Wholesaling/Flipping Ugly Houses: Someone's Always Waiting

Ron LeGrand

Feb 26 2011

Someone's Always Waiting

Wholesaling/Flipping Ugly Houses, part 5

by Barbara "BJ" LeGrand Cockrell

Some will.. some won't.

So what? Someone's waiting.

Words to live by in the wonderful world of wholesaling and foreclosures. I ended last week's article asking, “So, how are your assistants doing at filling out the property information sheets?” And no matter how that's working out for you, whether you've gotten yourself some assistance or the right person's still to be found - meaning it's still all you right now - I can only offer you these words of encouragement: Take heart. Persevere. We've all been there.

Expect that some assistants will quit on you and some will need further training. Nobody prescreens prospects expertly from the get-go. We all need to learn this skill and then pass it along to those we hire. This is where perseverance comes in. Have the confidence to continue if the first FSBO investigators you get flake out and don't do what they say they will. Wow.. imagine that? It's happened to me, too; but, I won't let them steal my dreams. Don't let them steal yours.

With a little training and varying degrees of chaos management, you'll soon master this craft, develop some grit, and the leads will flow and so will the money. Remember, you should have enough information within the first two minutes of a conversation to know if the deal is worth pursuing.

Actually, you have already done most of the necessary prescreening if you've followed the previous steps Ron's laid out for you in his training. A good prospect to be purchased wholesale will have the following components:

• Probably vacant (not mandatory)
• Probably needs a lot of repairs (not mandatory but these are usually good prospects)
• Asking price is at least 30% below ARV
• Has a lot of equity or is free and clear (mandatory unless you intend to short sale)
  • At least 850 square feet and preferably 3 or more bedrooms

There are many sellers out there with free and clear properties. Here is a script for prescreening FSBO's that appear to be free and clear or with small loan balances:

“[First Name], if I pay you all cash and close quickly, what's the least you can accept?

(Regardless of the answer): Is that the best you can do?

(Regardless of the answer): So, you're saying that if I don't pay you [$$$ Amount], then you won't sell me this house?”

• • If you like the answer, get a contract
  • If you don't like the answer, leave the door open: “Well, I'm sorry but I just can't pay you what you're asking. Let me know if things change.”
    

Just remember, you are the one in control. Don't beg or plead with anyone. Make the call or get an assistant to do it, and motivated sellers will surface quickly. If speaking to people is a problem for you, get someone else to do it or make offers only on listed junkers. This way the agent makes the contact with the seller.

Before proceeding to the next step, you should have a pile of prescreened prospects from a heap of suspects. If not, it's better to stop here and keep looking than get beat up by an unmotivated seller. The ARV is easy to obtain and on listed properties the agent will get it for you.

One more thing about unmotivated sellers and your dealings with them..

Ron will tell you that brand new real estate entrepreneurs let themselves get beat up all the time by unmotivated sellers. New to the game and trying to stay positive, they're ill-equipped to deal with what may become a series of rejections; and, soon, the “can do it” attitude fades as one too many rejections convinces them that there just are NOT any motivated sellers out there. Baloney! Don't let this happen to you.

Success can come in the very next call. Real estate is truly a numbers game and there are plenty of prospects in this economy; more, in fact, than you could ever come in contact with in a lifetime of looking! But only if you're looking in the right places and at the right prospects.

Remember, it only takes one little wholesale deal to put several thousand dollars in your pocket. Once you master these steps, you can do several deals per month or just an occasional one. It all starts with locating and prescreening prospects; and, here's an absolute truth:

ALL BUSINESS STARTS WITH LOCATING AND PRESCREENING PROSPECTS;

AND, ALL BUSINESS ENDS WITHOUT THEM!