A little information. Been out there working it for 3 months now. Here’s the system i’ve put together for myself thus far. Goes a little something like this:
Sellers
Market
Gather Information
Data Entry
Evaluate Deal/Line up Buyers
Offer
If no, follow up in one month
Just wondering what you guys think? I havn’t made any offers yet b/c i’m bird dogging and it seems everyone wants to sell for what they owe (which is frequently the home’s value).
I’m wondering if i should allways make a lowball offer on everything instead of telling people i can’t help them b/c i look for a 25% discount of value. Why am i wasting these? If i threw everyone of these a lowball offer, i’m sure someone would pick it up. If no, then i can follow up with them in a month, see if they accept it then.
What do you guys think?
I appreciate all the help, for the record i’ve built this business mostly with what i’ve learned from you guys on this board. My marketing is working, my site/networking is working, i just have to work on my SKILLS now, which you can ONLY get by jumping in there!
I sent a message to Lamar about this question because I was wondering to and here is what he told me:
Why do you need to make lowball offers? If people are selling for what they owe then you can make them an offer for what they owe and make money via lease option or subject 2. If you don’t want to take over the lease option or sub 2, then you can Wholesale it to another investor. If you do take it over, then you get paid up front via option consideration fee, monthly cashflow over the duration of the term, and you get paid on the back end when your tenant buyer exercises there option to buy. But again if you don’t want to take it over then just wholesale it. Set up the deal and wholesale it. Make sure you put in the contract “Upon Partner’s Approval”. So you’ll have an Exit Strategy. Also, you can talk to your Attorney about this as well. Also, You might want to get it under contract before you spend time evaluating the deal. You could be busy “evaluating the deal and lining up buyers” and another investor comes along and snatches it from underneath you. Then you can’t get a chance to make an offer. Try it in this order:
Market for Buyers (Find out what they’re looking for)
Find Sellers based on what the buyers are looking for
Get the property under contract. Make a Fair offer based on what the buyer would be willing to pay for it. Shoot the deal to your buyer(s). If they dont’ like it then continue to Market the property, but make sure you have an exit strategy. Also during this time you will be evaluating the deal.
You can always renogotiate the contract if necessary. Just get the seller to agree in writing.
Keep Marketing!!!
If you find the seller first, make them a fair offer and look for buyers that fit that criteria. Simultaneously evaluate the deal. Again, you want to have an exit strategy.
My mentor keeps telling me over and over, “You don’t have to get it right, you just have to get it going”. That’s a hard concept to grasp, but once you do you’ll be moving forward in no time.
Here is the system the wholesale system that I recommend
Find buyers
Find houses that meet your buyers needs
Put home under contract, I would recommend using a 10 day inspection clause.
If your buyers like the home then assign it, back-back close it, or buy it.
then get a fee equal or greater than the amount that you stand to lose if your buyer backs out.
If your buyers dont like the home use your escape clause to get out of the deal
Get PAID
I have used this strategy to generate over $200k wholesaling in a very bad market.
I agree with you. I’ve based my Wholesaling business initally off yours.
I should have titles this topic differently. After putting up Bandit Signs, all the sudden i was swamped with 10 calls the first day. So i was rushing to put together a system of dealing with them all. It was my first time ‘getting my feet really wet’ as opposed to getting a call or two a week.
So i figured the best route was to
Gather data
Evaluate deal/call buyers
Make offer
In the simplest terms, although it breaks down more like this
Market for sellers
Gather data
Data entry (software)
Evaluate deal/line up buyers
Make offer
If no, follow up in 1 month (their situation may be critical in a month)
Thanks for the help guys, it’s one planning, it has been a whole new ballgame once leads start coming in. All the sudden i’m knee deep in mud learning the ropes on the fly, trying not to waste leads. This is what it’s all about! Getting it in there and making it happen!
One thing i learned, after getting all these calls, is i need more buyers! Lol.