I am getting frustrated
I now have 7 properties under contract to wholesale
All of them at or below 70% ARV, I am trying to get 5k or in some only 2k wholesale fee
I am getting a lot of interested investors asking but nothing is selling yet
we showed one investor a property and he said he was going to work on financing and I sent him the assignment but now he does not return my emails or calls.
I am advertising on craigslist and sending info to my small list of investors
“Investors” are not the same thing as “Cash Buyers.”
Evidently, your advertising is targeting the wrong audience.
While you hunt up actual cash buyers, you might want to try advertising a phantom deal that’s 50% off market value, and say ‘cash buyers only’. Then when you get actual buyers with cash, you direct them to your current inventory. The pros will understand what you’re doing with the phantom deal, as the rest aren’t likely to perform anyway.
You could also test a competing add with all the same information, but adding “If you need financing, this house isn’t for you.” I’m betting you get some helpful feedback from that.
Guerilla search for cash buyers: See who has taken title without financing, and for low prices in your farm area. You can also sift for these on listsource.com. ie: Low prices; no mortgages; transfers within the last two years, etc.
Or ask your title company (recommended) rep to run a search for ‘cash buyers,’ or perhaps search the MLS. Try to get phone numbers with the addresses.
Or hunt up the active rehabbers in the area. Drive around; find houses that are being renovated.
Meantime, keep your “steal” ads up everywhere you can, including bandit signs in front of the houses. The most-likely buyers, or their bird-dogs, are trolling the area for deals.
BTW, market to ‘cash buyers,’ not ‘investors.’ These are not necessarily the same things.
FWIW
I was talking to someone just other day in a similar situation. He got offended by what I told him, but I was speaking honestly.
You get what you should get, when you should get it. Sales only come from building up the proper system. If you’re getting frustrated, redirect the energy from frustration into learning and building. Go get more advertising setup. More CL ads, try FB, build a website, etc.
Well if your looking to co-wholesale I could help out. I’m a marketing pro and have no issues finding cash buyers. I have more issues finding deals.
From the looks of it. It seems you have some good deals i would just continuing to keep promoting them on craigslist. Someone should bite on them eventually. How long is your contract for?
I bought a cash buyers mailing list for my area through a list broker to sell my first few deals. They were the cheapest I found (500 names for $40 bucks) and it paid off. I can’t post the website link here but you can PM me
Is it possible to obtain a listing for my areas as well? I live in Chicago and would definitely pay for a listing PM me.
Thank you much.
Jacob
Might be that they arent great deals
Great point. Hope it works for you soon and you get some deals closed!
Hi Debran,
Ok, let's cover some basics!
A 70% LTV home wholesaled to a buyer should be in pristine condition inside and out and completely remodeled in the last 5 to 7 years!
Any home in any other condition is deducted for every single thing required to create a pristine home!
Now let’s take a 70% purchase price home, I take it your providing 3 or more valid comps to support your price. These need to be really fresh because the buyer will need proven value for an appraisal or for a private or hard money lender to substantiate value.
Now let’s suppose for example a value of $100k retail and subtract from there.
$100,000 Retail FMV
$70,000 Wholesale price
<$6,000> Investor listing commission for end buyer resale
<$2,500> Escrow cost for end buyer sale
<$1,400> Escrow cost for wholesale purchase
<$1,400> Points to hard money lender for $70k purchase loan of $56k (80%)
<$351> Cash on cash cost of $14,000 dollar down payment for purchase
<$1,680> Interest on Hard Money Loan for 3 months
<$300> Electric service for 3 months
<$300> Water / Sewer / Trash for 3 months
<$150> Lawn service for 3 months
<$240> Pool service for 3 months
<$400> Termite treatment before end buyer closing
$14,721 Cost to buy 70% LTV Pristine Condition Home to Resale
$15,279 Potential Investor Profit if Everything Goes as Planned and Projected
Now every single repair, replacement, cost of materials or labor comes off of $70k including your mark up!
$70k for 1000 sq. ft. home for example.
<$1,500> Carpet / Vinyl @ $13.50 per yard installed
<$2,000> Custom Painting (White Ceiling, Colored Walls, White Trim)
<$1,500> Landscape Upgrade
<$5,000> Wholesalers Mark Up
<$1,500> Wholesalers Closing Cost
$58,500 Wholesalers Contract Example
I always provide my own Hard Money Lender so any buyer can put 20% down for example!
I can always tell my buyers XX percent down and Dave’s Donut World and Hard Money Lending will carry the loan for 6 to 12 months!
Get on the phone and find a Hard Money Lender to work with who can pre-screen your wholesale properties and agree to loan with X or XX down! Cash buyers are great too but you need to have financing arranged for those who may need it!
Good luck,
GR