All Forum Posts by: Dev Horn

Yeah, Bill just made a HUGE point there. Find buyers and understand their needs before you spend a lot of money and time on marketing. We have people calling us ALL THE TIME wanting to sell their wholesale deals to our investors. They've gone out under the banner of "wholesaler" and found a deal, and they know of NO ONE to flip it to.

So we always say - get your "team" in place first, then do your marketing and go find deals.

Thanks, Michael Quarles. Of course, I agree with you about branding.

Brand accelerates awareness and trust - it makes it easier for people to remember you, and after seeing the brand a few times the hope is that they can recall it when not seeing it (i.e., at the time they are ready to act/call).

Sometimes we forget that, just because we sent a letter or postcard, that's not what motivates someone to sell you their house. The motivation was either already there, or may be there in the future. The FOLLOW-UP is as important as the initial marketing.

In the podcast this week, Jerry Puckett describes how he manages leads using a Google docs spreadsheet where the cells change color as it's time to place a follow-up call or send a personal note via email. Not super high tech and that's why it works for him.

So yes, brand is a huge advantage. But also the processes that people like Michael and Jerry have developed speak to the fact that this is a business and successful businesses market, engage, and follow-up. So many people think they'll do a single mailing, score a big deal, and then repeat once the money flows it. In reality, you may get some quick deals, but it is the nurturing of those relationships that can lead you to great deals and a consistent income (not a one time winning of the "wholesaler lottery").

I'll echo the others. I agree there is a real advantage to being an Agent/Broker in addition to an investor, but that's not a requirement. It sounds like your challenge is actually MARKETING.

Start by identifying your target areas and getting mailing list(s) from a source such as Listsource.com. Mail to people on a consistent basis. You'll find that people are more likely to contact you after you have "touched" then 5 to 7 times. As a result, we advise that you have a 6-month campaign to your target group(s).

Silvio L. - man, you are really off to a great start. You win by making offers, and 7 is excellent. While they may not be truly motivated yet, don't be surprised if one of those comes back to "see if that offer is still good". Main thing is this, STAY ENGAGED - have a follow-up sequence for anyone that is a good target but just not yet motivated enough to sell.

Your response rate was really high - can you tell us a little more about (a) the list you used and (b) the content of your letter?

Wish you the BEST ~

My advice is to keep your focus on the MOTIVATED SELLER. Some people send out a personal letter that sounds like "I'm just a guy looking for a house in this neighborhood, and I saw YOURS and I just LOVE IT. Want to sell? Give me a call!" -- Will this generate calls? Sure, from people that think "hot damn this guy may pay MORE than fair value because he loves MY house!".

Ultimately, if you generate calls like that, there is going to come a moment when you tell them the REAL DEAL - your offer for their house... which reveals, you do NOT love their house. That was a trick to get them to call. Now that you have them, you're pulling the old switcheroo on them and hitting them with a "low ball" offer.

We keep our message TIGHT on our option as a way to sell a house that has become more of a liability than an asset for the homeowner. Discounts on ARV are driven by NEED FOR REPAIRS and the URGENCY OF THEIR SITUATION. If neither of those conditions exist, there is no reason for the homeowner to even consider an investor offer, and you'll be wasting your time if you send out marketing that causes those people to call you.

The housing market is pretty strong in most markets. If you have a nice house and a DESIRE to move to another area, you would get an Agent, list it on the MLS, and sell it in 30 to 120 days at retail value. Why would a person in this scenario sell to an "investor" or "wholesaler" at a discount? 99% of them wouldn't.

The thing that distinguishes a MOTIVATED SELLER is NEED. They have a NEED to sell vs. a DESIRE to sell. The need is usually financial, but could be a range of other things.

With all due respect to the writer of the article, it makes no sense to make a blanket statement that homeowners should not sell to investors or wholesalers. What is their situation? Once you start doing this you will hear a MILLION stories. And some of those people will be much better off to sell to an investor than hang on to a property that is more of a liability than an asset.

I talked to a guy today that has a $2M house in LA that is in "excellent condition". He wanted to know what an investor could do (can they buy houses that expensive?) and how it works (how much of a discount do they need?).

In the course of the call, he didn't tell me WHY he was in a hurry, but the guy was clearly under some pressure to do something quickly. I connected him with one of our investors in LA (who is also an Agent) to take it from there.

So, it's not always BOTH conditions (urgency + need for repairs). Urgency alone can cause someone to seek a quick cash offer.

Some common scenarios besides pending foreclosure:

1) Have two house payments and it's killing me! Just need to get RID of the house I no longer live in!

2) Just got a divorce and we need to sell this thing FAST so we can split the proceeds and move on with our lives!

3) Inherited this property from my mom and dad - i don't live in that city, the house needs lots of repairs before I could sell it, and now the taxes are due on the property. Can you take it off my hands?

Ah, bandits signs. The most productive yet most illegal form of advertising! =)

A true "motivated seller" usually has 2 key dynamics:
URGENCY - need to sell quickly; lost job, foreclosure pending, etc.
NEED FOR REPAIRS - something is preventing the home from being sold in the retail market - usually major repairs that the seller cannot afford and that will prevent the house from being purchased with FHA financing.

In addition of course, we look for EQUITY in the property.

If someone is about to be foreclosed on and they cannot sell the property, they will lose their equity. By selling to an investor, they can often sell quickly (avoiding foreclosure) and get SOME cash at closing (at least get a piece of that equity).

There are literally THOUSANDS of sellers in this situation. They contact us every day.

I'll echo my concern again that this transaction should first be discussed with the custodian of your SDIRA (which must approve all investments made with the SDIRA). IRS does not want people to invest IRA $$ and then pull non-IRA profit out of the transaction. You may be able to structure it as a note, a loan to Joe, with a 10% interest rate. But I THINK (again, not an expert in this area) if the SDIRA $$ are used to directly purchase the property and are used to repair it, then any proceeds from the subsequent sale of the property must go BACK into the SDIRA.

Joe could perhaps be paid as a contractor (if that was his role), but I am just not sure how he would split the proceeds resulting from an SDIRA investment.

This article doesn't make my point exactly, but it speaks to some of the issues involved in purchasing RE with SDIRAs:
http://www.foxbusiness.com/personal-finance/2012/05/08/how-to-use-self-directed-ira-to-buy-real-estate/

Awesome Daniel Inman - we are all pulling for you here!

I've got a lot of experience marketing to probates & absentees (and motivated sellers in general) - if you have any questions about that feel free to message me here on BP!