I’m a somewhat experienced wholesaler(4 deals). So, far I’ve only worked with one investor/buyer who happens to be one of the most aggressive rehab buyers in my area. The problem is that the most I’ve made off a wholesale deal is $3k. I always read about other wholesalers that get about $5k on average and some really good deals for $10k+.
What are some good ways to increase my wholesaling profits? Should I start working with at least a couple other aggressive buyers to try and get the most money for my deals? Should I hold an investor/buyer open house of sorts, and bring in a few investor/buyers on each deal? If I did do this how could I do this on an occupied property? Just tell my seller I work with different “partners”, and that I need to bring all of them through the house to see which ones I can do the deal with?
Thank you for any ideas, insights, experiences, and opinions.
Just look at it in a real simple way:
Profit = revenue - expenses
You need to charge more for the house (increase revenue) or pay less for the house (decrease expenses). You can try to do both. Having more investors should increase your selling price. If you can do that while decreasing the purchase price then you’ll really increase the profit.
Good point Marcus. For the most part I only get a portion of my offers accepted as it is because of how low they are. Which is to be expected. So, my only option I guess would be to increase my number of investor/buyers to bid against each other for my deals therefore maximizing the amount I get for each one.
What do you think about the whole open house idea though? I wasn’t sure if the owner/sellers and the investor/buyers would both go for it. I figured it would be more convenient for everyone involved to have all the buyers come through in one short period of time instead of bringing each one through individually at different times. Not to mention that the buyers very well could see each other there knowing that they’re going to have to make their top offer to try and out bid the others.
More Competition = Higher Demand
Higher Demand = Higher Profits
I’m not sure about the open house idea. I’m sure there are some unwritten rules or etiquette. That may be considered rude or they may just think you are playing games. You may want to check with some other people that bird dog. Ideally, you should have a list of buyers and the type of properties they want. Then you just contact the people that are interested in the type of property you found.
I guess I’ll just stick with only contacting one buyer per deal for occupied properties. So, I don’t have to try and bring multiple buyers through a property at different times, but when I have a vacant property I’ll call multiple buyers since it’s more conventient.
Here’s a thought for you… If you can get the Home Owner to agree, hold an open bid auction at the house. Have an open house for 2-3 hours, get the H. O. out of the house and let the fun begin.
Advertise it locally via bulletin boards, newspaper and CraigsList.com and specify that interested buyers must provide proof of funds immediately upon winning the bid. Depending on the area, this will create a bidding frenzy, if the price starts low enough (70% LTV or less). Be sure that the starting bid includes your expected fee.
Make a form and place it on a clipboard that stays within your site the entire time. Have the bidders write their complete contact info next to their bid. Once the open house is complete, call everyone of the bidders on the list and inform them of the highest bid to see if they wish to up their bid.
Once the highest bid is established, meet them the next day to finalize he paperwork. If they fall through, you have a second, third, etc. interested bidder to fall back on.
Once you have your paperwork solidified, if you are really motivated, you can contact each of the bidders to inform them that they were outbid and that you will contact them again when another property is available.
Beware: this type of auction may create traffic problems for the neighbors, if you marketed it properly!
Good luck!