You should already have your buyers list created. If not, you really need to master the art of being a great marketer. Getting the property under contract to purchase is half the battle. If you can’t find someone to buy the house you wasted your time, money and effort. The most important thing you can do to sell a property fast if you don’t have a buyers list yet is,
Seek out and locate the one or two biggest landlords in your city. There is one is every city. This is the guy that has 100+ rental properties in his portfolio and pays cash for them. If you can’t find him, start talking to people. Ask around as to who the major buyer of rental properties is. I would suggest that you call the president of your local REIA (it could be him).
I would also pull a list of Section 8 landlords in your city(www.gosection8.com). Contact them all by phone, or send a letter and/or email.
When you find him, tell him exactly what you do (wholesaler with property around $.50 on the dollar). Then you ask him what kind of property he looks for. I would suggest to become his new best buddy! He is your GOLDMINE! If you have a relationship with someone like this, not only will you sell just about every property you get under contract, but you can begin to flip other wholesalers’ property as well. Until you’re there, you will need to mass market your properties.
Now, let’s start hitting the internet. It’s quick, easy and effective. There are tons of websites out there that will allow you to list your property for free. The first website you need to list it on is your own.
When listing property on a website, you need to sell it. Use phrases like:
- Tons Of Equity!
- Must Sell in 3 Days!!!
- __% of ARV!!!
- $_______ BELOW TAX ASSESSED VALUE!!!
- STEAL MY HOUSE!!!
- Haunted House
- My Granny Left Me This house, don’t want it
- 109 cats lived here, take it away from me
Make sure your name, phone number and website address is listed in the ad.
Some of the sites you must be posting on.
- Your own site!
- www.rehablist.com (tons of exposure to buyers)
Remain in Control
I often hear… “They offered me my asking price and said they could close in two weeks. I took the property off the market, took down my signs, stopped the newspaper ads and even turned away other buyers. Now three weeks have passed and I cant even get the potential buyer to return my call”.
I have heard similar stories many times. There is a simple rule that we learned the hard way many years ago.
Never take a property off the market without money in hand!
I don’t mean $100 dollars for earnest money. A hundred bucks will not even cover your aggravation. Figure out what it is worth for you to take a property off the market and get at least that much earnest money. If I have a $1,000 monthly payment then I would never accept less than $1,000 as earnest money. At least, if the deal goes bad, I will cover a mortgage payment.
Get as much earnest money as you possibly can. Are they serious about buying the property? If so, they shouldn’t mind coming up with some serious earnest money.
You can also have installment earnest money agreements. For example, let’s say the buyer only wants to give you $500 today and you are giving them ten days to inspect the property. Negotiate another $500 in earnest money that is due and payable in ten days.
Make your earnest money NON-REFUNDABLE. In my contracts the earnest money is NON-REFUNDABLE. If the buyer does not close he/she will not get a refund. When I sell property “as-is”, I tell the buyer to do their inspections “before” signing the contract, because once they sign the contract the earnest money is mine.
It is YOUR property and YOU must remain in control. Don’t be fooled by someone who “appears” that they have it all together. Just get the money to protect yourself.
When all else fails
You’ve marketed a ton to distressed sellers and now have a contract to purchase a piece of investment property. What’s next?
You dial up your buyers, one by one. Don’t e-mail them. Don’t send them a postcard. And absolutely DO NOT send them a text message. This is a face to face business! Call each one of them.
Here is your conversation:
Hi , its ___________ listen, I just got a contract on a great property and I wanted to call you and give you first shot at it, before I begin marketing it. You’re one of my VIP buyers, and I want to make sure you get first chance. It’s a 3/2, 1,230 sf, block construction, located by the univeristy and only needs cosmetic repair, $5k max. It belonged to an old man , who has lived in it for fifty years. It been very nicely looked after. What do you think?
If he’s interested, you go from there. You can provide the address and tell him to go see it as quickly as he can. And, you can email him the pictures you took when you got the contract signed.
Here is the key to putting pressure on the buyer, without appearing to:
In 24 hours, this goes out to my entire buyers list, AND I’m going to be putting out signs and an ad on Craigslist, too. Go see it today or tomorrow and then call me A.S.A.P.
The illusion of scarcity creates a rapid response.
When your buyer perceives your property to be in high demand, he’s going to take action. So what happens when you’ve exhausted all of your cash buyers? You’ve contacted all of them, pitched the property, created the perception of scarcity… and not one of them pulled the trigger. But you’re sure the deal is still a good one.
You get your butt in gear and begin marketing that property like your life depended on it. Thirty bandit signs out on the street. Same message. If you like, you can say something like:
3/2 block, $32,000
tons of equity!
must sell right now!
If the property is a 2/1 and 850 sf, use the message you used in the beginning. If the specs of the property are appealing, like a 3/2, 1,200+ sf, then you can list some of them. And, if the price you are selling at is low for your city, then you can list that too. If it’s not low, or even average, leave it off. Basically, if what you are selling is semi?appealing, just get them on the phone. Then, sell them from there. If it’s a real sweet deal, you can put the specs and price. Bottom line, put whatever will get your phone ringing.
- Online ads. And,
- Flyers around town.
- Present it at your local REIA meeting.
- Send out postcards to absentee owners
- Send out an email to everyone you know.
- Do whatever else needs to be done to get this thing sold.
If you fail to do so, you just missed out on a ton of cash. And you know how I feel about cancelling contracts. Here’s a tip. Contact other wholesalers and offer 10% of the profit if they can pull in a buyer. Use every resource you have to get it flipped. And, if all of this fails, and you still have not found a buyer, it’s time to renegotiate with the seller.
There is obviously something wrong with this deal. If you’ve done all of this marketing, and nobody has pulled the trigger… something is wrong. You either misjudged the opportunity, or miscalculated your offer. Either way, don’t give up.
Here is how this conversation goes:
Mr. Seller, after discussing your property with my private investors, they are only able to provide me with $_____ cash to buy your property. If you can meet me at this price, I can buy your house. If not, I am afraid that I will have to cancel our contract.
If he meets you at your price, get a new contract signed. If he doesn’t, send over the cancellation letter, citing a failed inspection.
Dear Mr. or Mrs. Seller,
We regret to inform you that we find it necessary to cancel our contract dated ______ for purchase of said property at _______________________. It simply did not pass our partner’s inspections for purchase. If there is something you can do for us on the price, it is possible that we can reconsider our decision. As of now, however, please consider this official notice that the contract is hereby cancelled.