Wholesaling: When To Start Calling And Doing The Math On A Lead

8 Replies

Hi BP,

I did my second two hour driving for dollars session yesterday morning and I got 9 leads in that 2 hours. That sounds like perhaps I am not getting as many leads as I should in that time but regardless I have leads now!

I'm checking public records tomorrow after my third session driving but now the issue is I don't exactly know what to do after I get that owner name and some contact info. At what point should I start doing the math on a property? This sounds time consuming to do it for every property. Is there a typical time to start running the numbers prior to starting a negotiation?

What is usual procedure after getting a leads info? 

""Hi guy I've never met and whose phone number I've mysteriously acquired, I notice your house looks god, awfully dreadful! Hold on just a moment, let me run the numbers for 5 minutes. Okayy... How about you sell that sucker to me at half price eh? Also, I'm gonna need to run about 3-5 people through your house to estimate repair costs, thanks, and good luck with that divorce by the way!" 

That's the current script I plan on using when I make first contact with my sellers. If you have any modifications you think I could make that would be really appreciated as well haha!! 

Thank you all for the great help you give.

You should be able to rough it to see if the numbers even make sense... you should fairly quickly be able to come up with a min/max for your offer. Start with the min, work your way up to the max, once it's over the max walk.

It's hard at first, but once you get it down you should be able to do it in your head quickly. Then once you actually make contact get better idea of the number, then once they agree they are open to sale fine tune it further, etc etc.

You gotta figure out what you want to do though because if you don't you're going to spend your time all over the place and that's not efficient. 

@Matt K.

What calculations should I be doing exactly?

Max offer= (ARV x .65) - repairs

or Max offer=(ARV x .7) - repairs - wholesale fee

And how can I rough it if I don't look up comps in the neighborhood while on the phone so I can get a halfway accurate ARV?

Learn the market and you won't need to pull comps to get a rough idea. Then you need to learn how much construction items cost so you can rough it. 

You should be able to look at a house on the street as you drive by it and say it should be worth xxx-xxx.  Then you should know a kitchen costs x, flooring y, etc. So then when you reach out to the home owner you can say I'm interested in buying your home did you have a price in mind, when they say no start on the low end of your budget. Then you start deducting for repairs as needed....

No sense in getting into the weeds on something when they won't sell it.

I only worry about numbers once I have a seller contact me from my marketing. No need to run numbers for every house on your list IMO. Only 1-3% are going to contact you back anyway.

@Matt K.

How do you suggest going about learning the worth of properties(ARV) in a particular neighborhood? Iĺl be working in neighborhoods all around so I imagine pulling public records for past sales of similar houses would be rather time consuming. What do the big guys do?

@Ryan Horne 

Do you negotiate a price with the sellers on that first phone call or do you say hold on I need to run the numbers?

@Cody Evans I think you are making things harder than they need to be. Here is how I find an initial ARV:
I use Redfin and start by filtering on properties sold in the last 3 months in the zip code that have at least the same number of beds and baths. I start at the street of the house I am evaluating and spiral out ward. I am looking for at least 3 comps, but 5 is better. If I cannot find 3-5 I will extend the filter to include 6 months of sales before I go further than .5mi

Remember that a comp should have a similar style (don't compare ranches with 2 stories), similar construction (brick vs siding etc), and similar age (+-10 years if possible)

If I have issues with getting a consistent ARV, then I consult my real estate agent.

Originally posted by @Cody Evans :

@Matt K.

How do you suggest going about learning the worth of properties(ARV) in a particular neighborhood? Iĺl be working in neighborhoods all around so I imagine pulling public records for past sales of similar houses would be rather time consuming. What do the big guys do?

@Ryan Horne 

Do you negotiate a price with the sellers on that first phone call or do you say hold on I need to run the numbers?

 go on redfin/zillow and look at sold properties...  usually not that big of a difference for an area. If there is a difference figure out why, what made that property go for more/less. You don't have to memorize this stuff but you should be able to look at it on a screen and ballpark it. 

Say you know that bad homes go for 100k, non updated homes 150k, and remolded homes 250k. Let's say you figure this to be true for MOST of the zipcode of 12345... Then you can expand outwards as you find your niche....

I would do the math immediately to determine if its a deal worth pursuing.

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