Getting More Offers Accepted With Sellers: A Trick Im Sharing with You

[Bill Mitchell]

We all know about the 70% rule and how it works. But if your numbers are correct for ARV and repairs, and then have to back out your assignment fee as well. Sometimes its difficult to get your offers accepted because they are lower than the seller is willing to accept.

A new solution I found to this is simple. Get on the MLS, see what the cash sales are in the area. Try and get under the price of similar properties that have sold recently for cash. Even if the price doesn't give the end investor 70% minus repairs.

I will show you an example.

Property was in bad condition, tenants had destroyed it and deferred maintenance owner wanted out. After getting accurate repair and ARV and backing out my assignment fee I could only offer him 21k for the property. That wouldn't work, I hopped on the MLS and saw recent comps for same type of property.

Sale 1: 32k

Sale 2: 34k

Sale 3: 30k

I got it under contract for 29k and made a quick profit on this one. Even though at those numbers its no longer 70% ARV minus repairs, it doesn't matter because I could see on the MLS investors in the area are buying higher than that. If that's the price they are willing to pay, I will provide them something slightly more discounted than that. Then call up the cash buyers myself and let them know I have a similar property in the area at a better price. This way everyone wins, seller gets more money, you assign the property and the investor gets a "deal".

Even though, in my opinion, buying in this way there is not a ton of meat on the bone for the end investor and allows you to get more offers accepted. But hey if thats what they are willing to pay I will provide for that.

Let me know what you guys think or if you have any questions. I would be curious as to what more experienced wholesalers around here think such as Tim G or Jerry Puckett think.

Thanks everyone

[Tim G.]

So you are asking if doing something that was successful and made you money should be continued? Well, I think you know the answer to that question already!

I basically just sit and watch, you MUST pay attention. Sam has done this in his market and found a way to be successful on more than just rehabs, good for him!

Basically one day I was sitting there wondering why the hell I couldn't close a damn deal and I'm watching people buy rehabs on razor thin margins. Huh, I thought to myself. The rule says my offer should be this but they aren't buying that way.

Wholesaling is not about locking up low, it's about selling high. You are locking up where the average rehabber will buy a deal and selling where the volume rehabber will buy. The 70% rule on here drives me nuts I know its causing newbies to miss deals, there was a painful post on here about a guy in San Diego who missed a deal and asked if he messed up on here. Everyone said "No, they are idiots they paid too much don't feel bad!" Well, I looked it up and my friend wholesaled it, made $20k and the rehabber did well on the deal too. Because he was following advice from individuals in another state and not in his market he missed out.

You have to study your market and know it better than anyone, this is a tough job but when you are good you can be lethal. #1 rule, know your market!