I just can't find wholesale buyers!
Heres my situation. I am from Bloomington Indiana. It is the home of Indiana University, and has a very diverse range of family incomes. The population is about 70,000. Being a college town there are a ton of rentals.
However, recently I have begun contacting people who rent out property. I sent out a large absentee mailing. I have emailed everyone* on the chamber of commerce website as well as on the renters association website. I have called everyone* that appears to be selling an investment type property or renting a property in the paper.
What I always get are people who get it (REI and wholesaling in general) a little, but they are a company that holds several apartment buildings, and nothing smaller than maybe a 20 unit.
OR, I get people that have a handful or 1 SFH rental, who do not get it at all. They sound and act like Bloomington is this bubble and no one has ever heard or read REI books like we all have. And to be honest for some reason these people tended to be real jerks.
for example, I called the last number I found int he paper today and it went like this:
Hi my name is Brandon and I saw your ad in the paper. Im not interested in the property, rather I am looking for people who would like to buy property at 70% or less of the value to rent or rehab or what have you.
How do you get the property?
I market and then I when I find a good deal I get it under contract and then assign it over to another person.
You can't do that.
Okay have a nice day.
He had a really weird attitude, so I didn't feel like educating this guy, and let him go.
There is also zero marketing in my community. No bandit signs, no fliers, no mailers that I have ever seen, and my parents own their home. When I sent the absentee mailers people acted like it was revolutionary. They had never seena nything so clever as to mail absentee owners, and with handwritten envelopes at that!
The only thing I have not tried, which I know isn't too big here, is foreclosures. I am going to go to a foreclosure sale soon to try and network with those people that bid. However I bet money most of them are just looking for a cheap house and aren't investors.
I dunno. I need a pep talk. What do you guys think? There has to be something I can do.
Thanks all for the wisdom and time
Brandon
*by everyone I mean everyone I could get in contact with.
It sounds a little like my area. Not many investors here either. Just alot of farmland, with small towns scattered in between.
Ive been reading up on lease options lately. Maybe you could look into that.
You could focus on graduates who are looking to stay in the area, pick yourself up a home, and lease option it out to one of them. The ad almost writes itself. That could be a little niche for you. You could be the guy who gets that new grad (with no credit, or bad credit maybe) into a home that they can eventually own. I dont think that they would be able to get a conventional loan, because of their student loans, so you could use that to your advantage. Also, you know they will be getting (or already have) a decent job, being they recently graduated.
From rookie to rookie, dont be too hard on yourself. Just read everything you can about investing, so you can work from alot of different angles.
Well enjoidc; let me point out a few things that it took me a long time to learn. Once I did learn them my sales numbers (that was my "real" job) went way up. Until you learn them you will spend a lot of time beating your head against the wall.
1. Most people aren't very bright. By most I mean about 99%. The average person is way below average.
2. NO ONE listens to what anyone is saying until they percieve how it directly affects THEM.
3. Everyone listens to every conversation with one ear, waiting to hear how it will affect them, either negatively or positively. When they do start listening they only pick up a few KEY WORDS or phrases.
To prove 2 and 3 to yourself, listen carefully to any TV or radio add.
So when you say; "I am looking for people who would like to buy property at 70% or less of the value"
If he has, in the last 30 days, given any thought to selling his rental unit (and EVERY landlord has this thought, more than once every 30 days). Your prospect hears; " I WANT TO BUY YOUR PROPERTY FOR 70% OR LESS OF THE VALUE".
Or if he has ever though about BUYING another unit, he hears; "I HAVE SOME UNITS THAT I BOUGHT FOR 30% UNDER MARKET, AND I'M WILLING TO SELL TO YOU FOR MARKET PRICE".
You need to establish some rapport (a bit of "warm up") with any prospect before you launch into your "sales pitch". NO ONE listens to a salesman. Everyone listens to people with whom they have some "affinity".
In other words, it's not them, it's YOU. Polish your pitch!
all cash
Yeah, I understand the 99% of people are stupid deal. Ive known tht since I was born :D
Well if people are construeing what I say for something else then whatever. I speak clearly and explain it even better than I typed out here....
Ill keep you guys posted.
Excellent advice, All Cash. I'm going to keep your points in mind when I construct my sales scripts.
All Cash makes some great points. When people are listening to you they want to know “what’s in it for the?”. They are also listening for a reason to say “no” to you. It’s like going into the department store looking for something specific and the salesperson says “can I help you?” and you respond “no thanks, just looking!” It’s just a conditioned response. If you get people to actually have a conversation with you the results will be better. Ask a lot of questions and say little until you have an idea of what might get their attention. You are looking for that one person in 100 that will respond to you, which means you have to get through the other 99. Keep going and try not to get discouraged.
8)
I agree with all cash, I've been working airline ticket counter/customer service for about 13 yrs and 99% of the population is not very bright at all. use the KISS principal...Keep it simple stupid.....
the landlords you called probably more interested in selling their space then buying yours. I think most landlords who only own 1 sfh never intended to be landlords or investors. most of those ended up with the property either through family or buying a new place and not being able to get rid of the old one so they rented it out. if you do manage to find any that are investors you may need to change the sales pitch, first theres 2 things that annoy most people
1) cold calling ..better be careful with that one since the laws changed, i have all of my numbers on the national do not call list and violators can be sued
2) door to door sales....ummm yeh..again careful with that too depending on your state laws you could end up with some bullet holes
if you decide to make a few calls, make em to places with more than 1 rental ad, those tend to be your investor type
next, business minded people want the facts, how can you help THEM, how will you put money in their pocket? mr landlord, my name is brandon and I may have some undervalued properties that would be of interest to you as income generating rental properties.....*perk* mr landlord just heard $$$..now you have some interest in what you have to say
then just tell them you are expanding your network of investors and you can help them find investment property that will put cash in thier pocket and in turn they will be helping you expand your business. its a Win-Win situation
no need to get into details on specific amounts like 70% of market value, if i were the investor I would be looking at your numbers...well you said 70% why am I paying 78%? see what I mean, you are cutting your own throat by putting out solid numbers
as to how you find the property...non of thier business how you find it, you have contacts that assist you in locating property and thats all they need to know
now i just need to heed my own advice and life will be good lol
Also - I would stay away from making statements and ask the right questions instead. Get the other party to do the talking, and they will tell you how to sell them. Forget about trying to educate them.
regardless of product - sales is sales is sales.
For example my last gig was selling marketing solutions to car dealers. Now if I told the dealer "business sucks, you need to do something and I have the answer" - I'd get hustled out the door.
But when I asked the right questions to get the dealer to say "my god, business sucks, I need to do something" thats when they started listening and became buyers.
Either way business sucked and they needed to do something. That was always true. It's all in the approach.
Ask the right questions.
Personally I just don't really care what they think about what I do, I just get the information I need without necessarily telling them what I do. Typically my first question is "Are you looking to buy more property?" Then with a conversational tone and not like I'm reading a script, I shift into what they are wanting, "What are you looking for? 2 or 3 bedrooms? Rentals or rehabs? What area's are you looking in? Do you already have your financing lined up?" I normally write their answers on the back of the business card that they usually just gave me.
I usually finish it up with something to the effect of "I run across a lot of property, if I find something that you might be intereseted in I'll give you a call." I always hear, yeah that sounds great.
I'm never looking to educate anyone. If they ask for advice I will give it freely, but most people have major insecurity issues and I could care less about their ego trip or mine. If they're confident and/or arrogant about what they're doing then I humbly just try to find a deal to fit into what they've decided they need.
In your example Brandon about talking with a seller or landlord, first I would make sure I focus on building a connection first. If you live in a slow paced town then maybe slowing down with people would help. Instead of telling them right off the bat that you are not interested in their property and you want to sell them something, you could talk with them some about their property and build some type of connection before you jump right in. Relationship first then the pitch.
I would probably spend 5 or 10 minutes doing some good old boy rubbing elbows stuff, letting him tell me his glory/horror stories about the house or other properties or about whatever. The first key is making him feel safe and then getting him to open up and talk with you to start building some connection. Then at an opportune time I'd say something like, "Well Billy Bob, are you looking to buy more property?" From there I would casually in a conversational tone start to extract the information I need to find him property that he likes, wants, and would be willing to buy from me. I wouldn't tell him about assignments or double closings or any of that stuff. At the end of the conversation I would slowly say, "Well Billy Bob, I run across a lot of property, if I find something that you might be interested in I'll give you a call." He would most likely respond with "Well, that's sounds great."
Now there are learned negotiating/people skills that can help you lead people in any situation. Normally these skills are developed through some type of sales experience. Whether you realize it or not, people skills are huge in every facet of real estate. Any type of sales background will help you greatly in this business. Starting out I would keep it simple and focus on tactfully getting the information you need.
people love talking about themselves and things that relate to them. Focusing on commonality and how a deal will benefit them always helps. Keep it focused on their potential benefits and the "feelings" that are attached to making money
enjoidc,
You have no further to look than your own backyard. You are in Bloomington,IN and you are only about 45 min away from Indianapolis which has an abundance of people looking to purchase and sell wholesale properties. There are also 2 pretty good REI clubs in Indy that meet each month that would give you an excellent opportunity to network with other investors. I'm from Indy myself, so feel free to email me if you'd like.
this is a little late getting to you (date wise)
but the auction is a good way to find buyers.
Buyers at auctions are cash buyers,
and they usually don't get to see the inside (legally) of those properties
that they bid on. So, sometimes they don't know what the real repair costs are until they purchase and get inside.
If you have propetries tied up, and they can see the inside first,
they should love it.
The other comments about building the relationships are correct and critical. When you establish this trust, you can sell to them a few times a year or every month with some buyers.
Don't be affraid to talk to the investors that you find, or the ones that call you, they may be old school and just not know.
Originally posted by "REI Coach":
Move to a bigger city...No, really, why not just market yourself in another city? If you are only looking to flip houses locally, you are missing out on tons of cash anyway. Put online ads on Craigslist and Backpage for the city you want to invest in. Partner with a direct mailing company to target that city also. Take out a classified in their local paper.
Go to Chicago, Atlanta, Dallas, Houston, Jacksonville, Orlando, Tampa, Miami, etc, etc. No need for a wholesaler to visit, or see, a property to put it under contract. I've never once met with a seller or seen the property before putting it under contract. Use your resources, like your computer and phone.
this makese the most sense. you aren't too far from chicago or Indy or even mid-sized towns like Peoria or Bloomington, IL or Rockford, IL. I'd try marketing on anyone of those areas