Guest Post By Preston Ely … a wholesaler out of Tampa, FL who is one of the top 5 "gurus" that we recommend over here at The REI Brain. His free newsletter is full of great tips… and his ebook is the best $50 for people who want to learn wholesaling.
So I’m sitting at Starbucks this week just typing away (not very fast, mind you; I only use two fingers total) when my piece of crap iphone that doesn’t work ever starts ringing…
Intruder: "Yo! Preston! It’s me, Dave – your favorite student! I just flipped a house for a $15,000 assignment fee. I happened to be in your neighborhood so I thought I’d call you and say ‘thank you for making me rich’ for the thousandth time in my life!"
Me: "I’m at Starbucks on Howard Ave. Stop on by and tell me about it."
I love it when my students close deals because I learn something new every single time. In this particular case it was more of a reminder than anything though. And I thought it might be helpful to you to pass it along, just in case you’re not doing this already.
First of all , the seller in this case was a landlord who had received a postcard from Dave literally more than a year ago . This doesn’t surprise Dave at all because at the top of all his postcards he puts the words "Save This Card!" Apparently he’s accustomed to people doing what he tells them to do. I dig that about Dave.
REI Brain Tip : Use this tip when creating your real estate postcards. But in bold letters at the top "Save This Card!" like Dave did… that’ll increase the chances of people holding onto your cards and calling you in the future.
Dave uses an answering service that literally fills out his leads sheets for him. So when he calls a seller back, he already has the comps in front of him and can negotiate on the phone if the situation warrants it.
Question You’re Asking Yourself:
"When does the situation warrant it?"
Answer I’m Answering Yourself:
When the seller’s asking price is relatively close to something you’d be willing to offer based on the ARV you’ve estimated from the comps.
If the seller’s asking price is way off from where you want to be , simply fax them an offer . That way when they start cursing, you don’t have to actually hear it. Then maybe fax them another offer once every 30 days thereafter , and reduce the offer amount every single time (put a line through the offer price and write a new lower one in place of it and initial it. We don’t do that latter part, but it just came to me, and frankly, it sounds like a genius idea. I’ll test it and get back to you ).
Back to the story…
Dave pulls the comps in the MLS (cuz he’s a realtor for some weird reason) and determines the value is around $228,000. He calls the seller and asks how much he wants. The seller says "$80,000 ."
When Dave "comes to," he tells the seller he’ll call him back. He then has an imaginary conversation with his non-existent "business partner".
Locking In The Wholesale Deal…
He calls the seller back and lets him know he spoke to his business partner (he leaves out the "imaginary" part) who has told him they can only do $70,000, but (and here’s the moral of the story)…
We will pay all your closing costs.
Now, here’s the thing with closing costs – people think they’re way more than they actually are . The seller probably felt that considering we were paying all closing costs, he was still getting close to his asking price. In reality, we’re talking about maybe a thousand bucks or so.
So he said "ok."
Dave marketed the deal at $85,000 net ( "net" meaning – the new buyer is responsible for all closing costs), and, in his words, his "phone rang off the hook like it was 2006." LOL I loved 2006. Didn’t you? Selling houses was like passing out free bricks of gold to people who loooooove bricks of gold a lot. I’m not sure who that is.
Dave could have made more money on that deal. But Dave doesn’t care. Because now a lot of buyers in our market consider Dave a genuine wholesaler with really good deals (unlike all the other wanna bes). And they’ll pay special attention to any new properties he gets in. The value of this can not be overstated.
I highly suggest you aspire to be like Dave. He has the right stuff. How could he not, with a coach like me??? : – )
Make it happen.
- Preston Ely
In True Preston Style…
Real Estate Investing Coach/Rockstar/Assassin R. Preston Ely publishes the critically acclaimed weekly ezine The Flip Factor . If you’re ready to jump-start your life, quit your boring job, make a bajillion dollars, and have more fun and freedom, get your FREE 7 Day Mini-Course RIGHT NOW at learntowholesale.com!