Have done over 10 deals but we hit a roadblock!

Thats exactly how I started off in wholesaling as well. I made small profits and thought I was missing something. Trust me your on the path, quitting now would be regretful to say the least. You have done all the heavy lifting. I'm proud of how many deals you have done--very impressive!

Let me give you 2 quick techniques (something that I have perfected) that will boost your wholesale profits immediately.

1.) Profit on the backside of your deals--After the deal is accepted and you get a buyer to say yes for a $1000 profit--then go back to the seller and tell them the property didn't pass inspection and you need a $3500 discount (I do this verbally so if I can't get the reduction I move forward anyway and make the $1000) This technique works 50%-75% of the time. Then you pocket the extra $3500. Then you would net $4500!!!

2.) Get a lower offer accepted thru this negotiating technique--When negotiating with the seller and you think they are at the lowest possible price say--"I really want to close this deal and get this property off your back, we are so close, but I just can't take the chance of losing money with your price. We both know the amount of work this property needs. The best I can do is $____" Then drop the last price by $3500. Say it exactly like I just did word for word!! Don't change a thing! What I have found is $3500 is the magic number. People don't want to go more than $3500 most of the time but they will do $3500. That extra $3500 in your pocket will add up bigtime!

Remember--making more money is all about you getting a lower price. Work those 2 techniques to perfection and you will start making more money.

Matt Larson

Get it done!

P.S.--Dominic, you are so close to $20,000 per month its SCARY!

Expand your buyers list for sure, buy them cheaper, make more offers, move into higher priced houses. All the competition is concentrated in cheap first time home owner stuff. Good for buy and holds, not so good for wholesaling. We've made over $130,000 wholesaling this year alone! Still have 4 months left in the year!! WE have met private money lenders while wholesaling, doing our fix/flips and doing L/Os. Doing business and providing deals is how we have met so many REAL people.

I suggest at this point you spend your time, money and efforts getting out into the community where you are investing. Find the high volume buyers. Find other wholesalers. Network with the REAL movers and shakers. Meet them face to face. Offer on at least two REOs a day plus what you do with unlisted sellers. You guys know the basics, now you have to build your own team from REAL people that are TRULY buying and selling real estate. How many more seminars, cheer leading sessions, how tos do you need?

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

from Matt, I'm sure if you follow it Dominic you'll do well. I'll also be keeping that in my pocket of tricks.

Thx will do that myself.

Matt has told me several times before that I should wholesale enough deals to use that profit to purchase one to keep.

That $20k per month might allow you to purchase a house each month if you find the right deal (and lender if needed).

If you notice from Matt's example above, he's not making it personal. The house isn't letting him purchase it for $x.

Thanks Matt for the advice! I didn't even think of that. I'll let you all know how it works out

And Michael I really want to move into higher priced homes, but none of the buyers we (currently) have want those deals. I guess you're right, I just have to find better buyers!

Our main problem with wholesaling is finding these awesome deals that match our buyers' criteria to the T or even better, and they still turn them down, then we're scrambling for 14 days to make even $500 so we make at least something on it. And we KNOW these buyers have cash. Any ideas?

Do the buyers say why they're not interested in that particular house?

Are these "buyers" wholesalers in disguise?

Do the houses you get locked up fit the criteria of multiple buyers?- I think Matt sends the deal out via e-mail (or possibly text now) saying first responder wins the deal.

There 2 things that solve every problem in wholesaling. And only 2.

1.) More Buyers

2.) More Offers

If you are having trouble or want to make more money then it has to be one of those 2 things.

About 1x every quarter I go after new blood to add to my buyers list. Really that is not often enough. People you sell to, try to make their profits bigger by making yours smaller. Yesterday was wholesaling a property, with over $53k in equity and the birddog/wholesaler wanted to know if the price is carved in stone....????

You need a formula. You need to fill your pipeline with buyers and lenders daily, take an hour a day. Google search them or network, whatever it takes. Remember end users will buy homes too, even if it needs fixing up!!

Here is my basic formula, buy 21 properties a month, keep 6 and sell 15 (this includes any LTO or Owner finance deals) Basically I wholesale 3, keep 1 property for rental income. Use OPM. Reverse the deal....get the buyer/investor to put up your earnest money....assign the contract. If one says no, one will say yes. DO NOT LIMIT YOURSELF!

Question are you paying too much for the properties? Is so that is why you are making a G or less. If you get them right, then you are getting hosed! Believe me when you do not send them anything and their buddy tells them about the 2-3 deals they got from you and how much they made....the hoser's call back and I tell them they were benched for hosing me. Now if they want back in....here is the price of admission.....

I learned early on, if I let them dictate to me how much I am going to make on a deal....I will get $500-$1200 per deal. I tell them how much something costs. I tell my buyers EVERYTHING, the good, the bad the ugly. Take pics of the ugly along with the good. Nothing will irritate anyone faster than only getting the TV ready pics. By you telling them how much- I improved my income in 1 week to within $220 of what the previous 3 months were total. Its your deal, you control it.

Had a group of out of state investors email me looking for properties in their backyard!! They are 1/2 way across the country from me!!! They offered 25% referral fee...Another investor said he will pay me 1% of the purchase price as an assignment fee and his ceiling is $150k...told him that is Rookie Birddog change, I am a pro, asked some questions, told him if I get some great deals that fit his parameters I will send them. I tell don't ask. When I send them a property it will state a price with assignment and a price if its a double close. If I am only after a locate fee,it takes $2000-$3000 for that. Either way I lay the deal out as it is now and what his side looks like. If it makes sense they will buy the deal. Key is do not get greedy and do not make more than them.

PRIVATE MONEY: Again on LinkedIn, or Bing, Google search for them. Look for local 'MEETUP' groups in your area for private money. Ask, Professionals if they know of anyone....there are some SEC laws about this so consult your atty first. Basically, you need to deal with Lenders first in your area build your rep and then you will start getting calls from other lenders and investors.

Only you can decide what your time is worth, the more investors on your buyers list, the more bids you will get..never be afraid to be the first to walk away from the table when negotiating. I am sure you figured this out but some may be taking advantage of you because of your age.....be a pro, talk with confidence and TELL them do not ask.

Whatever your efforts are now....10x them and watch what happens.

By wholesaling houses you should be getting 5-10% of the ARV which would be $5K-$10K per deal.
With bird dogging the finder's fee is equal to $500-$1K per deal.
Are you sure you're wholesaling (being the dealer in the transaction)? Don't sell yourself short, Dominic.

What do you mean when you say pocket the money? Is the seller just handing you cash after they get it from your buyer? Or do you change up the number on the assignment of contract and keep your buyers price the same and your fee 3,500 more.

.........................................
1.) Profit on the backside of your deals--After the deal is accepted and you get a buyer to say yes for a $1000 profit--then go back to the seller and tell them the property didn't pass inspection and you need a $3500 discount (I do this verbally so if I can't get the reduction I move forward anyway and make the $1000) This technique works 50%-75% of the time. Then you pocket the extra $3500. Then you would net $4500!!!

He means if you have a property locked up for $53,500 and a buyer wants to buy it from you for $54,500 then you go back to the seller and say it didn't pass inspection, then re-offer $50,000. You are still selling it to your end buyer for $54,500 but you bought it even lower. Therefore you are making $4,500 instead of $1,000. Make sense?

I will respond to the other replies later tonight. Thanks everyone though!

Is a great thread a LOT of nuggets of wisdom and experience. Thanks Dom for your question!

Thanks for the great advice Matt, Michael and K. Michael. You guys are great sources of knowledge and advice. I'm currently trying to help an investor sell a few of his rental properties for an assignment fee and I'm learning more and more everyday.

Maybe I am just dense or something, but you are saying to tell them the house did not pass inspection, which is probably a lie, or not. But how dose this lead to a reduction in the price of the house? And is it legal or even moral? I will be waiting for an answer. Gerald C.

One quick question... What prevents the buyer from ditching us and contacting the seller himself and cutting us out of the deal. PS, Not tryin to be negative, just thorough!!!!!

Nothing wrong with negotiating. I have told seller"s we can't sell the house for what we had first estimated or our costs of rehab were higher than expected. You are just making a verbal request for a price reduction. The seller can say no and you stick to the original offer. This is business.

What prevents you from being cut out of the deal is YOU have the property under contract. YOU control the deal. Handle your buyer in a way that he knows if he does not buy, one of your other buyers will. Either he wants the deal or not, it is no big deal, you will just pass it on to another buyer and he/she can look at your next deal. Never look or sound desperate for a buyer (even though you may be). Once again, this is business, you must know how to present yourself and how to work with people on a professional level.

Good Luck,

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Micheal, Thanx for the info, I am really new, but after I wrote the post, your answer came to my mind. I am glad that all this info seems to be sticking. I AM IN CONTROL!!!! I AM THE ONE CONTROLLING THE DEAL. Again Thanx and God Bless. I love being able to come up with a question, and so many good people come to help. Later

it can be that the cost of repairs is higher than originally estimated; many times sellers will not tell you about repairs needed, and then you find out about them when your buyer gets his inspection done. Then your buyer negotiates the price with you, cutting your profit! your buyer wins and the seller wins, and like Dom stated, him and his partner only get $500 or half of that from the deal! So, if his partner goes back to the seller and re-negotiates the price, then everyone wins; the seller still sells his house, buyer gets a house, and wholesaler(s) make a profit...

Also, after you agree on a price, you can ask motivated seller if he is willing to reduce price by $500 if you can close in 14 or 21 days instead of 30 days - it does work!

Just a quick thought. Have you ever considered looking at properties that are going at a higher dollar amount. I am sure that you can wholesale properties consistently at 60k but only make 2500. Where if you wholesale properties that are at 200k, you should be able to pull in 10k. There is an investor in San Diego that does 10k per deal, but keep in mind, California home values are different than most places, but think about moving up the chain to richer properties and your profits should move up right along with that.
Jeremy

I have an acknowledgement clause in the contract I am going to be using, it states that the original seller cannot sell said property to anyone that I procure to the sale, without getting my assignment fee of $______ whatever it may be. Then before I show it to an assignee Im going to have them sign an assignment agreement before I show them, that way it lets them know that you have a way to prevent that kind of tactic. Plus if it happens you have documented it. You attach it all to your purchase agreement as an addendum. Most people like Dean said are going to be glad to give you your fee because you are bringing them such a great deal to begin with. I was a realtor for a while and most listing contracts have that same type of clause in them. Ask a realtor in your area if you could look at a copy of their listing agreements and purchase agreements, they should have no problem with that. It will help to understand alot.