I’m real. I like to “keep it one hunnit” whether people like it or not, and sometimes in this life-and business-you’re the bug, and sometimes you’re the windshield. Well, in this case, it looks like I may be the bug.
Here are the details of a deal I currently have under contract…
2 Bedroom/1 Bath
704 Sq. Ft. Living Area
~2400 Sq. Ft. Lot
Market Rent: $800-$850/mo.
My Contract Price: $35,000
My Asking Price(to Buyers): $42,500 (originally)
Now, on paper, this looks like a sweet deal for a Buy and Hold investor. It’s in a lower income neighborhood (what some investors might call a C Neighborhood), but this neighborhood is GREAT for rentals. I have a buyer who loves to buy in this area, but for some reason they’re remaining silent on this one. Maybe it’s because I made a $15k assignment on the last deal they bought from me. If that’s the case, consider them whacked. Which brings us to…
Train your Buyers. As a wholesaler, don’t do business with any buyer who doesn’t do business your way. In essence: control your deal. Whenever possible control what contract is used, control what title company is used, and always ALWAYS take an Earnest Money Deposit. Now, Caveat: There is some flexibility to this.
For example, if the deal is solid and you need to use a seller/buyer’s title company to make it happen, you can oblige. Just call the title company beforehand and instruct them on how you want the deal to go down. If they have no clue what you’re talking about, and look at you like a monkey fucking a coconut, then suggest another title company.
Be like a reed in the wind, young grasshopper. Bend, but do not break.
Look at fucking properties before you buy them. Yes, I know, I fucked up. I made an offer on this property off of that fancy Zillow thing all the kids are talking about these days, and I didn’t do all of my homework. I thought I knew my numbers-and the neighborhood-well enough to make a “sight unseen” offer.
Well, I couldn’t have been more wrong. I got to the property today to do my first in-person walkthrough, and it was a disaster. The foundation had a bigger belly than Roseann Barr, and the roof had more holes in it than Bill Clinton’s alibi. To make matters worse, I put up $1,000 Earnest Money Deposit because this was an offer on a listed property.
Now, I’m not saying that you have to look at every shithole(I know that’s a sensitive term these days) property yourself, but you, or your team, should lay your eyes on it. Pictures should be taken and, if you’re a MOB member, you should have one of those handy dandy Rehab Estimator sheets filled out for each property. There is nothing worse than making an uneducated offer on a property, and losing a deal. Or, even worse, locking up a useless property that just sits in your inventory and results in $0 profit. Sometimes you can pull a check out of your ass at the eleventh hour and make some profit, but that’s all dependent on…
Mind Your Buyers. “What the hell does that mean, Jim?” Well, I’ll tell you. I’m a firm believer in the saying “Find the deal and the buyers will come”. However, what I don’t believe in, is the saying “1 or 2 solid Buyers can run your business”. It just doesn’t work.
A lot of the tips and training given in this business are seller-driven, and there is nothing wrong with that. But, if having more than 1 or 2 buyers can make me $2500 instead of $0, then COUNT. ME. IN.
I’m not saying you should be one of those douches that pulls other people’s deals off of Craigslist and Facebook, tacks on a $1000 fee, and calls them their own. That’s called “daisy chaining”, and daisy chaining is bad. Mmmmkay?
Lock your own deals up, but when you have them, market them in any way possible to pick up buyers. When they call on your properties, pre-screen them and make sure they’re a CREDIBLE cash buyer. (There’s training on how to do that in the MOB). Once you’ve decided they are really buying deals with cash and closing fast, add them to your list. Having a wide variety of bona fide cash buyers can do nothing but improve your business.
So, next time you have a deal you’re struggling to sell, you may want to take a long, hard look at your buyers list. Having a number of strong investor buyers, and even a sprinkling of some cash retail buyers will definitely help your cause. It might even make sense for you to network with some RealTURDS who have strong investor-buyer contacts. Who knows, leveraging their contact lists, and expanding your own, may turn a turd into tanzanite. Like the old saying goes: “There’s an ass for every seat!”