you a fast sale in your market and how much profit you need to make on a deal to make the process work for you. Building Your Budget: Time and again, I see wholesalers try- ing to do deals with only a few hundred dollars “cushion” built in for them- selves. I won’t say not to do this, but I will say it is vitally important to your wholesale business success that your deals generate enough money to pay for your time and infrastructure. NO. 3 Persuasive, Practical Negotiation Tactics Distressed sellers reach out for an emotion-based reason when they want to sell quickly. Some wholesalers call this their “internal pain point.” I believe it is more of an opportunity to craft a solution to solve that pain. Breaking Down the Language Barrier: You will hear a lot of real estate in- vestors talk about “rapport” with sellers. Essentially, this means that you must get the seller to like and trust you because you have a sympathetic ear and a solu- tion to their problem. Pro Tip: Use every viable lead you get early in the process to practice listening to sellers and building rapport. NO. 4 An Eye for Estimates Ballpark renovation costs by asking questions about the home’s condition during your initial phone call. Later, you can complete a spreadsheet to cal- culate costs in detail. PRO TIP: Work with an experienced contractor or investor to make sure your estimates are on target. Building Your Budget: Do not lowball repair estimates! Any
investor who does due diligence on your deals will quickly identify you as a wholesaler whose numbers cannot be trusted if you do. NO. 5 A Formal Valuation Equation You can establish property value in multiple ways, but be consistent in both your methods and sources of informa- tion. For example, you might determine the value of a property by finding sim- ilar homes that recently sold (comps) and dividing the sales price by the square footage to establish a square-foot sales price. Then, use that number to establish a potential after-repair value (ARV) for your property.
NO. 6 Motivated Sellers When you are starting out, your web- site may not generate the volume of leads you need. You may need to supplement with other options, including:
POSTCARDS
BANDIT SIGNS
EMAIL BLASTS
Building Your Budget: If you have the funds, I recommend mailing postcards to targeted lists, such as homeowners with high equity. Save time by outsourcing the entire list-pur- chasing and -mailing process. The best lower-budget option for finding moti- vated sellers (and investors to purchase your deals) is probably bandit signs. These signs may be professionally print- ed or hand-lettered and should simply read “We Buy Houses” with your phone number or website. NO. 7 A Constantly Expanding List of Potential Buyers (Your “Investor List”) Constantly build your buyers list and store it in the CRM system from Step 1. Find real estate agents and brokers who work with cash buyers already and telling them about your potential deals. They should be part of the list you con- tact whenever you have a truly valuable wholesale deal.
POTENTIAL RESOURCES FOR VALUES & COMPS:
Breaking Down the Language Barrier: Wholesalers use comparable proper- ties, called “comps,” to give their buyers an idea of how much they might sell a property for after repairs. Building Your Budget: When evaluating a deal, keep your overall wholesaling process in mind. Most wholesalers plan to make offers that will likely be around 70 percent of the ARV minus the cost of the needed repairs.
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Brad Chandler is the CEO of Express Homebuyers and president of Brad Chandler Coaching. Learn more by emailing brad@bradchandler.com or
texting REPAIR to 855-999-1616 for a copy of the repair estimation worksheet he uses on his wholesale deals.
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