All Forum Posts by: Peter C.

@Keith Goodwine, @Jordan Archer

We were able to connect briefly with our realtor expert. He referred us a link that discusses this topic (http://www.brewerfirm.com/articles/article-splits-...). 

Some specific quotes from the article:

• "Also under California law a broker can share a commission with a party to the transaction, provided that person is not doing any work that would require a license... The same holds true of payment of a finder's fee. There is no prohibition under California law so long as the finder does not perform any services requiring a license. A finder is someone whose only act is introducing a prospective buyer or seller to one another or to an agent. Several cases have defined a "finder" this way; "The finder is a person whose employment is limited to bringing the parties together so that they may negotiate their own contract, and the between the finder and the broker frequently turns upon whether the intermediary has been invested with authority or duties beyond merely bringing the parties together, usually the authority to participate in negotiations."

At least in California, where we will be initially launching, we do not expect this to be a significant issue.

Thank you both for your concern - great to keep in mind.

Beyond these possible issues, from the perspective of the experienced wholesaler, would either of you be interested in these kind of leads that are open to having their property assessed, knowing there's a chance they might be anchored to a value you would not execute on?

Pete

@Adrienne Bryson

That's great to hear! We're still developing the infrastructure to deal with the sales process, but we can stay in touch!

Flippers have always had the option of going straight to sourcing the deals themselves - but they work with right now wholesalers so they can focus on just executing on the deal. Flippers who go through the entire value chain themselves (i.e. source their own leads) wouldn't be competing with wholesalers, so there should not be additional competition from our platform.

Hi @Adrienne Bryson,

Thank you for your feedback. I would actually argue that we provide the most value to wholesalers like yourself and the other wholesalers that have kindly given their feedback. Wholesalers are the expert negotiators who move from one potential lead to the next constantly, who are okay facing a list of 30+ contacts to initiate a call with, and 70+ to follow-up with over a few days. We hope to ensure a consistent quality lead flow so that wholesalers can maximize their time on closing on deals, not finding people to talk to. 

How would you feel about paying on the lower end for $50-$100 on individuals who have not committed to selling at a discount, but are open to the idea of someone following up with them to have their property valued? At that point, if an individual doesn't want to sell at a discount, this would be the conversation with the individuals to walk them through exactly how much work and time would have to go into the property if they were to list it themselves (i.e. they would have to move out as renovations were done, then potentially move out while the house is listed, etc. over a few months), which leaves room for the savvy negotiator to convince them to sell and assign a contract.

Pete

@Jordan Archer

Hi Jordan - thanks for your advice. I'll PM to get a better understanding of what you mean.

Pete

@Andrew Michael

To clarify, if individuals were to have said they would be open to a price that was lower than market value, we would probably price the lead accordingly. However, for the cheaper leads ($50-$100 ones), where all they have done is agreed to be contacted at a later day for an "assessment" - they might even have put a price they had in mind, where we leave it up to the wholesaler / flipper to close the deal if they can come to agreement with the seller.

@Andrew Michael

Thank you for your feedback! Really appreciate your thoughts.

Just to understand your concerns, it sounds like at a high level:

• You're unsure in the quality of these leads
• You don't like the fact that you're taking on the risk of making sure these leads go through

Is this correct?

Wanted to clarify a couple things based on your post as well. To avoid anchoring on the $500 number, I want to clarify these would be leads that:

• Have all but agreed to sell their property
• Have given a fairly low price compared to market
• Is highly motivated
• Is looking to sell immediately

Realistically, most "leads" would sell for $50-$100 - this is someone ready to pick up on the other line to hear someone make an offer on their house,  with you as the wholesaler equipped with some other basic information about them and their needs/wants.

I'm not sure which sites you're referring to, but from my experience in using Listsource and Melissadata, I expect to spend at minimum ~$100-500 in mail to get a call back, not including the cost of the list itself, without any sort of information on the potential seller, which leaves me at a disadvantage from a negotiations standpoint.

Regarding your mentioned model - we're definitely exploring the option of:

• Significantly reduced cost per lead with profit sharing models for the more risk-averse individuals
• No upfront cost/lead, but higher cost/lead if a bulk of sales ends up in a sale

Pete

@Dwayne Jones

In my experience it's extraordinarily biased. I've known appraisers who pick and choose specific comparables to anchor towards and specific price point. They actively fight against appraising at a high value, and, as others have said, can be frustrating to deal with.

I have seen instances where I see them do comparables 6+ months ago in an extraordinarily hot market (like Seattle recently), when obviously prices have gone up since then.

@Derek O.,

I've had great experiences using Angie's List for contractors, especially if it's a tight turnaround time. I highly recommend looking into them as you develop your network of contractors/handymen/painters/roofs/etc.

Pete

Hi @Elif Erguclu,

There are some restrictions, especially if you're looking into multi-families. Expected rent (while you occupy a unit) must be > 85% PIT (Principal, Interest, and Tax).

Pete

Hi BP community,

Long time reader and investor here. My experience lies in flips and buy-and-holds in Seattle, Los Angeles, and internationally for both residential and commercial properties. I've had a lot of experience in lead generation in my former corporate life, and I've recently started to bring these skills to my real estate business.

I'm interested in connecting with wholesalers and flippers to expand my network and share knowledge.

Pete