Looking for advise. I get a lot of leads that are not your bread and butter type deals. Example:
seller has house worth 100k but owes 70k on it minus 5k and repairs and 5k assignment fee. Offer price 60k
seller does not want to come up with 10k at closing so the deal is stalled. Question: what are some strategies that I could use in these type of situations? Sorry if this sounds basic but just started the business about 3 months ago.
First congratulations on getting into the business. I’m just going to give me thoughts as they hit me. In this example where seller owes 70k, you offering 60k and asking them to come up with 10k down the road really leaves a on of leads on the table that won’t get done. It really pays to have some backup offers or different options for the seller to consider. Maybe instead of trying to force feed them a cash deal, it might be possible that a Subject To deal might work better. Most important thing is understanding the seller’s situation and crafting a deal that fits that situation. In my opinion that means having knowledge of more deal type other than just cash deals. My advice is to turn over a higher ratio of leads to deals to go to the library and learn more about the other creative deals. Then after your learned it, go to your local monthly investor meeting. Figure out who is doing the creative deals that you’ve read about in the library. Offer that investor something to team up with them and barter. My 0.02. Best of luck.
Thank you for your response. I thought about the subject to but I could not find out how to overcome due on sale clause. Any suggestions?
Not everybody is going to give you the deal that you want. If the deal isn’t going to work, move on and keep hunting.
No seller is going to accept an offer that requires them to come out of pocket at closing. You’re wasting your time with those offers. Find a homeowner who is motivated by debt relief and where the numbers on the property are reasonable.
Lay it out on the line. Don’t hide from it but at the same time don’t make a big fuss about it either. Say something like, “I need to tell you that legally the bank has the right to call the loan due but frankly there’s very little chance of them doing so because I fully intend to make your payments. That’s all the bank wants.”
Also remind them that banks are currently holding unprecedented inventories of unwanted foreclosed houses and the last thing in the world they’ll want to do is take back a house where the payments are being made on time. Even in the best of times banks simply don’t repossess houses with payments being made on time.
Also if sub-to is not your thing or you don’t know how to do them, don’t forget you can assign subject-to deals to investors just like wholesale deals.
I want to piggy-back on to this question a little.
I get a ton of leads that I maybe could do something with…but literally just don’t have the time to mess with. I pretty much focus on wholesale deals only. I get a lot of deals that are more appropriate for short sales, sub-2 or seller financing/wrap mortgages.
Does anyone here pick up deals no matter where they are and just pay referral fees? I work full time and the time consuming deals just don’t work for me…but, I hate to just ignore the deals. The flip-side of this coin is losing control of the deal. If I pass off a deal, typically I wouldn’t get paid unless the deal closes…but how will I know if/when the deal closes to ensure I am getting paid my referral fee?
I pass off some of these deals now…but I am not kept in the loop on them, so I have no idea if they go through or not. I have no idea if I am supposed to be getting a check or not…the problem is, the leads go to someone I know (not well, but know) through another relationship. I don’t want to offend anyone or be a pain in the rear…I would rather just not do business with family/friends (or family/friends of friends).
So, is there someone here that picks up the above types of deals nationally (and/or locally to Houston) that would be willing to talk a little about what I can do with these leads?
Chris
Chris,
There is no substitute for time. This business does take time. Too many people want something for nothing. I mean, if you want to know how things are going with a lead, you have to spend time being involved. There is another way you can do it which is what I do. It really is in how your assignment paperwork is written up. Mine is written such that once the assignment is completed, I am held harmless for anything from that point onward. Therefore the investor has to do all their work ahead of time. But to tell you the truth I don’t do a lot of assignments anymore as I have more of a flavor for the bigger dollars and not merely getting assignment money. Therefore I spend the necessary time working the deal. So I totally think you can turn over a higher ratio of your leads to money in your pocket, the question is are you willing to spend the time?
Thanks for the response, chunk. Perhaps I wasn’t clear with what I was asking…
I WANT to spend the time…BUT, I do NOT have the time…
I work a regular full time job, which I happen to love and wouldn’t consider leaving at this point in time. I do wholesale deals on the side. My lead generation is relatively effective for the time and money I spend on it. It seems like about 1 in 5 leads are actually wholesale deals. The other 4 leads may be something, but I don’t have the time to work anything but wholesale deals.
All I am looking for is someone to unload my deals to (someone active, proven & successful in their niche) to, so that the lead doesn’t go to waste. I would rather make $1000 on a deal than just call the lead and tell them I can’t help them.
In short, I only want to do wholesale deals. The leads I get are about 1:5 wholesale deals:other. So, if I get 25 leads a month, only 5 of them are deals I am interested. The other 20 deals are either short sales, sub-2, wrap mortgages, etc. I don’t want to do those. I am looking for someone that does work those types of deals and would like the leads. In return, pay me a referral fee for the lead if it closes…
Exactly, the numbers either have to work or it’s not a deal. It’s something that can’t be forced. If a person is constantly marketing, the next possible deal with be knocking.
some deals were some deals don’t, that’s part of the game. your job as a wholesaler is to find a good lead push out the bad leads. to worry about that leads, let somebody else handle the bad leads. One way of getting in good with realtors is sending them in about five of your leads that you know are not wholesale deals. They will love you for this, and will be open to work with you later on by giving you access to the MLS. Hint, hint*** :terminator