Well, crap my pants! You have an excellent understanding of what a wholesale deal is!
What a relief... That just reduced this thread by eight posts, I'm sure!!!
Get your seatbelt tightened, because I'm going to 'drop some knowledge on you'!"
Philosophy of Strategy:First, there is more than one way to skin a cat... However, your cat skinning is on a $400.00 budget. As a result, you're gonna have to apply LOTS of elbow grease to make up for both the lack of cash, and the efficiency that 'more' cash would provide for you.
So, we're talking guerrilla marketing (not gorilla).
But Before We Move Forward...1) Write down the goal, the deadline and the consequences of not achieving this goal by the self-imposed deadline and post it where you can't miss it.
2) Tell everyone you know what you're doing and why. The harder this is, the more motivation you'll create to avoid embarrassing yourself by not achieving this goal by the deadline. I can't overstate the importance of this.
Okay, to get this ball rolling assuming you're going to do steps 1 and 2 above...
Locate The Farm:Find out where the C-range, middle-lower end single family properties are.
That's your most likely farm area. These are older homes in decent neighborhoods, with a significant amount of sales activity ...You may have several farms if necessary to get a critical mass of prospects. Built in the 1970's early 1980's. Maybe in some areas we're talking mid-century and space-age era properties. Any area with houses that need major fixing.
NOTE: We're not on the MLS. This is a waste of time for our purposes. We can drop a hook here, but that's a specialty that involves parties that are not interested in helping us wholesale deals.
You're gonna have to do a lot of heavy lifting at first just to overcome inertia and establish this guerrilla marketing foundation ...all without burning up your $400.00 bucks.
Online Prospecting:You need to keep one headline coming up on the first page of each free advertising forum you can find. Repetition is the objective. Response is the goal. Google free real estate ads for possibilities. You want to stay in the Housing For Sale column as much as possible, because people who have a house for sale, will look there first to see their ads, and will not look in the housing wanted sections as much, if at all.
Craigslist is getting harder to fool, so say what you gotta say to keep your ad from disappearing, ghosting, or being flagged in this section. Something saying 'I buy and sell - call me today' and 10 other variations of that theme will work to 'qualify for the 'wrong section' posting. Frankly, you don't have to have a hard-sell approach, but visually sticking out is good. Meantime...
Here some tricks of the trade for online ads besides being relevant:
Add odd symbols at the beginning and end of headlines, either: #$%@&* will work.
Add humor
Spell words wrong
Bandit Signs: This is not a low budget option, and may burn up a majority of your ad budget. But...consider long term signage, instead of post-and-run-repost types of bandit sign use.
For example, we have offered 'yard owners' in our farm $10 bucks a month to allow us to place bandit signs in their yards for 4 months straight (paying them all $40 bucks up front).
Owners may want to choose the spot you post a sign, but all you care is that the sign can be seen, and won't be removed by code enforcement, etc.
These signs need to look neat. Nobody wants a hand-scrawled 'I buy houses' sign stuck on their property, or strapped to their trees. Just saying. Show the owner the actual sign you want to post. You want 'corner houses,' not houses in the middle of a block.
Business Cards:Go to paper supply and get 100 sheets of hot pink card stock.
Print out 1000 business cards using WORD labels in Arial Black Font at 20 pts for the first line and 16 pt for line 2 and 3.
I Buy Ugly Houses...!
Call QuestForSuccess Today At
310-444-4444
You don't need anything more. Get rid of these like they were radioactive. Pass and post them wherever possible. Laundry mat bulletin boards, grocery stores, home improvement stores, restaurant bowls, dry cleaners, etc., etc., etc. I don't know how many to say to get out, but if you've still got any of a thousand cards left over by Thanksgiving you didn't put out enough cards. You can't pass out enough of these things. You just can't.
500 a month; 115 a week; 16 a day works. You've only got $400 bucks...
Phone/Voice mail: Answer the phone, or ‘have’ someone answer it every time it rings.
Sources For Deals;--Codes violations - County Recorder's office (City codes administration)
--Evictions (County court docket)
--Out of state/area owners (mailing list from title company is cheap source)
--Mechanics liens (County recorder's office)
--Property/Income tax liens (County recorder's office)
--Drive through farm looking for run-down houses. Leave a note on every door. Get the address. Send card with short, handwritten letter. I would like to buy your house. Please call me at [number]. Short and sweet.
--Take address of empty/abandoned houses (hardest to locate owners) and send letter to tax address with same verbiage you do for the run down houses.
--All free and paid classified ads
Get Your 'Office' Together:Gather all forms and contracts you think you need (get some carbon paper).
Yellow note pad
Fresh Blue Sharpie.
Fresh Blue pen.
Hand held Calculator with big readout
Thomas Guide or GPS
Business Cards
3-ring, zippered binder to hold everything together.
Advertising For Buyers (Gauging interest mostly):Start advertising a phantom, buyer finding, deal that is 70% off retail less repairs on every free online source in Housing for sale sections. Use Photobucket.com to populate your body text with picture of one or two run-down stucco boxes with no address, just ARV value, asking price, and non-refundable assignment fee. Put ALL these calls to voice mail and record name and phone number. Forget web page auto-responders and all the other shiny objects for now. We've got less than 60 days to pull this thing off, so we're keeping it all ghetto for now.
Property Data/Comp AnalysisCall title company salesman and introduce yourself, and ask for online property data access. They'll give you 30 free property data searches a month (Chicago Title is very investor friendly). Make sure they knew you will bring them all your business...
Meantime, other time-consuming, but free things to do...
Phone/Email Prospecting:Call/respond to all fixer ads on the free online venues.
I suggest you search craigslist for fixers, but eliminate brokers and agents.
Todd Toback suggested this...
Go to the "housing for sale" column in the search boxes. In the search boxes, enter
"fixer -agent, -broker" without quotes. That is you want ‘fixers’ to show up, but not listed with agents or brokers, thus the minus sign [ ‘-‘ ] in front of the words agent and broker.
This will give you all the houses that are advertised by owners that are fixers. Do this for your area/farm. You could Google "fixers+your farm" and see what comes up. You might find some fsbo sites come up. Search those the same way you would craiglist.
Anyway you're gonna be on the phone with sellers and taking names and getting information on property. You need the owner's name and the property address so that you can do a property data and comp analysis.
Property Analysis:With seller's name and property address, go online and look up ownership, purchase date, and comps. Normally I suggest you get to know the farm first, but you're gonna have to ride that cart backwards here for the time being, and get the leads and work backwards.
Now, if you can't find at least 3 closed comps within 10% of the subject property's square feet of living space, lot size, and # beds, you should normally pass on the deal, but you need experience talking with sellers, so go see the properties anyway, and learn to talk with sellers; realizing you don't have comps for this property. You can say so and maybe offer them a ridiculous, risk-averse, cash price that even a blind retard can recognize as a deal. Why not?
Negotiating in a Nutshell: I can't possibly explore all the negotiation gambits possible, just the generic ones, so get out there and scare up some prospects and let's get the ball rolling. November 25th is 55 days away...! That said, let’s explore some negotiating points...
Barney Zick used to advise the buyer to spend about 30 minutes letting the seller lie until the truth came out about why he was selling. Then the buyer could discern the offer to make. I use this approach myself. It gives me insight without being pushy, about the motivation level and options available to me. Some sellers can't sell to me, because they owe too much. But they would be happy to do a sub2 deal with me. In your case, this is NOT an option. Just 70% off for cash, less repairs.
The sellers will expect you to ask for the asking price on the phone, but some will not know what they want. Ask for their price, but don't try to pin them down on flexibility at this stage in the game.
Before you show up, calculate what Ron Legrand calls your MAO (maximum allowable offer) which is 70% of ARV. You won’t know what the repairs will be so just discount your estimate when you’re at the house negotiating. If you guessed wrong, you can back out of the deal, or renegotiate.
Later when you’re in front of the seller, you'll ask things like ‘how firm are you on that asking price’, etc. If they're firm and you know your market, and this does not represent anything close to a deal, then you’ve still got nothing to lose by making your MAO to them.
However, if he’s not firm, then you ask the seller what his best cash price will be? If it's close to your target, accept it slowly, so you don't spook the seller into thinking he's making a mistake.
If he is firm, and rejects you MAO, then walk. However, a great scheme I use, is to write the seller a friendly letter wishing them well, and including my offer to them again, ‘just in case they change their minds’. After a couple of failed escrow and the sweet taste I left in their mouth with my nice letter, sellers call me after deciding ‘I’ am going to buy their property for ‘my price.’
Meantime, you're going to chase dead ends on purpose, because you need both exposure and practice making offers and becoming more elegant in your pitch and negotiations. So, you'll look at 'everything' even if you know the seller is delirious. Hey, even a half-dead fish can still bite.
Finally, you're gonna be talking to sellers and offering them a cash price. You're not going to offer them sub2 deals, or lease/options. We don't have time to expand our specialty.
If you can't get things moving the right directions, simply wish the seller well, give him your card, and let him know you're ready to buy at 'x' price when he's ready to sell. Then get out of Dodge.
Don't bang your head on unmotivated sellers. That will discourage you fast, and wear you out to the point of putting a gun to your head.
Later, when you’ve reached your goal, you’re gonna have some money to work with, less time available, and a need to be more efficient at keeping the trash out of our net. We’ll talk about that after you get your first deal knocked out.
Meantime, you’ve got your work cut out. Notice the only major costs here are bandit signs and direct mail. Bandit signs will have a more immediate response, so that’s what I would suggest first.
Now, what I didn’t mention is that normally you would disqualify sellers as much as you could over the phone, so that you’re not having to drive all over kingdom come chasing loser deals offered by option-toting, unmotivated sellers, but you need ‘pitching practice’ right now. Later, we’ll talk about the natural disqualifying process we use to keep the time wasters at bay.
How’s that for a post?
P.S. Go read all of flippingjunkie.com’s post... This will be a true idea mine for you...
We'll talk about moving the property, after you get a property. It's not brain surgery, but it does take about 20 bandit signs and a voice mail box.
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