Which comes first- ARV or Cold calling

Question

Hi everyone!

I’ll be calling 3 realtors today to hopefully work with me and give me information on some properties I found. My question is, should I reach out to the property owners first to see if they have motivation to sell (without yet having an offer for them) or should I work with the realtor to find the ARV of the homes even though I don’t yet know what the repair costs are and therefore don’t have a MAO?? I have missing information so I don’t know which way to go first. Thanks for all of your help.

Lydia R. · Answer

@Yenisel Avila I think you are putting the cart before the horse a bit here. You should definitely not be wasting an agents time by asking for comps on a property where you dont even know if the owner is willing to sell. It sounds like you might not be at the point where you are ready to be calling sellers, but you should be calculating ARV on properties when you have a seller who wants to sell.

Lien Vuong · Answer

Reach out to motivated people first, your list of people that are willing to whittle down quickly - to 2-3%, and prior to walking in and meeting them for the offer you can calculate the max offer price you can give them at the appointment. Working in reverse would be futile for your efforts.

Barry Pekin · Answer

@Yenisel Avila,

Don't waste your time calculating deals before you have been in contact with a seller and have found them to be motivated enough to use your services.  At least 95% of people who sell their homes do so through an agent, and most people aren't selling their houses.  So taking that into consideration, you'd be calculating a LOT of deals, and I mean A LOT, before you ever actually had to have any numbers to reference.  That's a huge waste of time.

Whether your marketing is inbound or outbound, I wouldn't worry about calculating ARVs and repairs until you actually need them.  Now, if you want to practice, that certainly has its value.

Jerryll Noorden · Answer

Dude, listen.

It seems to me you are not ready for the steps so many people here have given you... so here is what you need to do.

It is not about getting a wholesale deal. It is about running a wholesale business.

Wholesaling is very difficult if you are a "nobody".

As a wholesaler you have little credibility because you are not actually buying houses. Your best weapon is being honest and transparent.

You do not do wholesaling by following a list of ordered steps blindly. You need to get a business plan going.

You need to set yourself up for success.

You need leads. That is the hardest and most important thing there is about wholesaling and anything investing really.

So the first thing you need to focus on is how do you plan to get leads.

Do not worry about a buyers list (yet). That comes automatically once you have discounted off market leads.

Again, the first thing you need to figure out is how are you going to get motivated seller leads.

Second. Once you have the leads coming in, how are you planning to handle them? Talk to them, make offers and negotiate prices, build rapport etc. etc.

Do you know how to do ARV's? No? OK don't count on agents to do that for you. Learn how to do it. It is very easy and it is simply something you need to get good at. Stop relying on other people (too much) to become successful, because you won't become successful if you do!

OK so now you have a way to get discounted off market motivated seller leads, and you know how to handle these leads.

Now you have everything in your arsenal to make offers, and negotiate on offers.

So what would be next?

Now you need to get your legal team in place. Know the laws, know what you can and can't do marketing properties you do not own (you can't without a license). Get your contracts in place, and read your contracts over 15 times. Understand the contracts, your responsibilities and their responsibilities according to the contract.

Then get a procedure going, tweak the procedure with each run, and turn it into a system that you can follow (or have someone else follow) on autopilot.

Market the contract the legal way to buyers, and organize each and every buyer that shows interest in a data base. Determine how serious and capable each buyer is, and after you determine they are capable buying in cash, get the necessary info out of them. Where do they buy, profit margin, do they buy with their own cash, what kind of properties they buy, how many they buy/month/year... anything that will help you bring value to them. Treat them right but be strict with your buyers. They need YOU more then you need them so do not tolerate crap from them.

Of course I omitted a lot of details, but I hope you see my point here.

It is not about a procedure. It is not about some ordered steps, it is about a plan.

You are not doing a one time deal... at least that is not the goal here. you are running a business. Treat it as a business not as an errand.

Cameron Tope · Answer

It's awesome that your calling folks and actually taking steps to your first deal!

I would take 10 minutes to write out your "process" for making an offer. It might sound trivial but it will give you some clarity about how to make offers more efficiently and others (agents, REIs, etc) will be more likely to want to work with someone whose organized.

Once you have it written and have run through it a few times, you can make adjustments/improvements to the process.

Hope that helps!

Stephen J Davis · Answer

Wholesaling Steps:

1. Build your buyers list and find out what they want. Join a local real estate investor group to do this.

2. Start looking for deals that fit your buyers wants.

3. Find the ARV with a service like1

https://www.homeinvestortool.c...

4. Get a written bid for the repairs.

5. Write offer and get control of the property.

6. Assign the contract to one of your buyers.

There is much more to it but this is a good start. Good luck.