Hey guys, I’m putting together my business plan for my wholesaling business and I just wanted to get your opinion on the part where I explain my sales strategy. Don’t hold back :deal
Main Strategy: Wholesale
Upon locating a property that meets our criteria, we will immediately market it to our buyers list in order for us to have an investor already to buy the property before we even close with our seller. We developed our buyers list by networking with rehab investors, landlords, other wholesalers and owner occupants looking for fixer-upper type homes. Having the buyer ahead of time will all but guarantee a profit because we will know what they are willing to offer and thus be able to determine what our price point needs to be. If we do not have a buyer from our buyers list lined up we will market the property by
* Advertise online
o Homes.com
o backpage.com
o craigslist.com
o NJMLS.com.
o GSMLS.com
o Activerain.com
o Zillow.com
o Trulia.com
o Realtor.com
o Googlebase.com
o OurNJHouse.com
o ExitGolden.com
o Exitrealty.com
o Oodles.com
o Postlets.com
o and more
* Advertise in local new papers
o The Star Ledger
o Daily Record
o Local penny savers
o Hanover Eagle
o and more
* Offer the property at our monthly Real Estate Investor's Association meetings and on the GSREIA's yahoo group message board
* Place Bandit signs around the neighborhood
This advertising will also contribute to our buyers list for future wholesale deals. We, however, do understand we may come across a handful of properties we cannot wholesale to other investors. In such cases we have several exit strategies in place that will allow us to recoup our investment over time.
#1 Fix and Resell
We will close on the property ourselves with the intent to rehab it to a resale buyer. During the first 2 weeks of the rehab, during planing and clean up, we will continue to market the property to investors in order to keep our options open. We anticipate a holding period of 3 to 6 months. We will list the property with a Realtor to make sure the property receives maximum exposure. We will not sell the property ourselves and instead will rely upon our Realtor and all the other agents that have access to the Multiple Listing Service to bring us qualified buyers. Our goal is to sell the property quickly to lower our holding costs and maximize profits. We feel our time is better spent finding deals.
#2 Fix and Rent
We would close on the property ourselves to rehab it with the goal to rent the property as a long-term investment drawing positive cash flow, or until we find a resale buyer. The minimum for long-term investment is at least $200 a month positive cash flow using the formula, After Repair Value (ARV) * 70% - Repairs. We would refinance the property to payoff liabilities such as mortgage or line of credit and other expenses incurred during the rehab process and then take some of the profit, if possible.
#3 Lease Option or Rent to Own
While the overall conversion rate (lessee to owner) in the Morris County area being below 25%, this method is still a viable alternative due to the popularity of the area with first time homebuyers wanting to purchase a home and do not have the upfront money for a large down payment, which is usually required in this market. This method will provide us with cash up front, higher rent, and an opportunity to sell the property sooner without additional expenditures on such things as advertising.