fee" you make. It comes to you at closing..
@Account Closed thank you for getting back so quickly.
We wholesale and rehab. And like @Account Closed mentioned we don't do an email blast to a ton of Investors (dangerous imo - you never know what kind of imposter is on your list) but instead call up an investor rehabber on our very short list of Investors who have purchased us from in the past. They too know that once we call them they need to get back to us fast or it's gone.
The one thing I did not see included in anyone's package to rehabbers is a title report which we almost always do before presenting a deal to a rehabber. Having title blow up in your face on your way to a closing table with a rehabber is just as bad as giving them a BS ARV.
Wholesalers should have a good relationship with their title co. where they can get title reports done quickly and cheaply. And if you're just starting out and really don't have the up front $$$ to order title on every property you put under contract, at least learn how to do your own title reports. They aren't difficult. I would start by ordering a professional one and then learn to find all of the info included in that professional report (Bankruptcy reports, lien searches, municipals charges and liens, deeds etc.).
Ibrahim Hughes, STEP Buys Houses LLC | http://www.StepBuysHouses.org
@Ibrahim Hughes Thanks good info. I learn so much from you all.
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