How To Build Credibility With Buyers – Part 2

Last month, we started by talking about a couple of basics that are an easy way to start setting yourself up for success with Buyers.  Step 1 was Confidence and Step 2 was having an Online Presence.  Both of these steps are key because people make first impressions as fast as you blink your eye these days.  How you present yourself as an individual first is paramount.  People do business with people they know, like and trust.  The first two steps address this directly.  Let’s continue with the next steps:

Step 3: Have a Real Deal

It may sound counterintuitive but if you have been in this business for a while, you know there are people that literally sit at home or work, get an e-mail from another investor, do zero due diligence if they even read the e-mail and then just click the forward button to their Buyers.

This is a fantastic way to kill your credibility in one shot using the miracle of technology.  What makes it worse is there are times where the deal is not even under contract with the person sending the wholesaler the email.  Then as a ‘trust everyone is doing the right thing’ investor, you forward that to your Buyers.  I lost track long ago of Buyers that ‘do not like or see value in wholesalers’ because of this very thing.  

If you are going to forward someone else’s deal, make sure it is valid and verified under contract!  If it is a deal you are working on, make sure you first have a contract!  You may have the best of intentions however that doesn’t mean that a Seller can’t change their mind and with no contract, you can get your Buyer excited for nothing.  Not a good situation.

One more thing, some Buyers do A LOT of business.  Keep in mind you are not likely the only wholesaler they get mail from.  In fact, we all tend to know the same people.  It’s a small world.  Make sure you bring these folks only REAL deals.  I put this in all caps on purpose.  REAL deals is paramount to building credibility with Buyers.

Step 4: Do Your Due Diligence

I have a separate post on this coming soon.  However the point here is that when you send out deals that clearly do not make any sense, your credibility is shot.  Unrealistic repair budgets and/or unrealistic After Repair Value are the two numbers that usually are off time and time again.  As a wholesaler, you are no different than a Buyer when it comes to putting a property under contract.  The numbers have to make sense.

I have seen countless deals where repair estimates are grossly off.  And by grossly, I mean tens of thousands of dollars.  Do yourself a huge favor and hire a contractor to walk the house.  If you stand to make 5 or 10k on a deal, the ‘pain’ of spending 100-200 bucks to have a contractor walk a property to give you a valid repair estimate is incredibly reasonable.  Not to mention the invaluable education you get through experience and perspective.

Same for ARV (After Repair Value).  Use valid, verified comps from the MLS.  Sure there are tax record comps.  Sure there are off market comps.  However, MLS comps trump all again and again.  Why?  Because almost all of your Buyers will use a realtor that will check the MLS for valuation for their client.  The numbers have to not just make sense for your deal but down the line as well.  
When a Buyer sees you have done your homework on a deal, you will gain their trust.  They may or may not agree with your exact numbers. However, if they can see how you came up with them is reasonable, you will gain their respect nonetheless.

That’s it for this month.  Next month, the final two steps!  See you then.