10 Things Amateur Wholesalers Do That Kill Deals

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Transcript

Why Closable Deals Still Die

SPEAKER_00 0:00

And today we're going to be talking about the 10 things that amateur wholesalers do that kills deals. Now, this is not the only thing that amateur wholesalers do that that causes them to lose deals. It's just honestly 10 things that I see time and time again that is costing newer wholesalers deals. And then they want to point the blame somewhere else. Lead generation, it's got to be the process. Maybe it's just too saturated. It's got to be something else other than the actions that the wholesaler themselves are taking. And so today we're going to go through these because I feel like if you're newer in wholesaling and you're getting to the point where you're starting to get properties under contract, but maybe you're struggling getting them to the closing table. If you were to pay attention to these 10 items, these 10 actions, you would eliminate the majority of your terminations. Now, this isn't when something out of your control happens, right? There's a title issue, there's a$200,000 judgment that comes along that kills the deal. Those are things out of our control. I'm talking about when it's a deal that is closable and everything that takes place is inside of your control and it still doesn't make it to the closing table. Those are the specific types of deals that I'm talking about. So let's get right into it. Let's start off with number one lack of consistent follow-up with leads and sending contracts. So this is when we get leads and we start having conversations with sellers, and we are either sending contracts or we come to some sort of verbal agreement, but they need to talk to a spouse or a sibling or an attorney or a realtor, the follow-up just completely falls off. This is how much uh today's video is based off of the stories that Cassie and myself hear. Just yesterday, Cassie was having a one-on-one with someone inside of Tu, and they were talking about they're they're sending contracts, but then because of life, they're they're not following up with the sellers and finding out why the sellers are not signing the contracts, and then we're wanting to know why we're not getting deals. This is the first area in which newer wholesalers, amateur wholesalers are killing deals is by not picking the phone up and consistently following up with these sellers to find out what is taking place. Because inevitably, what does happen is a professional wholesaler comes along and does follow up with that seller and gets the signed contract, and then the newer wholesalers look around, they say, Well, it must be something else. It's not me, it absolutely is you when it starts right here. And it's not just when we send contracts, it's when we have a conversation, and for whatever reason, the seller cannot come to a yes or no on that initial conversation. This is going to be the vast majority of your leads in your seller conversations. Not all of them are going to end up in a one-dial close. And so your ability to be consistent and to follow up is imperative. Just 20 minutes before going live here, I saw a seasoned veteran inside of TU who said he was heartbroken because he just lost a deal that he had been following up with for 16 months. 16 months. It was a probate deal. The sellers didn't want to sign anything until probate was completed. It finally got completed, and he had been following up and he had had a belly-to-belly appointment, built great rapport with the sellers, and everything seemed fantastic. Like they were going to move forward with signing a contract with him. But then at the last minute, they didn't, and they decided to go with someone else. And so I responded to him. But this is what I love about his response because he is a seasoned veteran. Instead of looking at the outside circumstances that could have impacted this, he looked at it and he said, You know, my issue was my follow-ups were solely text messages. I should have been picking the phone up, I should have been calling these people because we built great rapport in person. But time passed, and time kills all deals. And so, even though the follow-up was strong for 16 months, it wasn't good enough, and that's what ends up costing us deals. Someone else came along, offered more money, and the rapport went out the window. It was irrelevant at that point. It was about hey, the sellers were going to take more money, and they did, despite the fact that he was following up consistently. Why? Because it's easy to ignore the text message, it's easy to not know what is actually happening when it's only a text message and not consistent phone conversations, knowing where sellers are in that transaction. So, number one, lack of consistent follow-up before even getting a signed contract. Number two, once we're on the phone with sellers, the majority of newer wholesalers make each seller conversation, each seller call mainly about numbers, price, rehab, condition. This is a consistent flaw of new wholesalers. And it's because the majority of you are worried about your comping and underwriting skills, rightfully so. Unfortunately, despite the fact that you're making it a priority on these conversations, you're still not good at it. So, why in the world would you want to prioritize that in the seller conversation? Why would you want to make that what you're really talking about? Price, rehab, and the condition and going into all these numbers instead of prioritizing what's the most important thing on the conversation, which is the seller's motivation and the seller's problem. What problem are they trying to solve by selling this piece of real estate? What has motivated them to sell this piece of real estate? Once you understand that, you can resolve that issue by buying the real estate. And at that point in time, the numbers almost become irrelevant because you're truly finding out what they need, not what they want, not what you want. You can actually just diagnose it and say, I'm the right fit for you. This is what I could do, and it would resolve all of your issues, or this is what I can't do. Yet we don't want to ask those questions. We want to sit there and we want to talk about the condition. And when was the last time the kitchen was rehabbed? When was the last time the roof was replaced? Which honestly, you're probably not going to be good enough at analyzing that, anyways. You need to be super conservative with your after-repair value, super aggressive with your rehab, and hopefully you land somewhere in the web where the end buyers are buying to where it can be a wholesale deal. But if you prioritize the seller's motivation and problems over making every conversation just about numbers, and when I say making the conversation about numbers, I'm talking about hey, are you still looking to sell that property? Yes. Awesome. How much are you looking to get for it?$100,000. Well, tell me a little bit about what you got going on. Seller gives you a response. Well, can you tell me about the condition? How'd you come up with that price? How much rehab do you think I need? How much do you think the property would be worth once we fixed it up? Do you think you can go any lower than that ASCII price? It's all about the numbers. That's all it's about. And that is a poor seller conversation, and it does not lead to results. And so the reason why I put this on here is because it's like, well, RJ, how's that killing deals? It's because you are literally killing the deal before you even had the deal, because your conversations are solely about numbers, money. The majority of sellers are not solely motivated by money. If you feel like they are, that's because you're having bad conversations, not because you're just unlucky and only speaking to sellers that are motivated by the sales price. Number three, somewhat in the same lines as the last one, but you are too concerned about the condition. And here's where it's a mindset shift for you guys. If you are a virtual wholesaler and you're doing all of this over the phone, you're buying a house essentially sight on scene. Now, we're going to find out about the condition of the property just through the conversation. But if you get super detailed about the condition of the property, wanting to know each and every little line item that could possibly be going on, the age of the HVAC, the roof, when was the last time the floors were replaced, the kitchen, the bathrooms, the walls, all of that, you are essentially handing over any potential leverage that you have later on about undisclosed rehab needs and the ability to renegotiate that contract. And you're sitting there and you're taking the seller's word for it instead of getting pictures and getting buyer feedback of what they need to do to the property to achieve whatever value they want in the future. So when you become overly concerned about the condition, you think you're doing a good job. You're doing all of your due diligence in order to analyze this deal. But again, you're not prioritizing what's important to the seller. I very rarely listen to a seller conversation where the conversation is centered around the condition of the property, and here and sense in the tone and the way that the seller is speaking, that they feel heard and understood because you asked about the age of the roof or the HVAC, or trying to understand every little nitty-gritty detail about the condition of the property. And again, that's just should not be a part of your process if you are a virtual wholesaler. It should be like we're making very solid assumptions based off of the age of the property, based off of what we can see the property looks like from the exterior, and then what the seller is telling us on the phone. But it should be just a generic answer from the seller. Once we get into getting every last little detail, that's where the seller calls fall off the rails. And rarely do they end up in signed contracts. So again, your concern about comping and underwriting and condition and understanding all this is killing deals. Number four, not setting proper expectations with the seller as to what happens. So this is now moving forward. We're going to be talking about we actually have a deal, we actually have a signed contract, and now deals start falling apart. So setting the expectations of what this process is going to look like. And it's this is very common with laydown or deals that are heavily negotiated. So a heavy negotiation, you get them to verbally agree to the price, you even get them to sign the contract, but you fail to set the expectations of what's going to be happening. And so what happens is one of two things. Either the seller has seller remorse because they don't know what's going to take place, so they start questioning it. Maybe they even have to answer to someone else in their life where they say, So what are the next steps? And they're like, I don't really know. I just I signed a contract, but I don't really know what's going to happen next. Or it gets to a point where you need to renegotiate the contract, you need to gain access to get pictures, you need to let your buyers in to see the property, and the seller starts raising red flags at going, Whoa, what's happening here? I wasn't under the impression that this was going to be taking place here, and that is a massive issue, and it goes back to that initial conversation when you get them to sign and agree to the number and sign that contract, setting the expectations. When do we do that if you're using the closure formula inside of the reverse rapport section? Breaking that down and then asking them at the end, do you have any questions about what's going to be taking place moving forward? Many times sellers will have questions, they'll want to know. So, how many times are you going to come see the property? How are you going to gain access? What are the pictures for? What are the buyers going to be coming out? What are I speak to them or do you speak to them? Setting those expectations when it's properly set with transparency and honesty, it's very, very simple to lay it out and then not have any concerns come up from the seller post-signed contract. But if you're just rushing through this, or if you not practice what that process is, or maybe you don't even have a process, so you don't know how to explain it to the seller? That is a massive problem. But many, many deals get terminated because the seller decides to change their mind, and it all can go back to did you set the proper expectations? What about them signing a contract suddenly changed the next day when they nothing in your sign changed? What changed in their world? Many times it's that they just flat out did not know what was taking place. Number five, you do not gain access to the property quickly enough. It is shocking how much of a problem this is when someone will get a signed contract on Tuesday, and then Wednesday, Thursday, Friday, the weekend passes. We still haven't gained access, we still haven't got pictures of the property, and we're waiting on someone else to control our destiny with the deal. It's mind-boggling, it happens all the time. We get submitted tons of JV deals where it's like, hey, I got this property under contract, I don't have pictures yet. Can you go ahead and analyze it and see if you'd want to dispo it? Well, no, we can't do that because we don't have pictures. We have no idea if the numbers are correct or not. We need to be able to actually look at this to see what number we could market this property to our end buyers for. We need to reverse engineer those. And then it's a week goes by. If you're signing a contract where it's gonna close in four weeks and you're wasting 25% of that time to gain access and to get pictures, you are not going to be successful. It just can't happen. Now, I get it, there's times where it's out of your hands. The seller causes that issue. But what solutions are you providing to the seller? If we're just solely waiting on them and saying the seller's a tire kicker and they're just kicking the can down the road and they're not getting me the pictures, then you're literally saying I am okay with this seller who is in a distressful state for whatever reason, probably has a ton of shit going on in their life. I'm gonna let them control whether or not I make money or not. No, that's inexcusable. That's not something that you can do. You have to sit there and be able, like, I'm going to control this. We're gonna send somebody else out there, we're going to get a lock box on there ourselves. We need a uh key put in the lop, some sort of solution needs to be provided by you to the seller, and you need to express the urgency for you to be able to perform to gain access to that property. There are far too many deals that I have seen over the past several years that have gotten lost because the wholesaler just did not gain access to the property. Number six poor dispo process allowing snakes to come in and take your deals. This is very, very common with people that are in a financial crunch and they get a property under contract, and maybe it's been a while, and so it's like, well, I don't want to JV the deal because I don't want to give up a large percent of the deal. I need the money. Okay, makes sense. Like, I've also been there myself, so I understand that thought process, but then it's you don't actually have the tools available to you, or you don't know how to use the tools, like investor base, investor lift, deal speed, something along those lines that's a dispo tool that shows you who the end buyers are. So then you try to do it the economical way, the free way, go to Facebook groups or Craigslist or whatever it is, and where you're trying to find and mine for buyers, even using something like PropStream, where you go in or privy, where you go in and you find the buyers, and then you're you're skip tracing, and then cold calling them essentially. Even in that scenario, right there, if you're not properly vetting out these buyers, then there is a solid chance that you're going to be receiving a call from the seller saying someone else just came in and tried to buy the house. They told me that you're trying to sell my house. I see it now listed for sale. What's going on? This is where going back, the transparency with the seller up front is imperative, and then two, you understanding how to vet out these buyers, go through the process of asking them the questions. I did a video just a couple of uh weeks ago about the five questions that you need to be asking your cash buyers during the dispositions process. Go through that and ask those questions, vet them out. But if you're putting your deal up on Facebook Marketplace or putting it in these public Facebook groups that have no admins, you can absolutely expect someone to come along and try to snake your deal. And that is an easy way for deals to get stolen from you and for you to lose deals because one, you don't have that dispo process down, you're not betting your buyers, you're trying to do it the economical way, and the worst thing in the world is you're trying to keep a deal where maybe you're not strong on disposition, so you're trying to keep a larger percent of that assignment fee, and in return, you lose the entire assignment fee. It is vitally important that you understand the dispo process and you're vetting out each and every buyer. Can you wholesale deals on Facebook Marketplace and Facebook groups? Yes, we have done it many, many times. Mind you, we were also doing that before there were dispositions tools. So we knew the risk going into that. I don't think nowadays the newer wholesalers actually understand some of the risks that they're taking by putting addresses out there on public forums and not understanding how likely it is that someone is going to reach out to your seller and/or try to daisy chain your deal and potentially even stigmatize it. That's the worst is when your deal actually ends up getting lost because you can't move it, because a daisy chainer went out and stigmatized it to your end buyers. So make sure you're paying attention to your dispo process. Number seven, poor communication post-signed contract. This blows my mind how many times I've seen it where someone gets a signed contract with a seller and then they don't even communicate with that seller over the next week. And they expect that seller to be completely okay and on board moving forward with them. Your communication with the seller needs to be daily. You need to let them know that you are actively working on a deal, even if it's just a simple, generic touching base like, hey, Mr. and Mrs. Seller, just let me know. The contract's at the title company, we're waiting on that title commitment. But so far, everything's looking good. Great. Just That communication alone will ease any concern that the seller might have about whether or not this deal is legitimate or if it's moving forward or what's happening. That silence is deafening to a seller, and it absolutely leads to them getting cold feet and saying, I've got to move forward with someone else. The other part of it is if you're ignorant enough to believe that whatever lead generation you're doing, that you're the only person that is reaching out to that seller after you've got a signed contract, you are dead wrong. I don't care what you did to generate that lead. Direct mail, door knock, your own PPC campaign, it doesn't matter. Whatever you are doing is being duplicated and replicated by many, many other people. And so the sellers are going to be receiving other phone calls after you've after you've sent and gotten that signed contract. So if you are not staying in communication with them, making sure that they are okay, any questions that they have, and also making sure that they are taking care of their responsibilities. When you open title, what does title need the seller to do? The seller needs the seller information intake form with the title company so they can get the title commitment back, they can get payoffs from the mortgage company or any liens or encumbrances on the property. You need to make sure that the seller is taking care of their responsibilities. Are they moving out? Are they packing things up? Do they need any help? Do they need any help finding another place to go to? Your job doesn't stop just because you received a signed contract. That's just when the the job starts. So make sure your communication after the signed contract is on point each and every day. Number eight, expecting the title company or the closing attorney to manage everything. I think this is one of those areas where new wholesalers are shocked when they get deals under contract, how their contract is not a priority to the title companies and the closing attorneys. It's just not, and it's never going to be. It doesn't matter how much volume you do with a title company, you still have to bug the shit out of them to prioritize your deal. Because if you're not, someone else is, and they're going to shift their attention to that deal over years. They can stare at that purchase and sell agreement, says closing date, March 24th, 2026. They're not going to care. They're going to care if the seller's done everything that they need to, the buyer's done everything they need to, and then if they're getting bugged, they'll make sure that all the paperwork gets sent out and everything gets scheduled. If you are making sure that's a priority. If not, very, very few title companies are just going to take that upon themselves to handle. In fact, I'm under contract right now with a deal that I have no idea why it hasn't closed in a month. And I'm the buyer. I'm the buyer. I'm actually just sitting back wondering if it's ever going to close. At this point, it appears we are solely waiting on the title company. Title Company does not communicate, but also there were many, many weeks in between there where the wholesaler, the seller, the title company were not communicating. And as the buyer, I was just sitting back and watching what was taking place. I don't know if that deal will ever make it to the closing table because it does not appear that it is important to anyone in the transaction. If you expect the title company or the closing attorney to wake up one day and prioritize your deal, you will be upset all the time because it's just not ever going to happen. If it was, then there would be no need for transaction coordinators. Because that's basically all that they do is take care of communicating with the title company and nudging them to do their job. Please do this, please schedule the notary here. Please send out the settlement statement so we can all review it. That's literally what transaction coordinators do. All right. Number nine, attempt renegotiations without setting the expectations during the acquisitions phase. This is a common mistake that virtual wholesalers make. They make promises, right? They're doing anything that they possibly can during that acquisitions phase to get the signed contract. You know, I I can do this deal at$100,000. Then they get the signed contract, then they get pictures, and then they receive an offer for from the buyer for$95,000. So now they go back to the seller and they say, Mr. and Mrs. Seller, after we've gotten pictures and feedback from our buyers, we need to be at$85,000. And the seller's like, you know, go fuck yourself. Why'd that happen? Well, when you go back to the acquisitions, you said, Mr. and Mrs. Seller, I can do this for$100,000. You didn't sit there and say, I could I believe I could do this for$100,000. But here's how the process is going to work. We're going to come out, we're going to inspect the property, we're going to analyze everything that you said about the property today. And if it is the way that you say it is, then we should be able to move forward at$100,000. But if something were to come up that is unexpected, then we are going to have to revisit price. Each and every seller that we do a deal with expects a conversation where we say we can move forward at the agreed price, or we need to renegotiate the price. That is the expectation that is set. If you are not doing that, then you can absolutely expect your renegotiations to one not be successful and two lead to terminations and upset sellers. Why not put yourself in the seller's shoes? Would you not be upset if someone tried to renegotiate it? Yet they had never previously said anything about needing to renegotiate. So that renegotiation starts during the acquisitions phase. So please set that expectation up front. And finally, number 10. This is one of my favorite ones. One that I think probably gets overlooked by many. Zero management of the in buyer. So many deals get lost because the in buyer is not performing on the timeline and the expectations that you set with the seller. The seller becomes upset and you end up losing the deal. And that is the worst kind of termination because you did all of your job except the last thing holding the buyer accountable. You got you did leave generation, you got the sign contract, you did recon, you did dispo, you have an end buyer, and then it gets all the way down to it, and you lose the deal. It's crushing, crushing to morale, your bank account, your profit as a as a business. It's absolutely crushing. Now, when I talk about management of the buyer, I'm talking about when we're vetting out the buyers, we're asking them, how are you going to fund this deal? We can't accept just bullshit answers where it's like, oh, I'm gonna go, you know, use a private lender. No, no, no. We need to know that who this person is. Is it a hard money lender? Is it actually a private money lender? Is that lender going to be in communication with the title company? Is it an actual loan where there's loan diets needed where you have to get approved, credit pooled? How is this actually gonna go down? If it's a hard money lender, do they need an appraisal of the property? Because one, we're gonna have to schedule that with the seller to get them out there to gain access to the property. That takes time. Who has to place that order? The buyer does. So if there's an appraisal needed, are you approved? Have you have you already ordered the appraisal? When is that going to take place? How long is their turnaround time? There have been times where appraisers had two to three week turnaround time to get their appraisals back. Now, imagine that you have a close date of two weeks out and it takes two weeks for the appraisal to come back. Is that going to close on time? No. So if you're not managing that buyer and finding out this information, well, your heart's gonna be broken when the deal doesn't close in time. So you need to be communicating with your buyer, to be communicating with the title company, verifying that what the buyer is telling you is actually happening. So they say they're getting a hard money loan. That title company should be in communication with that hard money lender immediately. So you ask the title company, have you heard from this hard money lender? Are you in communication with them? Have you already started sending them the documentation they they need so they can begin preparing their loan docs? How long do they need to review the documents before they can actually send over everything that you need to close? How long is their turnaround time? All of this is vitally important information. So you have to be asking these questions. This is why, when you are newer at wholesaling, one having a transaction coordinator is imperative, but also two, even having a transaction coordinator might not be able to understand each and everything that you need to know about the deal. Having a solid JV dispo partner would probably be the best route in your first several deals. It's why we tell people inside of TU come in and learn how to do acquisitions, and you can figure out the dispo process later on because there's a lot of nuances that go along with this. And managing those in buyers, making sure that they're doing everything that they need to to prepare for closing, that they're prepared to close on time, so you don't lose a deal where you've done everything that is you're responsible for, and you end up losing the deal because that is absolutely crippling. So, those are my top 10 things that amateur wholesalers do that kill deals.