Dale on the Daily

Finding Buyers When You're Stuck

• Dale Kerns • Season 1 • Episode 5

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Facing the fear of not finding a buyer for your wholesale deal? You're not alone. This candid exploration tackles the paralysis that stops many new wholesalers from getting started – the fear of locking up contracts without guaranteed buyers.

The truth is liberating: even experienced wholesalers only close 65-70% of their contracts. Cancellations happen for legitimate reasons, and understanding this industry standard frees you to take action rather than remain frozen in analysis paralysis. But how do you minimize cancellations and maximize closings?

We dive deep into the critical skill of property comping – why so many wholesalers get it wrong and how to develop the expertise that ensures your contracts are locked at prices that work. Learn to leverage buyer feedback as a powerful tool for refining your acquisition strategy, rather than seeing rejection as failure. Discover how to accurately calculate ARVs, estimate renovation costs, and present compelling numbers to both sellers and buyers.

For those who prefer having buyers lined up first, we explore multiple pathways to build your buyer network: focusing on local markets, joining investor communities, forming JV partnerships with disposition specialists, and leveraging modern software solutions like PropStream and Investorlift that provide immediate access to active buyers.

Most importantly, learn how to maintain professionalism in the wholesaling industry by setting proper expectations with sellers and handling necessary cancellations with integrity. Your reputation is your most valuable asset in this business – protect it by doing things the right way.

Ready to overcome the buyer barrier and start closing deals? Subscribe, like, and comment with your questions about finding buyers or challenges in getting contracts closed!

Speaker 1:

So you're a new wholesaler, you're getting contracts or you're trying to lock up contracts. You can't find a buyer. I can't find a buyer. What do I do? Do I extend a contract? Do I cancel a contract? So there's a couple of mindsets here. Are you waiting to sign a contract to find the perfect buyer, or are you canceling contracts because you don't sign a contract to find the perfect buyer? Or are you canceling contracts because you don't have a buyer? I've been there and you'll never have the success that you want if you wait for the perfect buyer to come along and, like they're sitting on the edge of their seat, for you to call them and buy your deal. You'll never get started. So what you got to do? The first thing you need to realize is that getting the property under contract and potentially having to cancel that contract it's not as scary as you think. In reality, about 30 to 35% of all properties that are under contract get canceled, and that's if you are a really good wholesaler. That's industry standard. So if you aren't locking up contracts because you don't have a buyer lined up, you need to get over that fear or else you'll never get a contract signed and closed. So let's say you are locking up contracts but you're not finding buyers and closing the contracts.

Speaker 1:

The first thing you want to look at is what feedback are you getting on those properties? Are they saying the price is too high? Are they saying that you need more renovation than you allotted for? Is it in a bad neighborhood that nobody wants to buy in? If people are looking at your deals and they're not giving you any feedback, or they're not giving you any price, or the price price way lower than what you have it locked up for, then you need to be asking why. Well, how much renovation do you think? What did I miss that you're seeing? Is there foundation issues? Is the bathrooms and bedrooms need to be upgraded and you didn't think they needed to be? Is there something going on in the property when they're actually walking through that you're not taking into account?

Speaker 1:

When you are comping and looking up these properties, the feedback from those buyers is crucial for you to adjust how you're doing things on the acquisition side, maybe what kind of properties you're looking at, where you're looking at and taking that feedback and learning from that is very important and based on that, you can adjust your acquisition strategy to get the properties under contract and where those buyers are buying and the type of properties that they want. So if you are locking up contracts, you're getting people to walk those properties. The feedback that you get is crucial for you to learn and adjust and adapt to what they're saying and adjust your acquisition strategy and get the pricing where you need it to be in order to wholesale those deals. So that'll help you get deals where locked up at the price they need to be locked up at, but also increase and hold the assignment fees that you want and hold the assignment fees that you want. So if you are maybe taking a cut on the assignment fee to move the deal, you won't have to do that if you can take that feedback and adjust accordingly on the acquisition side.

Speaker 1:

The second thing is one of the most common reasons that new wholesalers and even experienced wholesalers have to cancel contracts is because they got it locked up way too high for buyers. So most of the time the reason for this is because your comping skills are off, especially for new wholesalers. Especially for new wholesalers, the better that you can comp that property of what the after repair value is going to be. Then you can back into the profit for the buyer and yourself in order to get that property locked up accordingly. So poor comping skills is one of the biggest issues in the industry and that new wholesalers have an issue with most of the time until they get those skills under wrap. You'll see these gimmicks online.

Speaker 1:

You know comp with no skills, a quick formula in order to get a number, and when you hear this, this isn't them actually comping the property. This is more or less to try to find motivation from sellers. So they might throw a number out there based on some quick formula or quick data, but it's really to gauge the motivation of the seller. Is that seller even worthy or willing to sell that property at a discount? So it's almost like giving a lower offer or an offer that is maybe not a reality offer to gauge the motivation of that seller. And then you can go into actually comping the property and dive deeper. That is more of a strategy to know who you're talking to. What type of seller is that? Do they really have motivation to sell at a discount and if so, then you can dive deeper into the comping. If they don't, then you can either move on and embrace no or maybe put them in some type of long-term follow-up that you can circle back with them when they might have some more motivation.

Speaker 1:

Copying the property and knowing what your after repair value is is crucial so that you can find out how much renovation needs to be done, find out where the end buyer might be willing to purchase it at your assignment fee and then ultimately what you need to get that locked up for. So copying skills that you don't have. You don't take into account what is sold in the area. You don't take into account the like-for-like properties. You don't take into account the like for like properties. So they just look at a high number and use that number when in reality that's a totally different property. Maybe it's built newer, bigger square footage, whatever it may be, and they're not looking at the light like for like properties and the accurate arv. They don't account for the rehab correctly and really they don't have the skills to educate buyers and let them know what their property is worth, as is based on other properties in the area.

Speaker 1:

A big thing with sellers is when you're talking to sellers, you get a seller that has motivation, but the wrong price is a lot of times the most common seller you're going to talk to and being able to educate them on the numbers and the math of how you're getting to that. Even showing them properties in the area and educating them on that is a big skill that you need to have in order to be able to negotiate and really even educate sellers not so much the negotiation, but show them the proof of why you're at the number that you're at, and that's another thing that's lacking when you're going into your comping skills. So what are a couple of ways that, um, um, those are the few things that you would need prior or once you get properties locked up, but you're not finding a buyer. So let's say, you're the type of person that you want to have everything in line before you get started and you want to have buyers prior to locking up contracts. So a big way to do that is market where you know there are buyers. If you live in an area, market in that area and wholesale in that area so that you can find buyers in that area through real estate contacts, local real estate groups, you can find buyers in your backyard and wholesale and sell those deals to those buyers. If you join online communities or mentorship programs, you can find people that are buying in those groups, in those mentorship programs and market in the areas where they are buying is another way to do it. If you're not going to do it in your backyard but you want to market in other areas other states, cities, counties, nationwide, whatever it may be you can join those groups and communities and mentorship programs and find those buyers and then sell deals, try to sell deals specifically to them. Another way to do that is get into those mentorships and into those communities and find people that you can JV with.

Speaker 1:

Nowadays there's a ton of wholesalers that are just doing the disposition side. So they will JV with people that lock up contracts and then they have the buyers and they have the people that are buying in those areas and they will sell the deal for you. So you bring them the deal, they will sell the deal and typically you can split that assignment fee usually 50-50 is how it mostly works, but sometimes it could be different depending on the disposition. But if you only have to do the acquisition side, make sure the numbers are good on that side and then have somebody that can dispo it for you, it can take a lot of weight off your shoulders, especially if you're first starting out, if you're trying to go at it part time and you don't have a lot of time to do acquisition and disposition, that would be another way to have buyers lined up before you get properties under contract and locked up and you're using their buyer pool. You don't have to find the buyer pool and then you can take time and slowly build your buyers list over time, and JV was someone that is going to dispo the properties 100%.

Speaker 1:

There's also incredible ways to find buyers online Nowadays. There's tons of softwares. I use PropStream to count properties. You can also find buyers there. Investorlift also has a free version now that you can sign up and you can have a free version of that and then upgrade and find buyers that you would pay for once you get signed in. But those are two well-known softwares that you could sign up today and have buyers at your fingertips immediately. There's links in my bio that you can go in and get discounts on those and sign up and literally have buyers in a couple minutes once you get signed up with those two popular softwares. So finding online is a huge plus nowadays that you can find buyers. To do that you don't have to build a list like you might have back in earlier days.

Speaker 1:

The one thing that I struggled with, and a lot of new wholesalers with and I still remind myself is having a buyer should not deter you from locking up contracts. Get the contracts locked up. There are plenty of resources with softwares and mentorships, communities to find the buyers that you need. At the end of the day, only 65 to 70% of your contracts are going to get to the closing table. It should be, and if they don't, it should be for legitimate reasons. Title issues you found a serious foundation problem when you went and walked the property. There's some family member that nobody knew about that needs to sign paperwork Some kind of outside the box issue that maybe you couldn't anticipate on why it doesn't close. It shouldn't close because we as the wholesaler can't find a buyer. That is not the professional way to handle the wholesaling side and we don't want to give the industry a bad name just because we can't find a buyer. If, for some reason, you can't perform, then yes, we need to cancel so everyone can move on.

Speaker 1:

Don't be that wholesaler that is just stringing sellers along, extending contracts and giving the industry a bad name. If you're wholesaling, you don't want to be that guy If you know it's not going to work cancel, let the seller know. Set the expectations up front of how your process is going to work. Here's what's going to happen. I'm going to send you agreement. We're going to sign it. We're going to come out and look the property. If it's everything you say it is, we'll move forward. If it isn't, we'll have to revisit and have a conversation about it. If we can work it out, great. If not, then we'll cancel and move on and you can go do whatever you need to do. That's best for you and we can also move on as well.

Speaker 1:

So we don't want to tie up our resources and our money stringing along contracts that eventually will never close, and also we don't want to do that to the sellers as well. So keep the industry and your process on the up and up. Don't do things that are going to give the industry a bad name In the long run. It's just going to hurt us as a wholesaler and the sellers that really need us to sell their properties. So setting the proper expectations up front is another way to also limit cancellations. But if you do have to do it, at least everyone's on the same page and we can all move forward, all move forward and make up uh, amicably. Thank you for watching today's video. Let me know how you handle fine finding buyers and other things you want to know, or, um, want to hear me talk about about getting contracts closed in the comments. Also, give me some love. Like the video, subscribe to the channel, really appreciate it and I'll see you in the next video.