I finally have got a sales agreement from working with my RE lawyer…and now I am ready to start wholesaling properties. I am trying to go over the entire process, and I am having some difficulties.
When you begin talking with a home owner, and you are planning on wholesaling the property, what do you discuss, financially with them? Do you say, well we could short sale this property or subject to this property, or do you tell them that you are planning on taking the property off of their hands, selling it to an investor? This is something I dont understand. Thanks for any input.
Don’t take this the wrong way, but most starting investors (including me when I was starting) have this problem. I personally think it is due to the fact that you do not have clear idea of your exit strategies so you are not sure what to tell them.
What type of properties are you looking for? and who do you plan to wholesale them to exactly? What do your buyers want?
The first thing you need to do is assess the homeowner’s situation by finding out what they NEED. Find out what their situation is first- are they behind in payments? How soon do they need to sell? Why are they selling? Ask a lot of questions, and do a lot of listening. Then, once you find out what their needs are, you can make an offer that (hopefully) works for the both of you.
I found it really helpful when I was just getting started to whip out the classifieds and just start cold calling homeowners. It was intimidating at first, I won’t lie, but it is very good practice, and will give you the confidence you need to move forward. You have to be willing to face your fears and jump in at some point. The fear doesn’t ever go away until you start taking action.
I honestly do not have any exit strategies right now, mainly because I dont know what that is supposed to mean. I am mainly looking for single family homes, 2-4 bedroom homes with minor/major upgrades/fixes and I plan on wholesaling the properties to basically any investor who will want to fix the properties up and resell.
Do homeowners in distress really need anything else other than getting rid of their property? Basically, how do you know what kind of solution you can give them? From experience I guess? This is why I want to start wholesaling because I thought I could leave the financial part up to the other buyer, but Im sure the homeowner wants some type of understanding of what is going to happen.
I dont know how to analyze their answers and give them the best options possible. I could say one option that they like, but there could be other options, much more beneficial options that I might not know. Its fustrating because I know that when I start talking to people in person, they will eventually ask a question that I wont have an answer to…and that question might make or break the possible deal :banghead
Thanks again for your responses. :beer
You might try bird dogging your leads to another investor- this way you can just collect the info. and pass it along. Learn as you earn. You also have these forums to come to to ask questions once you have gathered some preliminary information.
There is a ton of info. available online that is free. Read all that you can and in the meantime take baby steps toward getting deals. Start networking, going to rei meetings, take a successful investor out to lunch. Take action every day- do something that gets you out of your comfort zone. That is how you grow.
If someone asks you something you don’t know the answer to- tell them so. Tell them you will get back to them once you find out. Fake it til you make it. I don’t suggest going into this being ignorant, but if you are waiting until the time when everything is clear to you and you think you have all of the answers, then chances are you will never get started. It took me several years to do my first deal- I kept waiting and waiting, thinking that once I learned a little more, then I would be ready. Well, that time never came around, so I just jumped in and started swimming.
in your first paragraph you stated your exit strategy = wholesaling
in this case. there are lots of ways to sell & lots of ways to buy .
do some research & take a few courses . then decide what technique you like best & become very good at that one . then add another technique etc. etc. dont spend thousands that you cant afford. the least risky way to start is bird dogging then wholesaling.
once you get over being scared to death, you know a lot more than you think you do, if you’ve read & retained the free info on this site & reiplace.com both are full of free info & good forum boards.
welcome & remember there are no stupid questions; we are here to help. if this is your passion you will start researching & reading & before you know it , i t will be 4 or more hours later. time flies !!!
oh! & when you tell a client “i don’t know, but i’ll find out & get back to you” , Be SURE you do exactly that & in a timely manner.
people appreciate honesty & respect from you. that will get more results than being pushy & shady . :bobble. you don’t have to be the shiniest apple in the barrel ; just be a servant to the client.
ask what they want or need & listen,listen,listen. then gently help
them to focus on their NEEDS.try to meet your need & their need & make it a win - win deal.
SORRY i didn’t start out to write this much. that’s what i mean about passion . OOPS consider me silenced , for now lol :deal ?
exit strategy means what are you intending to do with the property. For entry is buying, your exit is how to sell.
The reason I am asking is because when I was starting out, I was lost too as to what do I ask the home owner. The more I learned the business and knew what I was looking for, the easier it became for me and know what to ask.
Some homeowners will want some cash and they may think their house is worth more than it is to us. Others are willing to just walk away. I usually start by asking them whats going on… most tell me their situation and that helps me determine their reason for selling and if they are motivated. I then ask them what they are asking for the house. Keep in mind that by that time I already know what they owe on the house and I would have determined how much I am willing to offer. If they are asking at or below what I am willing to pay then I will write up the contract. If they are asking above, they have equity, and they are motivated then I will justify my price to them. Justifying the price in itself requires you to understand the cost of selling. If I cannot get my price, then I simply walk away.
Thank you all very much for your time and help. You are greatly appreciated.
Technically, bird dogging is the same thing as wholesaling, except for wholesaling actually takes the property under contract, and bird dogging just lets you notify another investor of the property you have found, correct? If so, bird dogging can allow the other investor that you notify about the property to just take it from there, and not pay you anything, right? Whereas wholesaling you have an assignable agreement so they cannot legally do this to you.
That’s true to a certain sense. That is why you should try birddogging to an investor you somewhat know instead of trying to get started with any random person. You need to find out what kind of property the investor is looking for and should have all the details worked out before you hand over any prospective deal. Have a written agreement between both of you that lays out what the terms are, including your birddogging fee.
I bird dog properties all the time, bird dogging doesn’t have to be for entry level investors only. I am in the process of buying a house sub2 that another experienced investor didn’t want.
For new investors, if you are not good at negotiating deals yet, or if you don’t know the ropes yet, they can bird dog for other investors and make quick $500 or $1000. Bird doggers may not need to do as much work as wholesalers.