wholesaling in Knoxville Tennessee

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wholesaling in Knoxville Tennessee

Benjamin Barredo
Wholesaler · Knoxville, TN · Member since 2016 · 247 posts · 76 votes

Any wholesaler out there willing to answer my question? Spread some knowledge? Dish some data? 

Are there any laws, customs, etiquette, or general rules of thumb I should follow as a wholesaler? Anything pertinent I need to be aware of? 

Also, I'm a broke newbie and don't have the cash to spend on lists or marketing. I've been driving for dollars and signed up on Intelius. I am ready to start cold calling, as well as handwriting and mailing lawyers as I gather potential seller info, but I don't know how to start the conversation. 

Here's my plan. 

"Hi. I'm Ben Barredo and I buy houses. I came across your home while I was out the other day and was wondering if you are our have ever considered selling it?"

Then what? I know it depends on their answer but is that the right approach? Is that too strong out the gate? Then where do I go, from start to finish? 

I don't want a script. I wasn't this to be natural bit any tips you can give me. I know there's an art to this. 

Thanks
Ben

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Charles Jones
Specialist · Pensacola, FL · Member since 2016 · 16 posts · 7 votes
10y

Tip #1...Don't let them (potential sellers) know you're a broke newbie. However, you also don't have to act like you're an experienced real estate investor that has all the answers.

Also when you do get a property under contract, market the contract only. Do not market the property. By marketing the property you are acting as a realtor, and unless you are a licensed realtor, that could potentially get you into some trouble.

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  • Chris Piper
    Wholesaler · Mishawaka, IN · Member since 2013 · 438 posts · 346 votes
    10y

    @Benjamin Barredo The VERY best thing you can do is ALWAYS have accurate comps and repair costs. Also, try your best to close on every deal you put under contract or you might start to get a bad rep in your area.

    As far as being a broke newbie and mailing/cold calling here is my suggestion. Spend $65 on 25 blank yellow bandit signs and 30" H-stakes. Order from Dirt Cheap Signs out of Texas. Handwrite the signs with the biggest Sharpie you can find, something like:

    WE BUY HOUSES!!

    Any Area - Any Condition

    Fast Closings - All CASH!

    (555)555-5555

    That will get your phone blowing up with motivated sellers. Put the signs up at major intersections in your area. You have two options here: 1. Put them up after 5pm on Friday's and take them down that same Sunday. 2. Put them up anytime and use a Google Voice number on them or a burner number. Most cities will fine you for putting up bandit signs. You can avoid this using either of the two options listed above. 

    As far as mailing, I would check out been verified. You put in the property owner's info, and it spits out an email and phone number for them. Then, you can just call them, no waiting for a mailer to reach them and hoping they call you back.

    When cold calling absentee owners from driving for dollars, I think what you have so far is fine. There is really no script. Just be polite, let them know why you are calling, and always ask them how much they were looking to get out of their property as-is. Then don't say a word, let them give you a price. Go from there and try to work out the deal. Make sure you do a walk through before you make any offer and run your numbers including accurate comps and repair costs first to see if it's a good deal for yuou or not.

    SELLING PRICE FORMULA:

    ARV-30%-Repairs= Your Selling Price

    MAO(Max Allowable Offer) FORMULA:

    ARV-30%-Repairs-Your Profit= MAO

    2Reply
  • Charles Jones
    Specialist · Pensacola, FL · Member since 2016 · 16 posts · 7 votes
    10y

    Tip #1...Don't let them (potential sellers) know you're a broke newbie. However, you also don't have to act like you're an experienced real estate investor that has all the answers.

    Also when you do get a property under contract, market the contract only. Do not market the property. By marketing the property you are acting as a realtor, and unless you are a licensed realtor, that could potentially get you into some trouble.

    3Reply
  • Selina Banda
    La Vergne, TN · Member since 2016 · 93 posts · 28 votes
    10y
    That is awesome discussion. I have learnt something
    0Reply
  • Benjamin Barredo
    OP
    Wholesaler · Knoxville, TN · Member since 2016 · 247 posts · 76 votes
    10y

    @Chris Piper and @Charles Jones

    How about some feed back.

    I made my first cold call and got the owner. I had my 17 month old with me and I knew it wasn't the best scenario but I was freezing up and making excuses and just wanted to get my first call out of the way.

    I asked about his house and was tripping over my tongue. He did say he wasn't selling but even if he was he had someone already wanting to buy it. I asked if he owned other properties because if he did he might end up hearing from me again. I told him I'm a wholesaler (messed up and told him it was my first call ever). He said he'd save my number if he decided to sell. My daughter broke something and started screaming at that point. I could tell he was wanting to talk more because he was trying to start a conversation but I had to get off because of my daughter.

    So, other than telling him I'm a newbie, what would you have done differently? How would you follow up or would you not since he said he wasn't selling now. I thought I'd add him to my mailing list.

    Thanks.

    1Reply
  • Charles Jones
    Specialist · Pensacola, FL · Member since 2016 · 16 posts · 7 votes
    10y

    @Benjamin Barredo don't sweat this call, just learn from it and move on. DEFINITELY follow up with him...heck I'd even consider mailing him an offer letter, something like "Thanks for talking to me, here's a cash offer for you to consider." Of course, you can make it a little more personal and detailed, but you get the idea. You'll make mistakes, that's fine, just keep going.

    0Reply
  • Benjamin Barredo
    OP
    Wholesaler · Knoxville, TN · Member since 2016 · 247 posts · 76 votes
    10y

    That's a great idea @Charles Jones. I'll already moved his name to my mailing list. I'll do that though.

    What do you think of this. Since I don't have a lot of money mailing tons of letters and mailing a few a week using a book of stamps twice a month would still take a long time. What if I stuffed my handwritten yellow letters in envelopes and shoved them in mail boxes as I D4D? What do you think of that? I just posted a Craigslist ad under "looking for real estate". Do you think I should post under "for sale by owner" too?

    0Reply
  • Chris Piper
    Wholesaler · Mishawaka, IN · Member since 2013 · 438 posts · 346 votes
    10y

    @Benjamin Barredo As far as the awkward phone call, don't worry about it. You gotta crawl before you can walk. The more times you do it, the better you'll get. As far as the stuffing letters in mail boxes, I would not do that. Opening someone elses mail box is a federal offense. In my opinion as I stated before, skip the mailings for now, and go with the bandit signs. You will get plenty of motivated sellers calling you from those bandit signs. If you're ever short on inventory of properties, call other wholesalers in your area. See what they have and how much they want. If you have cash buyers and can make a deal work, then you just saved yourself the hassle of looking for sellers. Or you can try to do a JV deal with them and split 50/50 if they need a cash buyer and you have one.

    1Reply
  • Heather Bettis
    Sweetwater, TN · Member since 2017 · 36 posts · 11 votes
    9y

    Great Post and some great advice. Thanks, I have learned some things. I did notice this thread is a couple of months old so would love to see a followup to let us know how you are doing now @Benjamin Barredo

    1Reply
  • Chris Rusoff
    Brick, NJ · Member since 2013 · 30 posts · 6 votes
    9y
    Charles Jones , what is the difference between marketing the contract and marketing the property? Can you give me an example on how you would word it? Thanks.
    0Reply
  • Charles Jones
    Specialist · Pensacola, FL · Member since 2016 · 16 posts · 7 votes
    9y

    @Chris Rusoff here is an example of what I send to my buyers list when I have a property under contract.

    "I am a principal party in a valid and assignable Purchase and Sales Agreement which allows me to purchase 123 ABC St. I am offering this Purchase and Sales Agreement to another cash buyer as to allow you the opportunity to buy this home."

    0Reply
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