Wholesaling Houses and Making Offers

You remember my last post about getting busy in your wholesaling business? Well I have decided to take my own and advice and am starting to see some great results. Over the last couple of days I have contracted 3 properties and I know 1 of them is sold for sure! I have several of my buyers running through the houses over the next couple of days so we will see what comes of it! I am feeling pretty good about it myself.

I will tell you why the one I contracted yesterday was so cool. I think I talked about this in my last post but I will give you a quick recap. When I first got this lead from my virtual assistant it did not look like a deal at all. In fact it looked like a complete waste of time! The seller is saying stuff like they want the tax assessment for the house, which in this case is 219K.

So anyway in my attempt to practice what I preach I called them and the seller was a total jerk over the phone! Acting very unmotivated and saying they want as much as they can get for it and they have all the investors over town looking at this house. So reluctantly I set the appointment and went out to see the place. They owe 90K on the house so they do have the capacity to go WAY down from their asking price. Let this be a lesson to you-if the seller has the capacity to go down on the price you should go out to the house.

So I chat with the seller and through building rapport I find out that he understands he is going to have the sell the house at a discount in order to get it moved. How much of a discount at the time I did not know. He gave me some what of an idea by telling me that he believed the house needs 50K in work. Remember all of this I would not have found out if I had not gone out and spoke to the seller.

After the initial meeting I told him that I would go back and figure my numbers and come back to him with an offer. Now, in my opinion this could have been handled better. I should have tried to figure out his bottom line then and there but I chickened out! Yes it does happen ..lol

This was a difficult one because I was not sure which one of my buyers this deal was going to fit. I called a couple of them up and tried to feel them out a little. I told them about he neighborhood and the repairs and what I thought the ARV (after repaired value) was. From talking to a lot of them I found that maybe 125K would be  a  good number for them to buy at. So I figured if I want to make 10K I am going to have to get it for 115K, right?

Already I am thinking that this is WAY to low and there is NO WAY the seller is going to accept this price. Again, this is another mistake on my end. In order to excel in this business you need to have your mind right. You need to believe for yourself that your offer is the BEST possible offer that the seller can accept. Also, that you cannot possibly offer anymore without it being extremely tight on the deal and the fact that anymore money and you will have to pass on the deal.

How do you communicate this? You do this with your face. You heard me right, your FACE. It is almost like playing poker. They have to be able to look at your face and see that you can offer what you offered without flinching.

How do you know what the seller is really thinking when you offer your price? You look at the seller’s face and their body language. It speaks volumes more than what they may actually say to you.

Ok,  so anyway in this particular instance I knew I needed to be at the minimum of 115K to make what I needed. I called up the seller yesterday and set another appointment for that day and went out there and offered 105K which means the seller would only net 15K from this entire deal with a house that has a tax assessment of 219K…lol…

He answered me back with “I was hoping for 125K but we really need to sell this house so we have a deal.” I actually was a little shocked!  The seller took the deal! So we wrote up the contract and I know I have a buyer for at least 117K. I am hoping to pull 12K on this one. I don’t see why this would not be possible. I will definitely keep you updated on that.

Hopefully this mini case study is a motivation to you to get out there and make offers on houses. Remember, if the seller has the capacity to go down, you should get off your butt and GO!  I know I will!

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  • Pete

    Alex, here’s a saying I’ve applied to my business….
    Building rapport and finding out what the seller needs is tough to do over the phone. So if they have equity, we go see them.

    See ya!