There’s a right way and a wrong way to work with sellers of wholesale properties. In this article, Tim Mai shows you how to make profitable deals in sometimes difficult situations. Contact Sellers of Wholesale Properties and Work with the Them the Profitable Way! Use Tim Mai’s Effective Sales Technique to Convince Homeowners to Sell! In this article, I’ll show you how to deal with potential sellers of wholesale properties and convince them that your offer is the best one going! Once I’ve located a seller, I normally use the following dialogue: Tim: “Hi, may I speak to John, please?” John: “This is John.” Tim: “Hi, John. My name is Tim Mai. I’m calling about the house on 123 Main Street. “I’m possibly interested in buying your house. (Pause) If I can pay all in cash and close quickly, what’s the least amount you’d take?” Notice that with the last sentence I’ve been very direct and let them know what I want to achieve. The seller will respond with one of these responses: John: “I’m not interested. The house is not for sale.” Or%u2026″How much will you offer me?” Or%u2026″Yes, I do want to sell, and I’m asking XXX dollars.” Depending on the response, your answer will vary. Let’s look at this in more detail below. Seller’s First Response: House Not For Sale If the seller says the house is not for sale, then tell them, “Well, John, what are you going to do with the property?” The purpose of this question is to get the seller to open up. You want to know what their plans for the property are so you can see what their motivation level is. The more you can get them to open up, the better it is for you. If they say they’re not interested or haven’t decided yet, then ask, “Can I follow up with you within the next two weeks?” If they’re open to this idea, I’ll follow up within that time period or sooner. If they’re non-committal, then I’ll follow up once a month. When the call is completed, take the property information and put it in your tickler file so you’ll be sure to follow up. Persistence is often the key to success! So, even if they don’t want you to call back, still follow up. You can do it with postcards or letters (every 30 days). In general, keep following up until they tell you to stop contacting them. You can do these mailings yourself, or you can out-source them. I like to use a mailing company to do this task since I can better spend my time on more profitable activities (like finding more properties!). Or, you don’t even have to use a company. If you have a stay-at-home mom who’s a tenant in one of your properties, you can pay her to write the letters and mail them for you. This is leveraging the time and talent of other people so you don’t end up going crazy trying to keep track of minor details. Seller’s Second Response: What’s Your Offer? When you get this response, don’t give the seller a price; try to get them to name one. Instead respond with a remark like this: “Well, John, I don’t really know the condition of the house. Can you tell me a little bit more about the kinds of repairs it needs?” If they ask why you don’t already know about the condition, you can respond with, “I drove the neighborhood and found your property interesting. But I haven’t seen the inside so I don’t really know its condition. Please tell me more about it.” Again, the purpose of this remark is to get them to open up. You want to find out if they have a real need to sell the house, or if they’re just trying to get a price out of you and aren’t all that serious about selling. Once you have that information, ask again, “If I can pay all cash and close quickly, what’s the least you would accept?” If sellers insist that you give a price, then respond this way: “Assuming the house is in the same condition as some of the other ones in the neighborhood, my investors and I have been buying between $20,000 to $40,000 (or the appropriate figure), depending on its actual condition. What if that’s all I can offer you?” Depending on the situation, they may hang up on you or give you the response you’re looking for. But, even if they hang up, you’ve put the idea in their head that your offer is how much the properties in their neighborhood are going for and created more realistic expectations on their part. Another seller response may be, “No way will I accept that amount. I want at least $60,000.” So, now you’ve gotten them to name a price! Always offer sellers a range of prices. You don’t want to commit to a specific amount because you haven’t seen the condition of the house yet. You may get to the property and find it needs some relatively expensive repairs. In that case, you can then come back and re-negotiate the price to account for those repairs. Also, a range prevents the seller from getting offended by an exact price. In other words, you’ve created a comfort zone for both you and a seller. Here’s an example to illustrate how to operate in this situation: Assume you’re interested in a two-bedroom house with a one-car garage in a lower-income area of your targeted area. You know you can buy one for between $15,000 to $20,000. You also know that the house would probably require between $15,000 to $25,000 in repairs. Let’s assume the seller agrees to a $15,000 price. You know a house like this would retail for $60,000 to $65,000. You also know that a rehabber would be happy to make $15,000 on the property. So, you do “backtrack” calculations to figure out if the deal is a good one: Assume that the retail price is $65,000, and repairs will cost $20,000. You know a rehabber can sell it for $65,000 minus $20,000 for repairs. That comes to $50,000. So, the rehabber will buy it for $30,000. So, if you can buy the contract for property from the seller for $15,000 to $20,000, you’re good to go. In fact, even if you have to pay $25,000 for it and then resell it for $30,000 to the rehabber, you’re still making a good profit. In a moderate-income neighborhood, the competition is greater so there’s a higher demand for these properties. Therefore, you should be willing to pay more than in a lower-income neighborhood. Here’s an example: Let’s say a house is worth $100,000 and needs $10,000 in repairs. In the moderate-income neighborhoods, houses typically need fewer repairs than the low-income houses. Let’s assume these repairs range between $7,000 and $15,000, and you typically wholesale these at 85% of value. Let’s see what the calculations look like. A house worth $100,000 needs $15,000 in repairs. Minus the repairs, the price is now $85,000. You can sell the house for 85% of that amount which equals $72, 250. Now you know that you can sell for that amount. So, now your job is to get the house for anything less than that. If you can get it for less than that, then that’s great. You’ll make your money there. My goal on a wholesale deal is to make at least $10,000 so I always account for that amount in my offers. If I can’t get at least ten grand, the least amount I’ll settle for is $3,000. If I can’t make the $3,000, then I simply put the seller in my tickler file and follow up with him or her a month or two months down the road. If you find a home and you think there might be something there but aren’t sure, my advice is to go ahead and put it under contract immediately. Then, look for a buyer. If you find you can’t make the $3,000 minimum, then go back to the seller and negotiate the price down. So, how do you get the lowest price from a seller at any point in the conversation? That’s the subject of the next article. Want to find wholesale properties and neighborhoods the easiest way possible? Go to www.dodeals.com!!!  | ||||||||||||||||||||||||
Happy 4th of July and Your Financial Independence Day!Hi everyone! Are you getting ready to watch the fireworks yet? My family and I are heading out to watch it as soon as I post this message. Go here to watch my latest video about how to use the Law of Creation to achieve your financial... more
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 7 Day Instant Cash Real Estate Strategy by Tim Maihttp://www.dodeals.com Tim Mai's Seminar on the 7 day instant cash real estate strategy
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