All Forum Posts by: Carl Schmitt

Ben, we are on the same page with most of this. If you're working with people in desperate situations, you don't want to look like your making huge profits off their situation. I also agree with offers on the spot. When the excitement of moving on with their life is still fresh in their mind.

Some people said you don't want to be too forward about closing the deal. When I'm negotiating with a customer, I always keep this thought in the back of my head. "If I don't close this, who am I hurting more? Me or the customer?" If the seller truly needs to sell, you've educated them on what needs to be done to the home, how the process will work and now if you don't get the deal under contract, some other wholesaler is going to come in and say, I can give you way more than the last guy offered. On paper, he can. But when he locks up the house for 30-60 days and can't actually close because there is no investor willing to buy at 85% of ARV, did you hurt or help the homeowner by not pushing them to work with you?

Good call on the family pictures. Kids are good, grandkids are better. I always ask how old, are they local, what do they do for fun... Then when they can't decide if they take your lower price, you ask something like, "where would you take the kids/grandkids with an extra 20k In the bank?"

If they won't tell you their bottom line, or even a starting price, try this. With a big smile, offer 1000 bucks. Of course they're going to say WHAT?! That's way too low! Then say, we'll if you didn't have a number in mind, how could it be too low? It really depends on your personality. Some people can get away with it with a laugh, others will get kicked out.

David, I can't answer this question 100% because I'm not actively wholesaling...yet. What I can tell you is that my day job as an in-home salesman is very similar. I sell siding windows ect instead of the house itself. Whenever we hire someone new, they always ask, how long should I be with the customer? My response is always, "as long as it takes". I'm not saying you should sit for hours on end convincing them to sell their house to you, but there does have to be a trust factor I believe. I'm in close to 1000 different houses a year, and what I've found works is having a system. You don't want to sound like a robot, but you have to have a plan. I start with a warm up, getting to know the people, talk about their car, their garden, the golf clubs you see, anything really. People like people like themselves. Once they trust you, I would ask to see the whole house so you can determine what repairs are needed. I don't think tearing their house apart is the best idea. As your walking, ask them something like, "what do you like best about your house?" 90% of the time, if they know the house needs work, they'll start to bash their own house so you don't have to. Now the homeowner trusts you, and you know what the house needs for repair. Then I would sit back down and negotiate. Just a suggestion, but when you're negotiating, sit at the kitchen table. Most homeowners don't have offices in their house, so the kitchen is where they make important decisions, sign checks, ect. Just makes them feel more comfortable. For some people, this may take 20-30 minutes. Some people are more standoff-ish, and you could have to spend half an hour just warming up to the people.

Again, these are things I've learned from a similar business, not wholesaling specifically. I'd be interested to see what active wholesalers have to say. If they have no motivation to sell, hopefully you've qualified over the phone, but if not, I wouldn't waste too much time with someone who will only sell if "they get the right price".

I agree, you certainly need experience or someone with construction experience to give you a good idea. When you guys hire contractors, do you hire a contractor who gives you a price on everthing(material, labor, disposal) or do you buy materials and hire a contractor to install them? That would make a difference, I'm sure.

It sounds like a lot of people end up having a deal go bad or not being able to make a deal at all because there rehab estimates were off. Does anyone have, or could we put together, an itemized price list per unit? Personally, I think to look at a house and say, it's going to need 25k is difficult. But if you have a break down saying Siding will cost 300 a square, you can look at a typical 1000 square foot ranch and say, $300 times 12 squares is $3600.
I understand that prices vary depending on location, but I think most people are smart enough to know that if they live in California, it's going to cost more than someone in Tennessee. It would simply be a starting point for estimating costs.
So, does anyone have a list like this?

Anybody actually watch a full episode of the show Flipping Vegas? I just watched it for the first time. I hope this guy gets paid well for being on TV because the flip I watched didn't make him any money... He bought a condo for 15k, put 14k into it and sold for 42k. He's says he made 13 grand on it.
Anyone disagree with his margins? Lol

I agree Justin. Nothing wrong with turning a lead into a listing or having a real estate agent buy property. To be more specific, I'll use this example. If the agent/wholesaler got a call about a property. They went to see the house and made and offer of 50k. The owner says that wont work, but could you do 70k? The agent says I can't do that, but if I list it for you, I could probably get 90k, it just won't be all cash and may take a few months. The owner agrees to list. Now a buyer comes in. As the agent, you already know the owner will take 70. Normally, being listed at 90, if an offer came in at 68, the agent would probably tell them they need to come up on their price. But now that the agent knows what the seller will take, they make not push as hard to get the buyer to come up. Would that be a conflict of interest?

When people run a direct mail campaign, It sounds like there are always a few that want to sell but only at retail pricing. If your first attempt is to purchase or wholesale the property, you make a cash offer and it isn't accepted, is it then legal (or ethical) to list it if you're also an agent? I'm not in this situation, but I've always thought it would make sense for a wholesaler to also be licensed. Then, if they can't assign the contract, they could just list it. Is this legal?

Sounds like if the deal is good enough for you to do yourself, it must be good enough to lend on as well. If it were me, I'd lend to him on the deal and find another. Now you're making money on the funded deal, and hopefully on your own rehab at the same time.

Like others said, you should offer whatever price makes sense for you. Obviously, you're not making an offer just to offend the seller. I know from being in sales, that you'll be amazed what people will and won't do. It seems like the people you think will never go for it, say yes without a counter offer. The worst they can say is no.