Now answering calls 24/7 

How To Make (& Calculate) Your Wholesale Real Estate Offers

Want to get more wholesale deals locked in this year?

If you’re generating leads but can’t seem to get many past the goal line, chances are, you’re pitching it the wrong way.

And if an investor can’t see the value in what you’re bringing to the table, the chances of them wanting to take your assignment are pretty slim.

Unfortunately, pitching a deal the wrong way is something that holds way too many wholesalers back.

In this guide, though, we’re going to teach you how to make your offer while wholesaling real estate so you get more investors to say yes — and, even more importantly, get them calling you back wanting more.

By the time you’re done reading, you’ll know how to expertly pitch the deals you’re getting by showing the value that’s in them instead of just laying another contract on an investor’s desk and hoping for the best.

And it all starts before you even get the assignment contract.

How To Perform Due Diligence

One of the biggest reasons an investor will refuse to take your deal (or your calls if you keep showing up with bad deals) is by either failing to perform due diligence or missing something when you do it.

Since investors tend to be more savvy than wholesalers and won’t just throw their money at something because you bring them a contract, they will usually uncover things you missed.

When they uncover those things, it looks incredibly bad on you.

Not only will they refuse to take that deal from you but, if you do it enough, they’ll just stop taking your calls and you’ll be forced to find other buyers.

Instead of relying on an inexperienced investor to get suckered into a bad deal, it’s worth learning how to do your own due diligence so you know you’re bringing something great to the table.

Unfortunately, though, this is a step that most wholesalers either skip or just aren’t well-versed enough to understand what they’re looking for.

And when it comes to doing proper due diligence (so your investors actually see a good deal) is understanding the financials behind it — and any potential legal ramifications.

Financial Due Diligence

Before you make an offer on a property, one of the first things you need to understand is whether or not the offer you’re making leaves any meat on the bones for your buyer.

If you go in too high and leave the buyer with minimal room to make profit, they’re going to say no.

To do that, you want to first take a look at the location of the property you’re trying to get under contract.

Is it in a high-crime area? Does it have access to schools and shopping?

What do the properties around it look like? Are they kept up? Is the area growing?

Is it more desirable for renters? Or are people taking out mortgages for homes in the area?

Unless you have investors who are OK with buying properties in high-crime areas or who focus their business on growing a rental portfolio, understanding the location can save you a ton of headache.

Spend some time driving around the neighborhood (if you can) before you make an offer.

Then, look at what the property is actually worth compared to other properties around it.

What work does it need to get it brought up to the true after-repair value and make it competitive with other properties selling in the area?

Ask the seller about the condition of the property, how it was maintained, if they know that it needs any repairs, especially big ones like a roof or heating/cooling system.

Then ask about the interior and exterior. Have they recently performed renovations? Or is it going to need a full gut and rehab?

The answers to all of these questions will help you determine how much money your investor is going to have to put into the property.

It will also help you understand how much you can offer while making sure you’re leaving enough room for your investor to profit after performing those renovations.

And that’s the first step in giving yourself an opportunity for your investor to actually say yes.

When you understand the financials involved with the deal it makes it a lot easier for you to pitch the potential inside of the property when you’re putting the deal in front of investors.

Legal Due Diligence

The next step is making sure you aren’t putting any potential legal pitfalls in front of your buyers.

If the property has existing liens on it, you need to make sure you understand what they are, why they exist, and how much it will cost to get them cleared up.

Not knowing this and then putting a deal in front of your buyers could end up irritating them when they start doing their own due diligence and uncover legal issues that you weren’t aware of.

While some investors may move forward on the deal, depending on what the liens are, a lot aren’t going to want the headache that comes along with it.

And once they get put into a position where they’re wasting time uncovering things you should have known about, it starts to look bad for you and future deals you try to bring to them.

Do it enough times and you won’t get an opportunity to pitch them a property again.

To understand if there are any legal issues with the property, you can contact your local tax assessor or run a title search through a local title company.

Those will both uncover whether or not there are any issues with the property.

Then, once you know what’s involved with bringing the property up to market value, you can start looking into the type of offer you can make.

What’s The Property Actually Worth?

As you’re thinking about the offer you’re going to make on the property, you want to take into account making your own money on the deal, but you also need to think about your investor’s profit.

If you want to go the extra mile and make sure what you’re offering up to your investors is worth what your seller is asking for, you can do 2 things: an inspection and a scope of work.

Inspections

A professional inspection isn’t necessarily required on a wholesale deal, however you do still want to attempt to walk the property and look for things most inspectors would look for.

This will help you uncover whether or not the homeowner was either missing something or trying to hide it completely while also helping you come up with a reasonable list of repairs that need to be done.

When you’re inspecting the property, you want to look for electrical and plumbing problems, pest infestations, water damage, mold and mildew, or other issues that could point signs to something major going on.

Ultimately, it’s up to your investor to pay for a professional inspection if that’s the route they want to take but you do want to perform as much due diligence as possible.

Because, remember, when it comes to offering your wholesale deal, you want to be armed with as much information as possible.

Not only does it make you look more professional but it helps you figure out how much you should be offering the seller.

Scope Of Work

As you’re walking the property you can put together a rough scope of work to help let your investor know what may be involved in rehabbing the property.

It may not necessarily be 100% accurate without a deep (or professional) inspection but can be a good starting point for buyers who may want to take the contract from you.

But it also gives you some negotiating power with your sellers.

When you know exactly what the property needs to bring it up to market value, you can start negotiating down the offer you make and back it up with specifics to show why you’re making that offer.

What Does The End Deal Look Like For Investors?

After you’ve armed yourself with the right information, the next step in making your offer on a wholesale deal is understanding who you’re going to pitch it to.

If the area you’re canvassing is full of rental units, you want to make sure the deal you’re doing will make sense to an investor who is focused on building a portfolio of rental properties.

On the other side of that, though, if the deal has enough room to fix it and then flip it, you know you can approach investors who have a history of fix and flips.

A big part of getting your deals done, though, revolves around pitching the right deal to the right investor.

While a lot of investors will entertain just about anything that comes across their desk, if you want to get the deal done quickly, you want to have an idea of the type of investor who would buy it before you start.

How To Make Your Offer To The Seller

Now comes the fun part: making an offer to the seller based on what you’ve uncovered.

In this stage, you want to negotiate on facts versus feelings.

Your seller will more likely than not be emotionally attached to their offer which means they’ll probably have an inflated sense for what it’s actually worth.

It’s your job to get a deal on the property that leaves enough room for your buyer to make money, too.

By negotiating on the facts you’ve uncovered (and backing those facts up with prices), you can make a case for why your offer is a legitimate offer — and why the seller should take it.

Now, if the seller isn’t willing to meet you at your maximum offer (and you know it’s a legitimate maximum), there’s no shame in simply walking away from the deal.

Sometimes, after a bit of time and distance, the sellers will reach back out to you.

The key, though, is not letting yourself get attached to any deal that won’t help you make money while also giving your investor a chance to make money, too.

How To Make Your Offer To The Buyer

Once you have a property locked down and a contract signed, the next step is putting the information you’ve uncovered in front of potential buyers.

If you’ve uncovered a truly good deal, your job is 90% done and the deal should, realistically, sell itself.

If you’re approaching an investor who focuses on rental properties, position the deal as a rental. Vice versa, if you’re approaching an investor who focuses on fix-and-flips, show the potential to make money.

Show your buyers that you’ve performed proper due diligence and let them know what the property is worth. Then tell them what they can buy the contract from you for.

How To Get In Front Of Better Deals (And More Of Them)

And if you’re looking to get in front of more prospects so you have more opportunities to find (and create) great deals that are easier to pitch, using a combination of direct mail and a call answering service can be the biggest growth strategy you tap into.

With a direct mail service like Ballpoint Marketing, you can run campaigns that have sellers reaching out to you wanting you to make an offer on their property.

Then, with Call Porter, you can have your calls answered for you so that warm appointments are booked to your calendar and you’re not having to answer calls while you’re at dinner, in the shower, at the gym, or any of the other random times that prospects love to call.

If you’re looking for more opportunities to make offers, get signed contracts, and close more deals, the combination of Ballpoint Marketing and Call Porter has been proven to deliver.