Conducting Research | Practice, practice, practice | Express what you want | Establishing Rapport |
Wholesaling can be a perfect and often profitable entry into the field of real estate investing. But many a would-be wholesale investor gets stuck on the prospect of talking to home sellers one-on-one.
This is understandable, especially since negotiating is a critical element of wholesaling real estate 101. Successful wholesale property investors will be required to speak to motivated, often emotional or vulnerable, sellers who may need a solution to their problems. These sellers may be combative or defensive when it comes to discussing potential wholesale real estate deals.
So, if the prospect of delving into a real estate wholesale strategy and speaking to home sellers sounds a bit daunting, here are five tips to help overcome your fear and make progress in your wholesale real estate quest.
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5 Tips for Boosting Your Wholesale Real Estate Business
Wholesaling real estate offers many opportunities for beginning and veteran investors alike. As with any business, there are a number of steps you can take to give yourself an advantage over your competition. Here are 5 tips you should follow if you want to boost your wholesale real estate business:
Arm yourself with research
Practice, practice, practice
Don’t be afraid to express what you want
Emphasize learning over selling
1. Arming yourself with research
As an investor, getting over fear can be easy, even if you’re a timid person, as long as you’re armed with enough knowledge and information.
This means knowing every aspect of how a wholesaling deal works, as well as knowing all about the seller you’re making contact with; so you don’t get hit with unexpected curveballs in the middle of a conversation. According to Ethan Taub, CEO of Goalry and Loanry, “they also need to keep up with legislation and policy in the local area.” There’s nothing too big or too little for investors to know about an impending wholesale deal.
It’s also important to know what another party wants. For example, are they going through a divorce? Probate? Difficult financial times? Even if the negotiation goes a bit haywire, you’ll know how to navigate your way if you know what the other party wants (not just financially, but emotionally as well).
And the more prepared you are, the more confident you’ll feel, and the less fearful you’ll be of the negotiation (a business skill you can carry over into almost every area of your business life).
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2. Practice, practice, practice
Fear of speaking in public — or with anyone for that matter — is common. But sometimes, fear can come more from a lack of experience instead of an ingrained phobia about expressing yourself in front of strangers.
So, how do you negotiate for wholesale properties when you don’t know how to negotiate? Just like any skill, it takes is practice. And the best kind of practice you can get is during negotiations where the pressure is off.
Practice your wholesale negotiation in your office, either with your team or just yourself. Write an outline of things you want/need to say, and keep visualizing your pitch so that you can get an idea of what to expect.
When you walk into a wholesale real estate pitch with the sense you’ve rehearsed every possible scenario that can come your way, you’ll find your confidence rising faster than you ever thought possible.
3. Don’t be afraid to express what you want
Think you’re too assertive in your negotiations? Chances are, you’re not.
According to Lifehacker, studies show people who think they’ve “over-asserted” themselves during a conversation often don’t come off as assertive as all. In fact, many times, the fear of negotiating with a motivated seller stems more from a fear of being confrontational than any knowledge deficiency.
The trick is not to view the encounter as a confrontation at all. You aren’t there to argue; you’re there to solve a problem and reach a compromise that’s fair for both parties. As you learn how to find motivated sellers, realize the seller is not an enemy to defeat, but someone you must work with to get what you both want — a resolution to the current property problem at hand.
4. Establishing rapport
People like working with people they like. But this doesn’t mean you and a prospective seller need to become the best of friends. Instead, you need to reach a certain level of respect or commonality that cements your relationship with a home seller and gives you the platform to present your message.
This means focusing the first five minutes of your interaction on rapport-building. Ask the seller about their background. Favorite sports team. Hobbies and interests. Often the outcome of a negotiation can be determined, not by the back-and-forth negotiating itself, but by the negotiator’s ability to establish and maintain rapport.
5. Emphasize learning, over selling
Negotiating isn’t about bombastically presenting your side and trying to manipulate the other party to give you what you want. It’s about learning what another party (really) wants and figuring out if there’s a way to accommodate a way that works for everybody.
And the best way to do that is to walk into a wholesale real estate negotiation with one thought: what can I learn? Both about the seller and the property. This includes things such as:
Does the seller currently live in the property?
How long have they lived there?
When do they plan on moving out?
Is the property currently listed with an agent?
How long has it been listed?
What is seller’s reason for selling?
What is ideal closing date?
What will the seller do if it doesn’t close?
These can be difficult, sensitive questions for a seller to tackle, so be discreet. But you want to stress that you can provide them an opportunity to solve this immediate problem, and you need as much information as you can to facilitate that process.
By focusing on learning and gathering information, you’ll be that much closer to an attractive wholesale deal than your low-ball offer.
If you are not an experienced negotiator, taking a stab at wholesaling real estate 101 can be intimidating at first. But the great part about stepping outside of your comfort zone is that once you start, your confidence will begin to soar. You may even notice what you thought was impossible becomes possible, like completing your first wholesaling contract. So, do your homework, practice your negotiations, and focus on learning. You won’t just boost your chances of landing a wholesaling, but you will also boost your faith in your own abilities.
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