Wholesalers: How do you know when your investor is for real or just wasting your time?

Question

I just want to figure out who is for real in real estate investing because i don't like wasting time with someone who's not going to buy.  I went show a property to one of my investors yesterday; he told me he would buy the property if there was no termite issues.  It turned out there was no termite.  So i ask him if he is going to buy the house, his excuse is there was an issue with the rotten wood under the house that he didn't know about.  Now he doesn't want to buy the house because of the rotten wood and he told me the price of the house is too high, and he wants to be all in 70%!.  I thought it was just a termite check up.  Now it seems like the price is too high for him, there is rotten wood, and he only wants to be all in 70%, and now he is telling me that renovation might go a little bit higher because the foundation is going to run $550 dollars per pier!!!!!  The most my investors pay is $135 dollars per pier.  I don't know how he came up with $550 per pier.  Anyhow, a little bit more about the investor.  He is a general contractor and he flips about 3 houses per year.  Also, i send out all the information about my property before my investors going out to see it.  The information includes the price of the property and the estimate repair cost to do the whole house.  Also, a little bit info about the property that i was marketing to him.  115K  Purcahse price, 100K Rehab, 290 ARV.  He agreed with my ARV because he flipped houses in the neighbor hood before.  I mean should i still work with this guy?

Ibrahim Hughes · Answer

I agree with Allison and Dell. What you're going through Sonny is exactly why we don't do email blasts. Like well connected REO agents, When we get a deal we call up one investor on our short list of high paying and proven buyers. They make a decision on the house 15 minutes after seeing it. And they close each and every time. Email blasts will bring in a lot of posers who will waste your time and cost you the deal in many instances.

Dell Schlabach · Answer

A real buyer should be able to do an analysis very quickly and make a decision right away. If someone shows me a deal in our area, takes me all of abouts 15 minutes to do a walkthrough, check the comps, run the numbers, and be  able to tell you what I ccouldpay you. If there was an unusual foundation issue or something structural I can typically have a contractor quote the same day and get back right back to you.

Alison M. · Answer

In my experience a real buyer is someone who is willing to get to the house quickly after you've brought it to him or her, who can produce proof of funds immediately without hemming and hawing about it, and who can make a decision about whether to buy or not quickly. A real buyer will not string you along or waste your time. If your deal is good, they want to have a good relationship with you. A real buyer wants to be easy to work with.

In a competitive market you can also ask for a non-refundable EMD and that will weed out some tire-kickers.

Mary B. · Answer

With no room to lower your price you definitely want to put him aside right now. Don't even waste any more of your time with him on this deal. Find yourself another buyer either on your own or offer to co-wholesale it by letting a wholesaler in the area that has a sizeable cashbuyers list bring one of their proven buyers to the closing table.

Kudos,

Mary

Patrick Britton · Answer

I think you're always going to have situations where you think the buyer is viable but for whatever reason they actually aren't.  It could be them or could just be the timing.  Don't forget the 80/20 rule.  80% of your businesses is going to come from 20% of your list.  And 80% of your list is only going to give you the remaining 20%

Mary B. · Answer

Yes, Mike, I know what you mean there as reverse wholesaling isn't the b.s. cutter it was thought to be. At some point you have to put them in the back burner and keep it moving, replacing them with the genuine closers.

The problem is cash is king and when some people want to feel like 'royalty', they pretend to be cashbuyers to get people emailing / calling them with deals knowing that they won't or can't close only to go the 52 fake out route in the end. I've learned that lesson the hard way and have had to adjust to weed them out as fast as possible.

Kudos,

Mary

Sonny Ngo · Answer

@Joe Villeneuve

and @Mike York

Thanks for yall input.  I really appreciate you guys time.

Mike York · Answer

I feel you @Sonny Ngo

Not quite your scenario but I have had several "buyers" that give me criteria and when I find a match....nothing.  At that point, I just put them on a email list and they get whatever I have at the time.  I hate to do it that way but I don't want to waste time either.

Joe Villeneuve · Answer

@Sonny Ngo Put a form together that they fill out for you that describes what they are looking for, what their financial entrance strategies are (cash, credit, how much etc...), and where they are interested in buying.  Make sure you also include a "Notes" or "Comments" section where they can describe anything that they don't want.  MAke it digital so they can fill it out on the computer and email back to you.

If they fill it out, you have the info you need to make better choices of properties for them.  You are in a very real sense just filling orders at that point.  If they don't fill it out, you have your answer as far as if they are serious.  Serious investors don't want to waste their time either, so they look at this form as a way to maximize the efficiency all the way around.  It works for me and the group I work with.

Joe VilleneuveREcapSystemA2REIC

Sonny Ngo · Answer

@Mary B.

Thanks Mary.  I can't really lower my price because my margin on there is already skinny.  I guess he is not going to be my priority right now.  I'll just stream him along.  :)

Wholesalers: How do you know when your investor is for real or just wasting your time?

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