What to do when your buyer list fails?: How to find other buyers?

Question

Hi All,

I've done a number of wholesale deals in the past. Right now, I am working on one in which, I think I may have overestimated the value. Other deals I have done, investors usually jump at them quickly. However, I am working on one now, where I think I marked up the property too much. The essentially the deal is as follows: a lot which I have under contract for $45,000. I reached out to my buyer list in the area of 20+ investors that have closed deals nearby recently and have gotten lukewarm response while offering the contract for $65,000 (1st mistake). It has been over a week now since reaching out to these investors and so far I have not gotten much response. Obviously, the first step is to lower the price, but my next question is, if my list of investors are not interested, what other options would you guys advise? Has anyone had experience like this in the past? Thanks!

Kevin Siedlecki · Answer

@Chris Swindle. I am a buyer, not a wholesaler, so looking at it from my point of view might help.

There are two reasons I wouldn't jump on an offering from a trusted wholesaler: 1) I have no capital to invest at the moment, or 2) the price is too high.

If these buyers are active, it's unlikely all 20 of them are tapped out of capital at the same time. I say price is your issue.

Chris Swindle · Answer

I would be interested in something like that and would be willing to make less to close the deal.

Steven Steffel · Answer

@Chris Swindle

My first question to my investors (putting myself in your shoes from my perspective) would be your feedback is much appreciate and enables me to be of best service to you. I didn't get much response on the last deal, if you don't mind me asking... what is your honest opinion of my last deal I sent your way and what would you like me to focus in on for your particular investing strategy?

Something on the lines of the above will help both you and your buy in the long run.

If you just have weak or cash poor buyers you need to keep your list as they probably just have their money tied up for the time being. However, you want to know who and when they are ready to buy their next investment so you will just have to ask the question... then booom you will know exactly what you have to do... If they continue to not perform after giving them what they request then you might want to kindly dismiss them.

Hope this helps mate.

Cheers!

Steven Steffel

Josette Reynolds · Answer

Seems like you have some wiggle room with your fee. Take the $5k and move on. Unless you're going to flip it and make a profit.

Chris Swindle · Answer

Hi @JerryPuckett,

Thanks for the reply. I agree with the advice in the thread. I will be reaching out to my buyer list again and let them know that I have lowered the price (tough call to make!). I will also try some other avenues (craigslist, for example).

Also, I really appreciate your thoughts; you have some great ideas. Unfortunately, I do not have access to MLS, so I am limited somewhat by that. Nonetheless, I will still try and find cash buyers using a few other means I have in mind. Finally, the idea of renegotiating is true. While not pleasant, it would be an option and if these methods do not work. I will give it a couple weeks and if I still get no response I will go back and renegotiate.

Jerry Puckett · Answer

Hi @Chris Swindle,

Use the @ command by typing the symbol, and then start typing the name. You will get a dialogue box to choose from. You can only @ message the people already in the thread and your colleagues.

You've gotten some spot on advice. Lower the price, and use larger broadcasting platforms like craigslist and BP market place (one of the best reasons for having a pro account. Craigslist will reach your city, BP touches the whole world...I've had buyers from Australia contact me through BP)

If you have the means, search out all of the people who bought with cash or own multiple properties within a 2 mile range of the target property. Some of these folks, especially if they own a number of rentals near by, will be willing to pay more for a good rental than the typical flipper will pay for a rehab project.

I wrote an article about that some time ago in my BP blog:  What to Do When Your Buyer's List Fails In the example, I used the MLS to find Cash Buyers and simply started calling them. If you don't have the means, you can use craigslist to search near by Rental listings and property managers.

One last thing that I'm sure will draw fire from all of the wholesale haters out there: Renegotiate. Be honest and tell your seller that you screwed up. Many times they would rather come down on the price than start all over. It's done in retail all the time. The difference is that in retail, that crap usually comes up on closing day; "You don't want to blow this over a measly 5k do you?"

Hope that helps

Chris Swindle · Answer

Hey Kevin,

Agree. I believe I overestimated value from wholesale side. $65K may be retail value but not for wholesale. One way or the other, I definitely need to lower the price. Also, how do you do the @ command? I'm still new around here.

Steven Mitchell · Answer

agree with @Kevin Siedlecki, its not a failure of your buyer list.

James Green · Answer

1. Lower the price

2. Attend some REI meetings in your area and present the deal

3. Create a craigslist ad, but general about it:

"Land investors - we have a vacant lot in the xxxx area for only 55K. Serious CASH buyers only. Please contact me for more info. Verifiable POF needed for address....."

Something to that affect.

4. Always be gathering/marketing for new buyers!

What to do when your buyer list fails?: How to find other buyers?

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