Good Afternoon Everyone,
I've finished my marketing plan, and initiated my property search, but I'm still struggling through two MAJOR ITEMS:
-
How to create a buyers list with no previous sales or current investor network (other then you all ;)).
-
How to determine if a deal is worth the trouble.
In attempting to create the buyers list I know the Investor clubs will provide a steady network, but in attempting to wait and create contacts,make friends, etc. I’m worried i’ll be missing potential deals. I’m finding AT LEAST 20 “POSSIBLE” leads a day and I’d like to send out a couple emails or make a couple calls to try and initiate a “quick-start” list of SERIOUS INVESTORS. Any suggestions on what to say on the phone or in the email that would convince investors I’m serious would be appreciated.
As far as the second concern, I’m more or less wondering what a seasoned investor looks at to decide if a deal is worth pursuing. I know about the “70% rule”, but obviously there are numerous other costs, such as closing costs, holding costs, etc… What should I factor in to my offer that usually takes the newbie “out of the game”?
Thank you all for any advice given. ;D
I know our local REI club has a Yahoo! group that investors can swap information on. You need approval from the moderator first, but you don’t even have to be a member of the actual club. Not sure if your local REI club has anything comparable. If not, it may be a good idea.
Acutally, the “70% rule” supposedly takes into account all plausible costs, so you are pretty much covered. It’s a good standard, but it isn’t a good measuring stick to use for all occasions. For instance, if I can buy a property 10% under market, sell it via owner finance, and still make $20k+, I would have missed the opportunity using the “70% rule”. I have several spreadsheets I’ve developed myself that I use - each one specifically for different circumstances. Even then, an occasional property comes up where I need to pull out the pencil, paper, and calculator, because it has some unusual circumstances.
Ah…the chicken and egg syndrom. (I feel your pain, been there)
Congrats on “doing” something, that beats 95% of people out there.
You need to seperate yourself from the other newbies…Know and learn your market.
Don’t just say “I have a deal, here is the address @ $xxx,xxx. Let me know if you like it” I’ve had many many emails like that or with a little more than that.
You NEED to give a complete breakdown of the deal…price/repairs/holding…everything that you would have to know to do the deal yourself. SHOW them what they can make, once they see you’ve done your homework and it might be something they want, they will double check your work. This is what seperates you…if your info is good…they will know MOST of your deals you send will be worth looking at.
The first question your buyers should be asking you is “why don’t you take this deal?” then you know you’ve hit it out of the park.
Good Luck
DMiller & NoMoneyDown,
Thanks for the tips. How can I collect all the contact information for these"buyers"? Going to a local REI meeting has been less then advantageous as the local club seems to be a metting place for people to sell their services as opposed to network and share ideas. I have entertained the idea of calling the other investors whose ads are in the paper stating "I BUY HOUSES", but I'm not exactly sure what to ask them when I do get answer. Any ideas?
I have entertained the idea of calling the other investors whose ads are in the paper stating “I BUY HOUSES”, but I’m not exactly sure what to ask them when I do get answer.
From my brief experience, most of the “I/WE BUY HOUSES” ads are from relatively new investors. I’m not saying this is bad, but just my experience. I’d simply ask them what geographic locations they like/don’t like, what type of properties (MH’s, SFR’s, multi, commerical) they fancy, property characteristics (beds, baths, age, etc), and what type of investing they specialize in (rehabs, wholesaling, Sub2’s, etc).
Thoward,
Networking at these meetings are work, meaning you have to get what you want out of it. Watch and see what people are selling…chances are you will see a wholesaler offering services, go meet with the people who talk to them (as they are buyers right?).
Further…Offer your services, let them know what you specialize in and what your going to offer them. Be truthful, as lying will come back to bite you very quick.
What to ask?
Where do they invest?
What type of property?
What $ can they handle?
Can they do multiple deals?
Financing or cash deals?
How long have they been investing?
How much profit do you expect to make per deal?
What is there strategy, rehab/buy&hold/etc.
This will give you a pretty good idea on WHAT your list is looking for, next you need to KNOW if the deals you are finding ARE deals…crunch the numbers and put together a nice proposal that you will send to your list. The more correct info in this proposal the more seriously I will take you as a business person. (this is a business, not a hobby).
Hope that helps.
Thank you both, your input has helped greatly. ;D