Buying from a wholesaler

[Andrew Bertram]

I am new to real estate in Baltimore, Maryland. I am wondering if any of you more experienced investors could give me some advice. I'm looking for deals, but don't have my real estate license so limited access to the MLS and haven't started any marketing yet (though I'm working on a rough draft of a letter to send while driving for dollars). Do you think I could benefit from working with a wholesaler for help finding deals? Or would you recommend that a newcomer take his time and find the deals on his own? I'd also love any insight into how to word letters to distressed homeowners, and how to find the homeowners' addresses in situations where the property is rented.

[Andrew Michael]

@Andrew Bertram  I still consider myself pretty new to the game however after about two years or so here are my suggestions.  

I would highly recommend teaming up with someone more experienced especially on your first deal.  I found an investor friendly agent who has been a tremendous help.  Starting out, I really didn't even know what I was looking for and thought I was finding good deals however they were far from it.  In my opinion, it takes about 100 houses or so in any given market before you really start to grasp what it is your looking for and what is an ok deal vs good deal vs home run.  So keep viewing houses, driving for dollars, etc and over time you will narrow down your criteria and be able to focus on potentials more quickly.  

Below is the script I used for my last campaign.  I got about an 18-20% response rate (not including the non deliverables) which I thought was pretty good.  I payed someone from work and had her hand write about 300 letters.  Also, if you will be fielding all calls by yourself like I am, I would suggest staggering out the letters so you don't get 50 calls in a day.  Another thing I did was send them out according to location with the goal to get most of my calls on Saturday.  Since we are on the east coast, send the west coast addressed out early in the week and the closer addresses later in the week.  This made it so most of my letters were delivered on Thursdays and Fridays thus my calls came in on Saturdays which was my day off.     

Lastly below the mail letter script is the script I followed once I had them on the phone.  Most of it is a paraphrase of various podcasts and posts from BP.  Not the best guide ever but something I find helpful.  Again you will need to adjust for your personal preferences and base it on the flow of the conversation.  

Hope this all helps

Hi (Owners first name),

My name is Andrew Michael and I am interested in buying your house at (Insert Property Address).  Please call me at 301-xxx-xxxx or email me at [email protected]  I am able to make you a cash offer and have the ability to close in less than 30 days.  I look forward to speaking with you.

Kindest Regards,

Andrew

301-xxx-xxxx

[email protected]

Date:______

Name:____________________

Phone:____________________

Email:____________________

Address:____________________

City:____________________

State:________

Zip:________

Reason for sale:___________________________________________

Agent Y/N:________

Prop Type:________

Year Built:________

Approx Sq ft:________

# Bedrooms:________

# Bathrooms:________

Cond 1-10:________

Major Issues:___________________________________________

Major Repairs:___________________________________________

Value of Home:___________________________________________

Equity/ Owed:___________________________________________

Tell me again, why are you selling?

What is the least amount you are willing to take for the home?(Repeat offer amount slowly)

Are you able to do better than that for me?(Remain quiet until they lower the price again)

(Tell them what you can offer:Cash, sell the home quickly, quick closings)

Knowing I am a cash buyer and can settle quickly, what’s the best price you can give me?

(Use the bottom number that THEY have given you and create a purchase price range. Subtract 25% from their offer to get to your range bottom.)Right now I am thinking in the _____ to_____ dollar range depending on the walk through.Not too far apart on price, when is a good time to meet?

Range offer amount:________________

Walk through date:________________

Walk through time:________________

Day before walk through confirmation:________________

Formula: ( ARVx70%)-Rehab/Closing= Offer Price