Today, we are going to talk about something I like to call “apple trees.” Many times when you’re wholesaling, you try to pick some of the low hanging fruit. You know, the deals that are easy to grab and don’t require much work.
Well, when I think of picking low hanging fruit, I think of an apple tree, and in my business, I prefer to have several apple trees to pick from.
For instance, I have a direct mail apple tree that I can pick from. I also have a lead generation website, so I can pick low hanging fruit from that. I might be able to get a few deals from the MLS, so I can pick some fruit from that apple tree as well.
But there’s one apple tree that I am currently picking from that is giving me far more deals than my other apple trees, and honestly, I didn’t even think this could work as an effective wholesaling lead generation strategy!
Just this month alone, we’ve acquired 27 properties, and 20 of them came from this specific apple tree.
Related: 5 Side Hustles to Help Sustain Newbie Real Estate Wholesalers
So without further ado, let’s jump into today’s post!
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
The Top No-Cost Lead Generator for Real Estate Wholesalers
My wholesaling business is in the Indianapolis market and my market is super competitive, so my team decided to take advantage of that competitiveness by building relationships with other wholesalers in my market to see if they had any deals we could add to our pipeline.
Now, people always say there aren’t any good wholesalers out there because they always mark everything up, and their deals are terrible. And if I look at Indianapolis, I would probably say the same thing 95 percent of the time, but there are a handful of wholesalers that actually give really good quality deals.
So, we began looking at their deals to see if they had anything that made sense, and if the numbers worked to our advantage, we would actually buy and take down deals from the other wholesalers.
It’s that simple, and there are so many great advantages with this strategy!
No Marketing Costs
Guys, think about: You could save thousands of marketing dollars with this strategy because the other wholesalers are paying for the marketing on these deals.
This is unlike direct mail, where we’re spending about $2,000 in marketing per deal. So, if you make $10,000, you might as well chop $2,000 right off for marketing, leaving you with $8,000.
All of the Hard Work is Done For You
You don’t have to take pictures of the property (unless they take bad pictures). You don’t have to go and negotiate with the seller or anything!
Now, do you have to do your own due diligence? Absolutely! But a lot of the work has already been done.
Related: 5 Tried & True Ways to Land Deals as a Wholesaling Newbie
Building Relationships is Key!
Some of the deals aren’t going to be that great, and you may just break even on a few deals starting off, but what I like to do is build a relationship with that wholesaler by purchasing their “OK” deals. Then, when they get that killer deal, I know I’m the first one on their list.
It’s very similar to the relationships we have with our cash buyers.
So, guys, it’s OK to take losses to build a solid relationship with other wholesalers.
For instance, there have been deals that have fallen through because someone tied it up at a certain price, and then the estimated rehab would came back $3,000 or $5,000 over what they estimated and the cash buyer would say, “Sorry, you’re going to have to take that from the original offer price in order for us to do the deal.”
In my experience, it’s better to go ahead and just take the loss on your end and do the deal (especially if it’s the day before closing) and move forward because if you’re seen as a repeat buyer who always follows through with the deal no matter what, you’re going to become the first person they think of when they have a smoking deal.
It just naturally happens that way, and if you want to get into that inner circle of the inner buyer’s list that people talk about for wholesalers, buy their properties, and most importantly, make sure the deal works for you.
Even if it’s not a killer deal and you just break even, it’s better to move forward and do the deal to value the relationship.
I always receive emails from this one wholesaler, and he always says, “Hey B, here’s another deal for you. You got first shot.”
I love that email because it shows that we followed through on his other deals, and he wants to give us first shot because he knows we will come through.
Snag the Best Deals by Building the Relationships
There was another deal that was an absolute killer deal, and it was probably our best deals of the month.
The wholesaler told us they had three offers exactly the same and another offer that was $2,000 more than our offer, but since we had closed on another deal that fell through about two weeks prior, they gave us the deal because we always come through on every deal.
So, if you build a relationship, getting first on their list is great!
Now we are starting to become the go-to guys, and maybe you too can be the go-to guy or gal in your market.
Be the first person that they think of on their wholesale list. Take down some of those “OK” deals, and then the next one’s going to be a great deal.
Question: What other no cost lead generation strategies do you use to pick low hanging fruit?