By: Stephen Cook
Since initially writing my best-selling home study
course on wholesaling / house flipping, I get an ongoing
stream of e-mails from people asking me a lot of the
Many of them are from nervous would-be house flipping
investors who are understandably anxious about making
those first few real-live offers. The idea of signing
their name to a contract is petrifying, and the images
of what they might be doing wrong are all too vivid
to the newby's imagination.
A lot of these emails go a little something like this
I recently looked at 20 homes for sale in my area. After
inspecting the houses, I decided to make 2 offers, but
in each case the seller's Realtor just laughed at me.
I mean, they really laughed hard! I'm not getting any
offers accepted and I'm becoming very discouraged. I
don't think that we have deals like you do where I live.
Can you help me? It just seems like most homes in my
area sell for the full asking price or more.
Looking at the facts in thsi email, its obvious to
me that "Discouraged Newbie" is making at least one
-- maybe even two mistakes I see so common to new investors.
The Elusive Motivated Seller
- Not targeting motivated sellers
- Not making enough offers
In my neck of the woods (Baltimore, MD area), most
homes tend sell for their full asking price and above
as well. It wasn't that way when I first got started
investing, but it's been a hot market for a good while
And while it can be a good deal easier for me to sell
a house than many people, I find that many people in
my area complain about not being able to find a good
deal anymore. With the market so hot, even a fixer-upper
can be sold at-or-near full value. So why would a seller
want ot deal with me, an investor?
Sounds like a picture similar to the one "Discouraged
Newbie" just pained, right?
Understand this: The only difference between me and
"Discouraged Newbie" is that I concentrate on the sellers
who are motivated to sell. I mean they have a REAL REASON
to sell, not just "want" to sell. And this reason is
big and weighty enough to make them willing to sell
to me for notably less than full price.
Typically, these are banks or individuals who have
a VACANT property which needs work. I stress the word
"vacant" for two reasons:
- Vacant properties are nothing but trouble for the
- 99% of the properties I have bought over the past
three and a half years have been vacant.
Now maybe you've heard all this before. Maybe you KNOW
you're supposed to only deal with motivated sellers.
But the problem is that you can't seem to lay eyes on
one. I frequently help people in our flipping homes
online newsgroup who feel this way.
Here's the secret: They're out there -- yes, even if
you're in a hot market like mine. You just haven't found
How do you find them?
- Be strategic, aggressive and effective. Have a specific
and proven plan for your marketing/deal-hunting approach.
And stick to your plan.
- Keep looking. A big part of it is a numbers game.
Many newbies give up just one or two steps shy of
the big deal they thought they would never find.
Even though I focus on motivated sellers, most of them
I speak to aren't typically motivated enough to actually
accept my offer. Get this -- if I make 30 offers, experience
has taught me my chances are high that in 27-29 of them
the seller is going to say "No," or someone else is
going to offer more.
That's right, I strike out much more often than having
a seller say, "Yes," to my offer. But I'm not concerned
about all of the, "No's." I accept them as part of the
process and forge ahead, knowing that if I make enough
offers someone is eventually going to say "Yes," --
particularly if my offers are targeted toward sellers
who have some degree of motivation.
It's truly a numbers game. Any salesman worth his salt
will tell you that -- and tha's just what you're doing
(trying to "sell" someone on the idea that you're the
best solution for thier house problem).
How To Keep Your Deal Funnel Full
In this business you cannot make money without inventory.
It is extremely important that you always keep your
pipeline of deals and potential deals full. And the
way to do that is to constantly make offers.
Many people come and tell me that they look at homes
all the time but never buy anything. They say they find
motivated sellers but none of their deals ever goes
through. My next question to them is, "How many times
have you put an offer on paper?" They are usually able
to counter their answer on one hand.
In order to buy properties, you must make offers. He
who makes the offers gets the deals. Sounds simple,
right? Yet it's surprising how many new investors I
see time and time again who are really struggling to
overcome this mental hurdle.
Personally, I average 40+ offers per month, sometimes
many more. Over the course of one weekend, I made about
40 and bought 9 houses on Monday. To this day, this
stands as one of my most productive offering sprees,
netting about 1 out of every 4 properties (each was
sold separately, by the way, not as part of a package).
And you know what? I never would have bought all of
those homes if I hadn't made those 40 offers. I would
rarely, if ever, buy anything if I only made one or
two offers a month.
Have you ever made 40 offers in a weekend before? Seriously,
you should try it. It's intense. It's a learning experience.
You need some rest afterward. But DID YOU HEAR THE PART
ABOUT ME BUYING 9 HOUSES! HELLO???
When Should You Make Offers?
Quick answer: Always.
That's right. Every time. Every SINGLE time.
When I look at 20 homes I make 20 offers, not just
2. In fact, sometimes I make 30 offers when I look at
20 homes. I make offers even on the homes I couldn't
get out to see. If I'm targeting the right properties
(i.e., those with sellers who may be motivated), odds
are in my favor there will be several of thsoe 20 sellers
with enough motivation to seriously consider my offer.
What I don't try to do is select who those 2 or 3 sellers
might be. Experience has taught me the chances of me
picking the right ones are fairly slim. And why should
I? Why take that chance? My low offers will fish out
the sellers motivated enough to respond and thereby
tell me where I should invest my time following up.
Too many wholesalers try to pick the motivated sellers
from a group by themselves when making offers is the
easiest way to find out. I make offers on every single
home that interests me if I even suspect the seller
might be motivated.
Some I inspect; some I don't. Some are priced ridiculously
high; others are priced ridiculously low. Some are in
great areas; some are in bad areas. Regardless of location,
condition or price, there is a number that works for
every home and that is what I offer.
Get this: On occasions, I've actually asked sellers
to PAY ME to take their homes! Why? Simple because no
other number worked for me. Sure, most of these offers
are rejected (just like most of my other offers).Even
on the weekend that I bought 9 homes, most (31 of 40)
of my offers were rejected. In general, though, some
of my offers are accepted, and those are the only ones
Your Assignment (You're A Wimp If You Don't)
Here's my challenge to you: Resolve that you're going
on an offer binge. Pick a weekend to sniff out possible
deals (i.e. potential seller motivation) and resolve
you're going to match my "40 offer extravaganza"!
Or go to two of your friends and tell them that you're
committing to making at least one written offer every
day for the next 30 days. Come on, even if you can't
do the weekend thing, you can handle one little offer
per day, right? And tell your buddies that they have
to confront you at the end of 30 days, and forcefully
collect $250 each from you if you've not kept your solemn
promise! Trust me. Do it, and see what happens.You'll
see what comes to the surface. Deals -- and probably
more than you bargained for.
Ok, I'm being a little cute with this. But I'm also
being serious. I hope revealing my "numbers game" to
you will inspire you to quit whining about the lack
of deals in your area and get out there and start making
more offers. If you make it your goal to make one good
offer a day, then the deals will come. Trust me. If
your offers are at the right price, then you will sell
properties and make a nice profit.
Do your homework, get your questions answered, and
overcome your fears. Then make it your goal to average
an offer a day because, as we all know, "An offer a
day keeps the bill collectors away!" - Happy Investing!
About the Author: Steve Cook
Since 1998 Steve Cook has flipped hundreds of
houses as an active Baltimore-area real estate
investor. Steve’s unique specialty is the “flipping
homes 1-2 punch”, a proven system of real estate
investing that powerfully combines wholesaling
houses. Also the founder of www.FlippingHomes.com,
Steve is dedicated to helping others in this thriving
online community succeed through understanding
and aggressively applying his time-tested, step-by-step
approach to flipping
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