Wholesaling Houses: How Fat Should Your Buyer Info Packet Be?
Are you self-sabotaging your deals by providing too little information to prospects when wholesaling houses, or is overkill draining your potential profits?
How detailed should real estate investors be when preparing marketing and presentation information or packages for potential end buyers when wholesaling houses?
Wholesaling houses is very simple as a concept; buy low – sell low. It’s actually one of the easiest, most straightforward and low risk ways to make money fast in real estate. Yet, there are a few sticking points which catch many off guard and cause a lot of confusion, and even more debate. One of these which is often overlooked at the beginning by new wholesalers is how much information and detail they will provide when presenting the opportunity to prospective buyers.
So is a simple email with the basic numbers enough, or should you be investing in and compiling a hefty packet full of details, due diligence and projections based on every possible scenario?
Some buy and hold investors and rehabbers love to complain about wholesalers in online forums and give them a hard time for making so much money with less effort. Some of them rant out of jealously without intention of ever giving any of their business while others just want to shift more time and expense onto the wholesaler. So their comments should be taken with a grain of salt.
Recently one wholesaler laid out her list of items provided as including:
· A thorough 45 page home inspection
· Estimate of repairs
· Independent appraisal
· Title search and lien information
· Tax information
· Analysis of all carrying costs including utilities
· Information on additional resale services after property is rehabbed
Most would consider this overkill. It may definitely look good and thorough, breathe credibility and diligence, but no doubt is duplicating work and adding an extreme amount of time and cost to each deal.
Keep in mind that most end buyers are going to do all of their own due diligence. They don’t trust wholesalers and sadly in many cases they have been proven right in not doing so. So why throw away money which the end buyer is not going to really use and only pay for again; eating up hundreds and thousands in potential profit?
An estimate of repairs and reasonable basis for estimate of ARV (after repair value) is normally expected. Of course many very widely on how detailed they think repair estimates should be. For the sake of repeat business consider that under promising and over delivering on value is probably the best practice. Whichever why you go remember that accuracy is critical, and you won’t be forgiven for hiding big repair costs.
Of course, on the other end of the scale many have been incredibly successful with providing a simple one sheet listing and property data form, or even less.
So find the right balance to meet and exceed expectations without incurring waste, and keep tweaking as the market demands it.
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