Advertising Your Deals To Buyers – Do’s And Don’ts To Always Apply

As an active investor, I get a ton of deals regularly from other wholesalers especially with springtime rolling in. They come in all sorts of shapes, forms, fonts, graphics and so forth. While they all have a variety of information, it is rare that ads come with enough information to make a decision on whether it is worth spending time on them. So as a Buyer as well as a wholesaler, I thought I would share some do’s and don’ts to apply when you put ads out to your Buyers to set yourself up for success.

DO’S

DO put the address – I am amazed at why anyone would think I would look at a deal without an address but it happens.

DO think like a homeowner wanting a perfect house to describe repairs – This is what your Buyer is going to be aiming for. As an example, you may be ‘ok’ with the minor carpet stain however that won’t cut it when your Buyer’s Buyer will want new carpet. Description trumps number estimates since each Buyer has their own contractor with their own pricing.

DO give comparable sales that make sense – radically mixing styles of homes, comps that are too far away for the geographic area, large square footage differences, ignoring unique features such as lakefront, acreage and many more considerations can radically affect what are the best comps.

DO leave room for your Buyer to make money and feel good about it. If it is a rehabber, a common figure I have heard is they want to make at least 15% on their money. If they can’t make that on the deal, your price is probably too high. If your Buyer is a landlord, make sure the Cap Rate makes sense. 15% Net and up is a common goal for landlords. Leaving ‘meat on the bone’ also ensures your Buyer may buy from you again!

DO create a template for your ads so they all have the same format every time. Consistency breeds success for you and your Buyers!

DON’TS

DON’T send an ad out that looks something like this:

Fantasic deal! Will go fast!

Purchase price: $100,000 Repairs: $39000 ARV: $180000 Profit is $41000!!!

This screams lazy, ignorant or both and I have seen both often and let people know to please provide an accurate big picture. A rehabber is probably going to sell their deal on the MLS. They will have to pay 6% in commission, many times up to 3% in seller concessions and another 1% in ‘things’ that come up, such as home warranties and additional work to satisfy an end Buyers home inspector. That’s 10% off the list price. In the above example, the real profit drops to $23000 when you factor these costs in. This assumes your Buyer is using their own cash and not private/hard money. If private/hard money is being used, there is a cost to that capital as well further diminishing profit. Consider this up front!

DON’T send ads out without pictures or a link to them.

This is very unhelpful except in rare situations. People expect a visual representation up front to know what they are looking at. Give it to them. The more the better.

DON’T send out ads without at least two ways to get in touch with you. Phone and E-mail are expected so provide them. Real business still gets done over the phone more than electronically far more often than not.

DON’T ever try to hide something in the deal and paint a prettier picture than it is. This business is a small world. Word gets around fast. Always send your deals out disclosing everything you know about it with integrity.

DON’T try to force a bad deal. Encourage your Buyers to make offers. It is ok if you have to renegotiate with the Seller if all the offers you are getting are lower than what you can do. Learn from your Buyers but make sure they give you specific reasons why their offer is what it is so you can leverage that knowledge with your Seller. We have renegotiated many deals successfully with this kind of information creating win-wins all around.

DON’T ever put out deals you do not have under contract and say you do. A fast track to getting blacklisted!

Putting out ads that make sense can net you some nice profits. A little more work is required up front. However, if you setup a template that makes sense, you’ll always know what you need to provide to give your Buyers a consistent experience with your deals. You’ll find yourself at the closing table more often as a result. Repeat business is a wonderful thing so get out there and earn it!