Times they are a changin'.
Whereas in 2005 finding a buyer for your wholesale deal was easy, we are now faced with a much more challenging predicament. I have personally coined this annoying situation as “Reality.”
“Reality” sucks. We all know this. Normally I can effortlessly bend it to my will, but it's actually putting up a pretty good fight this time. You see, what I want it to do is put things back the way they were a couple years ago. A couple years ago, if I so much as sneezed I would have rehabbers (buyers) lined up around the block thinking that was a secret signal that “the deal was in,” or something. Here's a typical scenario from “back in the day” (which was a Wednesday by the way):
Rehabber #1: He sneezed. It's on!
Rehabber #2: Oh hellz yeah. It probably has at least $9,000 of equity in it just like the last one. I'm paying cash.
Rehabber #37: You guys are idiots. He has a cold. It doesn't mean anything (as he secretly shimmies his way closer to me while butting everyone else in line).
Rehabber #1: How do you have that much cash?
Rehabber#2: I refinanced my house and pulled the equity out. Duh. Where does anyone get money from these days? Idiot. I bought my house in 1999 for $125,000, and it just appraised for $750,000. I did a 125% LTV cash out re-fi with negative amortization at .0027% APR so my payment is only $1.75 a month. They wrote me a check for over $600,000. Cool huh? Have you seen my new boat?
Rehabber #1: But you only make $35,000 a year as a fire fighter.
Rehabber #2: I know. Isn't America amazing? I love this country. My payment goes up to like $19,000 a month at some point. I forget when. I'm sure it'll all work out. I think I'm gonna bid $10,000 over the asking price to make sure I get this one.
Ah the glory days. I'm not gonna lie – it was fun to be a wholesaler back then. And you know what? It's still fun! We simply have to adjust our sails and do things a little differently is all.
Up until about a year ago, the only thing I did to sell my properties was blast out an email to my investor's list. That was it. I would then choose between 19 different offers that I would receive on each deal. I'd always pick the buyer who I felt was going to be the least amount of hassle (namely – whoever was paying cash and closing quickly).
This is not enough anymore.
The following is exactly what you must do if you have any hopes whatsoever of making big money wholesaling real estate in this current market:
Create A V.I.P. Program For Your Buyers And Let Them Know About It
People love to feel special. I know I do. And they love to feel special because they are special. If they were hairy monkeys, they would love to feel like hairy monkeys. If they were squishy jellyfish, they would love to feel like squishy jellyfish. But they are not hairy monkeys or squishy jellyfish. They are special humans. And if we make them feel like special humans, they will like us more and be more inclined to buy.
Call All Your V.I.P. Members In Advance On All Deals
This is a pain, and it almost qualifies as work in my book, which is why I never used to do it. But oh well. We gotta do it if we want these houses sold.
The way a buyer gains membership into your exclusive V.I.P. program is to simply buy one of your properties, and close on time. That is it, and that is all. Simple enough? I have people all the time ask me to call them in advance when I get deals in. Well tell these people that you only do this for your V.I.P. members. Explain to them how they can be a part of this elite group. Explain to them that they are currently very “un-cool” by not being on your V.I.P. list. Show them how to be cool.
Give Your V.I.P. Members A Discount
Here is how it goes: You get a new deal in-house and decide you want to make $12,000 on the flip. Your purchase price with the seller is $100,000. Before blasting out the email and whatever else it is you are planning on doing to market the property, you call every single person on your V.I.P. list.
“Hey – Sam! Sammy Sam! Sammaaaayyyyy! What up, Dawg? Listen, I got this new hot, hot property that you have got to check out asap. I'm going to start marketing it tomorrow, but I wanted to give you the personal heads up because you're fabulous and I love you more than all the rest. It'll be sold for $115,000, but we'll give it to you for $112,000 since I know you can close quick. Check it out and get back to me, alright?”
It's just that simple. You will sell more properties this way. Trust me. People are more apt to respond to a personal “insider” phone call about a “new” deal than they are to a mass email that goes out to 2000 people.
Make it happen.