The Walk Through

Wholesaling
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The Walk Through

E. Jacobs
Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes

I'm curious if anyone would mind sharing a step-by-step of what you do when you go to meet a potential seller for the first time. How do you dress? What is the first thing you discuss when you walk in? What parts of the house do you look at first? Do you negotiate a price there or tell them you will get back to them? How long are you usually there? What do you bring? Do you take any pictures? With the negotiation being the most important part of doing the deal, I was hoping someone would share their tactics and describe this process in a little bit more detail. I think this would make for a good article! I'm guessing your first discussion would have to be about why they are selling, what is owed on the property, if there are other liens, and what kind of time frame they need to sell in. If your criteria is still met, what happens next? Thanks in advance. I'm really hoping for a detailed response so that I can visualize myself approaching the front door and working out the deal until the time I walk out.

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Jim Wineinger
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
16y

I cant give you a step by step, but I can give my opinions on your questions, with the hope that the more experienced will chime in to correct me.

Originally posted by E. Jacobs:
. How do you dress?
If meeting for lunch, dress nice. If meeting to examine the house dress as if you know you will be in the crawl space, attic, and other areas examining the house and its problems.

What is the first thing you discuss when you walk in?
To the lunch or the house, it is always best to start with the pleasantries (small talk). When he shows he is ready then move on about the house (which includes taxes, insurance, recent repairs and their warranties, and documentations.)

What parts of the house do you look at first?
The first things that he mentions in recent repairs to verify the quality of work done.

Do you negotiate a price there or tell them you will get back to them?
Both, sort of. I can agree to an price range area depending upon the results of the pictures I take with my contractor. If all looks good then that price range will stand.

How long are you usually there? What do you bring? Do you take any pictures?
These last few were somewhat answered within the last answer. But take as much time as needed to gain his confidence in your abilities to correctly ascertain the quality and the problems. Do not only mention the problems but also compliment the good aspects of the house and he will not feel that you are only lowballing him.

why they are selling,
useful if you are lowballing him, but not necessary to know.

what is owed on the property, if there are other liens,
This is his business and they must be paid off from the escrow amounts to clear title for me. He might even have to add money to the escrow himself to accomplish this.

and what kind of time frame they need to sell in.
If they are honest and above board (as you should be with them) this can happen very quickly so it is not a problem.

If your criteria is still met, what happens next?
Make the deal.



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  • Brian Haskins
    Real Estate Investor · St. Louis, MO · Member since 2008 · 443 posts · 91 votes
    16y

    Send me a private message. I can help guide you in the right direction.

    Brian Haskins

    1Reply
  • Max Vulcanus
    Real Estate Investor · Birmingham, AL · Member since 2010 · 14 posts · 3 votes
    16y

    If I were you, I wouldn't even waste time going to the house first. I will just talk over the phone and see if there is any equity in the house. No equity. No need to talk any further especially for wholesale.

    How much do they think the house is worth?
    How much do they owe?
    Are the behind on payment? In foreclosure?

    Then, I will ask them about the condition of roof, electrical, plumbing, foundation, HVAC because these are the most expensive items to repair.

    If foundation has problem, I will run as fast as I can (especially true in this soft market. In a heated market, might be worthwhile to repair foundation in there are $200,000 equity in it).

    0Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    Thanks Max. So if you clear up all that information on the phone and it still sounds like a good lead, then you should schedule to go see the place. Otherwise it's just a waste of time obviously. I'm still looking for an overview of how the process works when you do arrive at the house though. Brian, I sent you a colleague request. And I have books with some scripts and stuff like that but I'm wondering what proven methods you guys have used to work out profitable deals.

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  • Max Vulcanus
    Real Estate Investor · Birmingham, AL · Member since 2010 · 14 posts · 3 votes
    16y

    In dealing with junkers (house needs work), If I were u, I will not even go see the house first. I will make an offer (contingent upon inspection) verbally and negotiate over phone. Then fax over the contract and have them sign. Have them fax back. Again, contract is contingent upon inspection and walkthrough.

    Only when I know I have a potential deal and signed contract in hand will I go see the house.

    This is as far as I can write, anything more than that will require a whole day of course work. I really mean it.

    0Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    How can you negotiate over the phone if you don't know what the property is worth or what kind of condition it's in? What kind of terms do you include in that initial contract?

    0Reply
  • Max Vulcanus
    Real Estate Investor · Birmingham, AL · Member since 2010 · 14 posts · 3 votes
    16y

    These are all very good questions. You were trying to get a bunch of answers that require one or two day of course work. I highly recommend you take one wholesale course from one of the gurus. Any good one will do.

    I am not trying to sell you anything. In fact, I don't even offer any course or seminar.

    Best wishes.

    0Reply
  • Jim Wineinger
    Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
    16y

    Dont stick to the Wholesaling forum, there is information also on the REO forum and the financing forum. Also check out the posts concerning apprasials and how they do their walk through's.

    There is so much information here that you should not have to pay for any guru's course(s) and you will get more complete information than they usually put out.

    0Reply
  • Max Vulcanus
    Real Estate Investor · Birmingham, AL · Member since 2010 · 14 posts · 3 votes
    16y

    that will work too and nothing compared to the interactive session offered by a good guru where u can post your Questions and get immediate answers.

    There is the sloooow way and there is fast way. It all depends on your budget (if any).

    Be sure to choose a good guru, if you choose the fast way.

    And jawsette and E. Jacobs, I have ZERO intention of turning this into a gurus vs. self-taught debate. It is a matter of personal preference and personal choices.

    This will be my last post on this particular thread. Best of luck!

    0Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    You're right Max I know my post was definitely a tall order, which is why I said that it would be a great topic for an article. Hell, there's books written entirely about the subject. But I feel information coming from current, active wholesalers would be more valuable to me than whatever authors of books write. When I read a book I can't ask the author questions about what I'm reading, and I also don't know if what's written is based on real or fictitious examples created to make the author seem credible. That's why I was hoping for some kind of play-by-play that people are currently using and works for them. I will definitely be looking around for other threads of similar topics, thank you Jawsette. And as far as gurus, I've never really considered one since I've been bred not to believe in gurus by the REI community. I'm sure there are legitimate "gurus" out there who have courses which are helpful and can actually be applied, but I don't know any good programs and I am very reluctant to spend big bucks when I can already access more information than I can handle for free here on BP or other sites. If you want to make some recommendations I'd be willing to look into them.

    0Reply
  • Jim Wineinger
    Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
    16y

    I just cant imagine why this is the slow way since there has been several posts now in such a short time.

    Sounds like you have located a guru or someone who wants to profit by directing you to a guru.

    I am not one to interact with about a walk thru as the homes that I buy have been abondoned and there is no interaction as such which you are describing.

    But there will be others here who will also answer you.

    0Reply
  • Max Vulcanus
    Real Estate Investor · Birmingham, AL · Member since 2010 · 14 posts · 3 votes
    16y

    There is nothing wrong with for profit as long as one delivers good value. United States of America is built upon profits, among other things. Profits are then reinvested to create more products and services, improving people's lives.

    Didn't you guys try to "profit" from doing wholesale? Or are you trying to work for free?

    Didn't I say ANY good guru will do?

    Best of luck!

    0Reply
  • Jim Wineinger
    Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
    16y

    I cant give you a step by step, but I can give my opinions on your questions, with the hope that the more experienced will chime in to correct me.

    Originally posted by E. Jacobs:
    . How do you dress?
    If meeting for lunch, dress nice. If meeting to examine the house dress as if you know you will be in the crawl space, attic, and other areas examining the house and its problems.

    What is the first thing you discuss when you walk in?
    To the lunch or the house, it is always best to start with the pleasantries (small talk). When he shows he is ready then move on about the house (which includes taxes, insurance, recent repairs and their warranties, and documentations.)

    What parts of the house do you look at first?
    The first things that he mentions in recent repairs to verify the quality of work done.

    Do you negotiate a price there or tell them you will get back to them?
    Both, sort of. I can agree to an price range area depending upon the results of the pictures I take with my contractor. If all looks good then that price range will stand.

    How long are you usually there? What do you bring? Do you take any pictures?
    These last few were somewhat answered within the last answer. But take as much time as needed to gain his confidence in your abilities to correctly ascertain the quality and the problems. Do not only mention the problems but also compliment the good aspects of the house and he will not feel that you are only lowballing him.

    why they are selling,
    useful if you are lowballing him, but not necessary to know.

    what is owed on the property, if there are other liens,
    This is his business and they must be paid off from the escrow amounts to clear title for me. He might even have to add money to the escrow himself to accomplish this.

    and what kind of time frame they need to sell in.
    If they are honest and above board (as you should be with them) this can happen very quickly so it is not a problem.

    If your criteria is still met, what happens next?
    Make the deal.



    2Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    Thanks!!! I appreciate you taking the time to answer a lot of my questions. I'm still a little curious why you don't need to know why they're selling or what is owed on the property. I understand why you technically don't need to know the reason for selling, but if you know what their goals are doesn't that make it easier for you to propose a deal that will benefit both of you more? And don't you have to know the mortgage balances on the property to determine how much equity there and how low you can offer so that the bank is still paid off? And if you know about other liens too that can give you more negotiating room because you can offer to pay those off if it helps get the deal done and you're still making a good profit.

    0Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    Also, Brian, if you're reading this I sent you a colleague request. I wish I could PM you without being colleagues first :roll: I did check out your website though and it looks great! Nice job!

    0Reply
  • Jim Wineinger
    Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
    16y

    It does not matter to me why they are selling the fact that they want to sell and I want to buy, is good enough to make a deal.
    Those that want to know why they are selling are usually those that will prey on their misfortune by knowing what it is and discounting the price so that they can make more profit. Or are not going to buy themselves and need to clear enough room to make a profit while selling to their buyer. (wholesalling)
    This method does work, but I dont need to use it. That is all.

    As far as the other liens are concerned they must be paid off before the title can change hands to me. I will only pay him (through escrow) the agreed upon amount. If that is not enough to clear the title, he will have to pay the rest of the monies needed to clear the title or no deal can be done.

    What he owes on the property and what I am willing to pay for the property are two different things.

    Business is business. If you deal fairly with people, others will know of your reputation and you will find more deals. Rather they will find you!!!! I dont need to create deals by "forcing" the homeowner to take less than the property is worth to make the numbers work for me.

    Now there are times when I will give the homeowner full price for his property and not make any money (breakeven) because he honestly told me of his situation and it improves my reputation to help out. But I will never ask him why he needs to sell.

    0Reply
  • Ali Samana
    Real Estate Investor · Frisco, TX, TX · Member since 2010 · 388 posts · 138 votes
    16y

    Hi E. Jacobs,

    Those are some great questions, and lets see if we can get some good answers here for you.

    When I have someone call me, I fill out a sheet called the IPQ sheet for me (you can email me and I can email you a blank one). It has all of the questions that I need to know, including why they are selling. I do pay alot of attention to why they are selling because if I know the strength of their conviction than I can guestimate where my offer needs to be.

    Once I have the sheet filled out and I can tell the seller is motivated, I do like to go look at the property. I don't have them sign a contract up front, put yourself in their shoes and earn their confidence. I dress casual and I spend some time meeting with the seller/family. I repeat the answer that were given to me (in a conversational tone) so the seller verfies the information and then ask their bottom dollar, I also ask if we could move really quickly would they be willing to sell for what they owe. I explain to them how we would buy their property (sub2, shortsale, L/O etc) and make sure they understand and agree to that part of it. So far, I have always left and not made an offer right away (to discuss with my partner).

    One of the things that I have learned about negotiations is, unlike the popular belief, you have to take it slow. Most people try to rush it so the other party might not catch on, but if I am negotiating I take it slow.

    Then I present the offer over the phone, taking the blame off of me and putting it on my partner (my partner won't authorize me to spend any more than this on this property).

    Most of the above was taught to me by my dad who runs a successful business and it works like a charm.

    1Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    Thanks Ali - that's some great info. That's the kind of stuff I can really use when I deal with my potential sellers. I'm going to PM you about that IPQ sheet with my email. I especially like the part at the end about the partner not authorizing to pay more. It makes it seem like to the seller that you've done everything you can to make the highest offer and that they really can't get a better one. My only concern there would be it's a lot easier to turn the offer down on the phone and never see you again than to say no with you there in their kitchen face to face and being able to negotiate more effectively

    0Reply
  • Ali Samana
    Real Estate Investor · Frisco, TX, TX · Member since 2010 · 388 posts · 138 votes
    16y

    Hi E. Jacobs,

    In reality I really don't have a partner, but I always blame this mysterious partner :)

    As for them turning it down, you have to play that by your gut, whether you should meet or talk with them over the phone. Normally I have a number in mind and its a take it or leave it.

    Also, if you take some time with negotiation, meaning don't throw the number out the first day the seller will be committed to the transaction. You have to get the seller to put some time into the transaction and then they will be less likely to say no to a reasonable offer.

    again, just my 2 cents.

    0Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    Another great tip. Thank you! So you just say what you're willing to offer, and that you won't negotiate away from that? How much profit do you leave for yourself? And do you ever try to offer below your limit and see if they accept or try to work you up higher?

    0Reply
  • Ali Samana
    Real Estate Investor · Frisco, TX, TX · Member since 2010 · 388 posts · 138 votes
    16y

    I might be able to negotiate, but I have a number in mind that is my top dollar. For example, I just had a couple call me and tell me they had a house to sell that is worth about 145k. I talk with them and they say they will take 125k for it. When I talk with them more and explain to them how long houses are on the market and I will pay all of the closing costs (Sub2) they say they would take 100K. Then I go and see the house and see that it needs 7.5k in work. I leave and tell them I will be contacting them in 2 days after I have discussed this with my "partner". Now, my formula is 65%-rehab. 65% of 145k is 95k and minus 7.5 would make my top dollar 87.5.

    I offered her 80k and she took it, with a sub2 on the loan.

    0Reply
  • E. Jacobs
    OP
    Real Estate Investor · Chicago, IL · Member since 2009 · 91 posts · 22 votes
    16y

    Great job! I just bought a book on sub2's so I'm hoping to learn more about that soon. I like your way of explaining things- very straightforward. Do you use the MLS to figure out the local days on market or to find comps? I'm wondering if I should get my license.

    0Reply
  • Ali Samana
    Real Estate Investor · Frisco, TX, TX · Member since 2010 · 388 posts · 138 votes
    16y

    I have a realtor that I use. She an extremely valuable asset to my team. She understand investing (also is an investor herself), so she makes sure I don't make careless mistakes. I use her for comps.

    There are many reasons to and not to get your license. I read a blog on this site about why one gentleman got his license.

    In Corpus, however, realtors don't particularly have a good name. So, I believe it gives me a leg up to say "Hi, I am calling about your property from so and so and I am not a realtor:)"

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