Stay in CONTROL of your Wholesale Deal!
A good real estate wholesaler stays in control of their real estate deal at all times. Go to any real estate investor websites and they will be teaching the same need for control of a deal. From negotiations to sale it is very important that you stay in the driver’s seat. What do I mean by this? Let’s say that you have a real estate wholesale deal that you have negotiated and are ready to go meet with the seller and get the contracts signed. You made an appointment to meet with them in 2 days to get everything signed. Your anxious to get a sale on it so you send the information out to your wholesale buyers list real quick. You go to your appointment and find out that the seller had already signed a contract with someone an hour earlier because they offered them $1,000 more than you did. Then you come to find out the person they just signed the contract with was on your wholesale buyers list. The seller had NO commitment with you, You blasted the real estate info to your buyers list before you had control or had the property under contract… BIG NO NO! Not everyone is ethical and YES there are other wholesalers who will kick you to the curb to get a deal done! Trust me I have come across a few and learned this the hard way.
STAY IN CONTROL!
Stay in CONTROL when negotiating with the seller.
When your negotiating the price with the seller NEVER be the first one to state a price. There a saying in wholesaling ” He who bids first looses”. ALWAYS let the seller give you the amount they are looking to get for the property first and then start negotiating from there. Ex. Let’s say you blurt out ” Would you take $60,000″ and in the seller’s mind they were thinking $50,000 you just increased your bid by $10,000 without even knowing what their bottom line was… Feel stupid? He who bids first loses!
As soon as you negotiate and come to an agreement on a price with the seller go put that thing under contract! Don’t wait, especially if it’s a good deal. That seller now knows what they can get for their property because you just informed them of everything. What is going to stop them from putting an add on craigslist to try to get $5,000 more than your offer while they are waiting for you to come meet them with the contract? A good practice is to take a real estate contract with you when meeting with the seller. This way you can negotiate and lock it up at the same time.
DO NOT market your wholesale property until you have CONTROL.
Here is the BIGGEST NO NO! Do Not market a wholesale property until you have CONTROL! What I mean by control is under contract. Once you have a property under contract there are no more loop holes for some one to go through and cut you out. You have made the seller aware of the fact that your contract is a LEGAL and BINDING contract between you and them. If it is a really good deal I suggest that you put the contract in an escrow account at a Title Company in an effort to cloud the title. If a property has a clouded title than no one can legally put out another contract on that property. I don’t always do this. I only take the time to do this if the deal is really good and I stand to make a nice profit. If it’s an OK deal and not a GREAT deal I rarely bother clouding the title.
If you feel that you MUST… ABSOLUTELY have to market that property before you get it under contract than I suggest that you X out the address when you blast it. (Ex. 2xx Main St.) This way buyers have to call you to get the address. Just let these calls go to voice mail and call them back once you get the property under contract.
One more thing… NEVER let a buyer go to the property without you if it is owner occupied. I know your thinking ” Daaa I wouldn’t do that” . You would be surprised how many wholesalers send their buyers to a property without them because they just don’t have the time to go. I guarantee you that buyer will be all over your seller asking all kinds of questions.
A Good wholesaler stays in CONTROL of their deals at all times. These little mistakes can cost you your profit and rob you of all of the time and effort you have put into making that deal happen.
Once you start to build a relationship with your buyers and area wholesalers you will see that the REI world in your area is like a big circle and everyone knows everyone. Other area wholesalers generally have the same buyers on their list as you do and the buyers generally know all of the wholesalers. That does NOT mean however that you let your guard down. Like my momma always said… MONEY MAKES PEOPLE ACT FUNNY!
Filed Under: assigning real estate • assignment contract • Assignments • realestate wholesaling • Uncategorized • wholesale real estate • Wholesaling properties
That is true. This was very helpful. Thank You
DM Williams