Is the Market in a Slump or Do You Just Suck? It happens every year. Your numbers start to decline. Your profits are down. You start to panic. You wonder what’s going wrong. Is this the end of your real estate wholesaling career as you know it?
Let’s review some ideas that will help you determine if you’re actually in a market slump, or if you suck.
What were your numbers like last year at this same time?
If you’ve been keeping the data and analytics on your business [like you SHOULD BE] then you should be able to compare your data year over year and see if there is a pattern of a “slow season”. This can be the first sigh of relief when you discover that it’s normal and customary for May and June to be slow months. If that’s the case, and you can see that through documentation and facts, then this is a good month to go on vacation in the future since you know it’s going to be slow anyway.
Market Conditions – Is the Market in a Slump?
Is there something going on in the real estate market that’s causing chaos? Know you market and know what’s going on in your market, so that if there’s a slump, you’ll know what to attribute this to. A good example is if you’re working a niche market or neighborhood, and theres a crime spree or some tragic event that could affect buying/selling activity.
Are you peers in a slump, also?
If you’re involved in social networking groups or local REIA’s, then you’ll most definitely hear from them if the market is affecting them the same way. You’ll see questions posted like “I’m having a hard time finding deals..is anyone else”? But you’ll see it repeatedly from different people. This indicates a market slump, not necessarily a problem with your business.
Did Than Merrill or some other guru just visit your city?
When that happens, it always weighs down the market. They storm into the city, getting all of the new investors excited about getting into the real estate business. What this means for you is that competition has been created.
When you have increased competition, it means that you’ll have a tougher time landing a deal. All of the newbs are out there offering too much, and landing contracts with sellers. Don’t worry though, these are the best ones to follow up with, since they’ll probably expire without ever closing.
Seller’s Markets are Tougher!
Having been though several cycles of the rise and fall of real estate, I stand by by word when I tell you that it’s harder to get deals in a seller’s market. The sellers are smart and more in tune with what’s going on with the values of houses. They don’t let up on their asking prices. A hot seller’s market calls for a stronger, more determined real estate investor to keep their head above water. This is when putting your game face on really matters.
Your marketing budget is weak
How much are you spending to generate leads? In a hot market, it requires more money (2 -3 times more) to land a deal with a seller! If your marketing budget is weak, then you might feel the pinch.
Your pre-screening game is lame
Just because sellers are calling you doesn’t mean that you know how to handle them properly. You can totally ruin a good deal by having diarrhea of the mouth. There’s such a thing as talking too much and saying the wrong things. If this sounds like you, then download our Guide called “What to Say To Sellers” so you can learn how to talk to these people and become a smooth operator.
Your follow up game is weak
What does your follow up plan look like? Do you stay in close contact with your sellers and follow up until the die or sell the house? If not, then you’re probably losing deals to the competition. Following up with sellers is JUST AS important as a solid marketing campaign to generate the leads.
Those are the most important suck factors that you can use to gauge if the problem with your business is caused by you.
One thing you must remember during slow times. It WILL improve, things WILL get better, and you WILL make money again. If you’re serious about being a real estate wholesaler, then be ready for the market slumps. They’re coming for you, and they will eat some people alive. Don’t let it be you.