Knowledge Will Make You A Ninja Wholesaling Negotiator
Getting started in the real estate investing business can often get overwhelming when there are so many options; flipping houses, short sales, or buying foreclosures to resell or to fix up or rent out.
The best real estate investing path or strategy for you will depend on your personal goals, resources and talents. However, no matter what your long term plan is, wholesaling may be a great way to kick start your real estate investing career.
No matter the strategy that you choose, you will have to learn the art of being able to negotiate with both sellers and buyers. While negotiating is an art and often takes years of studying and practice, here are a few suggestions that will help you when it comes to negotiating with your buyers.
Know Who You Are As A Wholesaler
When Wholesaling Properties, remember that you are the middleman
Another investor who is looking at buying your wholesale deal will observe you as the middleman. You are essentially the middleman between the original seller and the end buyer. Essentially, your job as the wholesaler will be to find and quickly sell a property for a respectable profit margin.
There are two methods in which you can do this as an investor:
- You can either sell or “assign” the purchase contract to an end buyer.
- You can close on the property and immediately resell the property to another investor in the form of a “double close” or “simultaneous close”.
If you are already confused, you are not alone. You may need to start here in these articles and even look into signing up for one of our coaching programs to start building your foundation of knowledge. Once you have some form of real estate coaching under your belt you will begin to get a real feel for it. This will help you to really begin to improve your skills, and finally start making money.
Know & Understand Your End Buyer
Knowing Your Retail Buyer
The retail buyer is the end buyer who is buying the home as a long-term investment and they will take every step that is available to protect their investment. More than likely they will want a home inspector to go through the property and inspect it for them. It will cost them some money but they will uncover any problems such as structural damage or ground contamination before they buy it.
The Rehabber Investor
Rehabbing allows for the largest profit margins, as it allows an investor to sell the subject property at full market value. A rehab involves purchasing a house, renovating it and selling it for more than the original investment costs (purchase price and repair costs). Most rehabbers will want to buy the property from you by applying this formula: (70% of the Market Value – Repairs = Purchase Price). The lower percentage they can buy the house at, the better for the rehabber’s bottom line.
- Make sure you shop around when looking for buyers to buy the home. You don’t want to jump on the first offer when there may be a better one right around the corner. Also make sure you have all terms of the buy side and sell side in writing. Despite our desire that everyone be completely honest in their dealings, you’ll find that some sellers will be dishonest in negotiations or what was agreed upon and some investors will try to sneak in hidden fees.
Do Your Homework For Better Wholesaling Negotiating
Knowing What Your Buyer Wants
Three Big Secrets to Negotiating The Deal
One of the biggest secrets to being successful as a real estate investing wholesaler is to know what your end buyer wants before you start.
- Have a thorough conversation with your buyer to find out exactly what they are looking for, what they want to pay, and what their end result will be.
- When talking to your end buyer, use direct questions to get a direct yes or no answer. This will help you find out exactly what your buyer is looking for.
- The better you understand what your end-buyers are looking for, the easier it will be to target the right properties and price them to sell quickly to people you know are in the market for that type of deal.
If wholesaling is a strategy you feel is right for you because perhaps you prefer not to stay in the middle of transactions and simply want to sell your contracts for a quick fee, then we’d love to have you join us! For under $100/mth, you’ll learn Four (4) No Money Down Real Estate Investing Strategies (including wholesaling) so that you can better evaluate the deals you come across in order to make maximum profit!