All Forum Posts by: David Darling

Raymond, Go to your local REIA (Real Estate Investors Association) with handouts (color works best) about your deal. If your deal numbers work, you will have many, many interested buyers. Get their phone numbers and follow up with them the next day. On the PDF have the property info, ARV, repair estimate, and comps.

Nowadays, I call a buyer to see if they are interested, text or email them a PDF of the deal, and give them 24 hours to respond. Be firm about the 24 hours. If they don't get back to you, go to the next buyer. Let them do their due diligence to see if your numbers work for them. 

I never needed to build a buyers list because, after 3-6 months of attending my local REIA, I had 6-8 investors who would buy all my deals. Be sure to rotate your deals with your core group, so everyone knows you are being fair and not just giving all your deals to 1-2 people.

Well, here is no chicken/egg scenario.

You have to do all of it all at the same time.

Market, find deals, find "short list" buyers, et al.

It will all fall into place because your mind will prioritize every thing.

You will make mistakes, but learn from them.

BTW. I found all my buyers at my local REI club.

Stay with people that live where you do until you get really, really good.

After you have been around a while out of town people with money will be calling you.

DD

Hello Everyone!

I have been wholesaling deals since 2002 and I have learned that 99% of the time the same 4-6 buyers will buy all your deals as long as they make sense.

This talk about having 30, 40, 50 or more people on your buyers list is actually a BAD thing for the very people you want to buy your deals. The first-come-first-serve attitude will cost your money.

Here's why...

It may seem cool to be able to send out an email blast to 40 people who are on your list, but it often does not produce the best qualified buyer.

Think of it from the buyers point of view... They get an email from you about a property, they call you and find out you have assigned the contract. OK they say to themselves, I missed that one.

So, three months later they have called you on 6 of your emails/deals and they are always taken. You have mentally been thrown in the garbage can because you have not come through for them. One person on your list is happy, and 39 people are unhappy.

That will work against you every time.

Bad Mojo...

What my business evolved into is I have about 6 investors that take all my deals. Of those 6 people,3 of them do 75%.

You build a great relationship with them. They know your deals are moneymakers. They know you are fair. They know they didn't get this one, but they will get one from you soon.

I am to the point that while I am standing in the house and talking to the seller, I know who on my list will get first shot at this deal. 

The people on your short list will know (it is a small community) who is getting your deals so you have to rotate them in a fair way. 

So, it is waaaay better to have your short list than it is to have a gigantic list of buyers.

You will make more money, stay in business longer, and you still keep 30 or so people happy (you, seller, buyer, contractors, property managers, et al).

David D

Will,

What you described in going to the property and doing your due dilligence is what every buyer has to do before they move on the deal.

In this case the numbers don't work and you would tell the wholesaler you are going to pass. It won't take long for everyone to see that this is not a deal.

It is not the responsibility of the wholesaler to give accurate repair estimates, although he or she should be well within the ballpark.

It is the responsibility of the buyer to run their numbers and see if it is a deal.

I have my core buyers group of about 6 people that I always give my deals to first.

The way I would present the deal is to say something like-

Here is the house at 123 Main Street.

I think the ARV is $300K.

The repairs are around $35K

I will assign the contract to you for $180K.

Get back to me in 24 hours.

(I will have the property under contract for $175K max, probably much lower).

Again, the due diligence you described is what my buyer would do to see if it is a deal or not. It is not the wholesalers gig to give spot on repair numbers. That is the responsibility of the buyer.

Your buyers will know that you usually have good deals and even if the numbers don't match, they are close enough for everyone to make money.

At first glance, wholesaling looks to be the easiest way to get into RE investing. It is not. But, wholesaling is the only kind RE investing I will do. It is almost anti-climactic when I get the seller to sign a contract and a buyer to take the deal. I am already thinking about the next deal I am working on.

I make my money when I get the contract. I collect my money when the house closes.

Oh, I am always at the closing even though I have assigned to contract. The sellers are still selling their house to me in their eyes and it is only right that I be there at the closing. Plus I like walking out with that big check.

DD

Chris, I have assigned contracts to other wholesalers many times. It all depends on who you trust. I can count on one hand the number of investors that buy 99% of my deals. I trust them and they trust me. I had one deal that I assigned to another wholesaler and he assigned the contract to a buyer and we closed in 2 weeks. I made $7500, he made $5000, the buyer fixed the house up and sold it for a nice property. I got what I wanted as did everyone else. Be sure the person you flip the contract to is one of your core "players." do not assign it to anyone else.

Jennifer, As a wholesaler for 8 years I have tried all the ways to find motivated sellers and the one thing that has always worked is direct mail. For every 100 letters I send out I will get 15-20 call backs. The method is very labor intensive when done right, but it works. One piece of advice is not to use computer generated letters. Handwrite the letters and the envelopes and use a regular stamp. DD

I would not go to all that trouble. When you find a deal that cash flows, then call them and ask them if they want it. They will change their minds in an instant if it is a good deal. Go out and find those deals and then email them with the specifics.

I have found that my local real estate club is great for finding buyers. They usually have a Yahoo message board and you will get a number of replies if you post to it. I have been wholesaling for 7 years and I always end up selling to 5-7 "players" that I have sold to before. Occasionally, you will get a new buyer, but the players are the ones with the private money and the experience. The reality of it is that you are competing with other wholesalers to bring them your deals before your competition does. I usually will call only one or two players per deal because I know what kind of houses they want. I tried running ads, but those names you get will not be looking for a house in 6 months, so don't waste your money and time.