Why Wholesalers Fail (And How to Fix It ASAP)

All right, we had a false start a little bit ago, but we're good to go. What's going on, Collin? How you doing?

Doing fantastic. How are you?

Doing good, man. So we're diving into a problem that a lot of people have as they do the traditional wholesale model, and we're going to explain what that is. But the problem is today dealing with real estate agents that are tired of hearing the same old, same old, right? They're probably tired of hearing, hey, let me understand the situation. You want to get as much information as you can from the agent so you can, you know, make a good offer. But you almost feel, and we all feel, they just don't want to talk to us, right? That happens a lot, I'm assuming.

Pretty much.

Um, so yeah, let's kind of dive deeper into that. So you're in a scenario— tell everybody kind of the scenario you're facing, and then we're kind of gonna deep dive into seeing how we could make it better by making better offers or trying to get tighter with the agents. So yeah, can tell everybody what you're doing right now?

So, um, doing, uh, agent outreach, trying to make contact with just agents in general, see if they have any pocket listings, see if they have anything that's been sitting for a while or something that is coming up that you know, needs work and trying to build a relationship, keep in touch. If they don't have anything, try and keep in touch with them regularly through automated messages and get deals out. Right now we're having problems just getting agents that are motivated still to work with investors.

Right, right. Because they probably had all gotten lowballed. They probably all brought their offers to the sellers at this, like, with their specific deals, and the sellers are just sitting there and like, I'm not taking any lower, and they just sit there, right?

Yeah.

Or at least at the point where you're coming in and it's specific deals. Okay. That's a scenario that you're facing. Oh yeah, another issue you're having is when you do the process of, you know, reaching out to the agents and then they get on the phone with you, you talk to them, you build a rapport, but then they just start sending you crap like MLS stuff. They're not getting it in their head that you just want them to send you their pocket listings. They just send you a bunch of stuff from other wholesalers, right?

Right. That's the biggest thing actually is them sending me other wholesalers' deals. That's the most common thing I'm getting.

And then you're like, well, look, I'm scouring the MLS myself and I already know about these deals or I can get them. Like, there's really no value they're bringing to you by just sending you crap that's, you know, on the MLS, right?

Correct.

So let's, let's address number one, the, the one of the issues, okay? And how, how we can overcome it, or at least do a better, uh, make better offers, right? So you have an agent that brings you a deal, and normally— good, thank you, thankfully you don't do this— but normally people just make an offer and it's like a low offer and that's it, right? They're just like, hey, this is my offer. Some people just send out letter of intents that are really low and they think agents will call them and be like, hey, I'll accept your offer. Doesn't work, okay? But that's usually what people do. Thank goodness you're not doing that. That is a big problem with traditional wholesaling is people just like make tons of offers that are lowball, hope someone calls back, and then they lock it up, don't have a buyer, and then they go find somebody. Don't do that. It's gonna be a waste of your time. You've done good because you've done a step obviously better than that because you have them reach out to you and then you try to understand the situation of the seller as far as you can. Tell us a little bit about the process that you've been doing where you reach out to the buyers in your area that have flipped properties. Explain that process.

Basically what's happening is if I do have some potential with an agent, they have either that off-market deal that they just came across or something along those lines. I'll get an idea of where the seller wants to be. And then before, or even if I can't get that information, I'll get as much information as I can from the agent. And then I will go use certain software, look up any kind of flips that have happened in the neighborhood or in the area or in that same general vicinity. I used to try and find the rehabber or the flipper directly. I found that when I call them just randomly like that, they tend to be caught off guard and uncomfortable with it. So now instead, I go find out who the agent was that sold that rehab, contact them, and just give them a general, hey, Do you work with invest— I first, I start with asking if the flip they sold was theirs, if they did the work. Cause some, I've run into that sometimes agents did their own work or I'll ask them if they work with that investor regularly, things like that. And then they use, they're very receptive. They, they're always on the hunt. So yeah. Yeah. Contacts with multiple investors. So I'll get them the information that I have and then they'll get back to me on where the, the, usually the number that they would want to be at. And I just haven't been able to make that work yet, but that's what I'm trying to do. Perfect.

So one thing, I'm assuming you're doing this, but this is for people that are watching. When you're talking to that agent that has the listing that says like they're letting you know where their seller is, right? They're like, they've been beat up so many times. They're like, dude, no one's— they're not going to accept lower than $110,000. Don't even waste your time, right? So they're kind of giving you that information. One thing I would ask is, hey, is there anything outside of price that is important to the seller that we could do so we can make a more aggressive offer? What that does is that usually gives them their timeline, maybe It gives them something that's important to them, like leaving some of the stuff, doing a post-possession, doing stuff outside of price because price does not always win deals. And this is an example. I just bought my house here. Most of the offers that are going out here in Canada are contingent, right? You can make an offer at asking, but you have to sell your house in order for that to work. And the person that's buying their house has to sell their house. So it's just like a web and a domino of like, if one person doesn't make it, everybody falls, right? So it's very uncertain. So if you can understand, like, certain— like, they want certainty, they want speed, they want convenience, they want a large earnest money deposit. Like, coming in with a lower offer, even though they've been hit in between, you know, the legs multiple times with low offers, if you can come in and understand what they need and then go to, as you just did, the strategy, and they're saying, uh, the other agents like, hey, my buyer could do $100,000, right? For example, you would go to them and you'd say, hey, that's totally cool, uh, but look, I'm just going to be real. That's, you know, they've been hit with that multiple times. Is there anything that you can add to make your offer more aggressive? Kind of earnest money down, like $50K, $100K, whatever. How soon does he even need a due diligence period? Can we close in like 3 days, 2 days? So something like very aggressive. So it's like it might be the same offer, but it's hitting again because what happens with the agents on the MLS is like even if they've been hit with a low offer multiple, multiple times, like that new low offer, they're going to work with that new low offer versus like, let me call that person who lowballed me like 7 weeks ago. They're done with that person. They don't really think about that person that like was a while ago. Does that make sense? Like they want to work with the person that's new just because it's in front of them. So those are the 2 things that I would add because I just, again, I just bought a house and my offer was the lowest offer, but it was not contingent. It was very quick due diligence, a lot of earnest money down, non-refundable, and, um, closed exactly on their timeline. And you know what the interesting is? Sometimes a quick close is not what people want. Sometimes people want a long close. They want to have time to move out. They don't want to just have to be out in like 7 days. So that's why understanding what the seller needs is really important because you can build something exactly to what their needs are. So again, those are the two things. Find out what it is and see if the buyer that you're— the agent, the buyer, whoever you're talking to can do that or what else they can do that would make it juicy that you never even thought of. Maybe they know something that you don't that's like pretty appealing in that area, right?

Yep.

Do you think something like that might help like to get like improve your offers when you're doing this?

Absolutely.

Okay. So that's another thing. Now, I would say really other than that, like if you run that process and the seller is still not being realistic, then the follow-up game makes sense. And then just the hard thing is like you kind of want to reach out to some more buyers, but you also don't want to waste your time because you feel like the seller's unrealistic. So it's almost like, okay, let me just follow up and and just know that the seller's not ready yet, but we'll be there when they are. And then you can leave that discussion, be like, hey, well, I'm ready to go. You know, I'm going to keep following up with you, but will you let me know? And I hate the let me know. Agents, they forget, man. I feel like they do not remember. They don't remember people. Because I just sold my house, like, my other house in Utah, and we had multiple people that offer, but like, we didn't really think to reach out to them because it's like, that's like a week ago. It's like a major amount of time where you're like, hey, we don't even know what they're up to now. Let's just continue with what we have. It's weird, but that's just how agents think. Okay, so let's, let's go over the next, the next issue, and it's agents sending you trash, right? Like other wholesalers' listings, other, um, what's the word, uh, not other wholesalers' listings, but, um, like stuff that's not even theirs, right? Not their pop listings.

Yeah, so I'm trying to update the initial outreach SMS messaging so they get more of an understanding of what we're trying to do, but there's a follow-up whenever they bring me something that's not their listing on market, whatever. I do have a follow-up message where, you know, I kindly— I politely tell them, you know, we're looking at the MLS every day. Anything you send us is out there. We've probably already seen it. So it's whatever. And I feel like they're not that quick on the uptake.

You know what I feel like they do is they just take all the investors they talked to on the phone and they just put them in like a drip or like you can't— like I can't auto campaign. And that's not what we're looking for. We're not looking to get into your campaign system. So this is what I would suggest. It's like, and it's manual, it's very manual, but manual labor, but you— it's what makes the difference, right? Because not only do you have AstroBlaster, and there's other softwares, but there's a ton of them, other people that have it. I would assume that like a lot of the same messaging is kind of going out there right now, like, hey, just bring me stuff off, you know, pocket listings, blah, blah, blah. Now, who are they really bringing the pocket listings to? They're bringing the pocket listings probably to their broker, probably to like their dad that, you know, buys properties, like people they know. Okay, so how do you get on that level? I'm about to show you like a— this is a mind map that I created off of listening to like the teachings of a guy that does this like all in one market. This is all he like specializes in, like his main focus. So this is his process, and I thought it was pretty good. I'm not like super into agent outreach. I like to work directly with wholesalers a little bit more, uh, just because they understand the process. But this is what he taught, so I'll give you some pointers and some suggestions, and you— we can kind of vibe, and you can tell what you think. All right. So you pick one market and then you network with a couple solid cash buyers. Now you go directly and do the neighborhood technique where you find the buyers. I think that's totally cool. But as you do that, you're going to build more relationships with cash buyers or agents. So you're good with that. You're going to identify a potential listing or agent to reach out to, right? So you're going to be able to do that through your process that you're doing at the moment where you're reaching out to agents and saying, hey, send me stuff, right? Or you could specifically go hit up a property that looks like it's, you know, what is that like one that looks like a decent opportunity and call them directly. But I think your process is fine because it reaches out to more people. So when you call the agent to make an offer, you make a discovery call to the agent, and then there's a certain script out here that I'd like— I can share with you. But you have a script to talking to the agent, you analyze the property, and you send the offer terms with— and this seems— this is his process, right? He'll send an offer and fall through that process, which we both talked about, like, hey, if the offer— like, unless you really know if the offer is decent, it's probably not going to go anywhere. Like if it's not like customized, what he does is he takes this agent and he adds it to a CRM and he creates a list entitled real estate agents. And next thing is he adds a note into CRM about the conversation. After he has that conversation, he puts them in a follow-up drip for 30 to 90 days to follow up on that, that property he actually called about. And then this is the thing that I actually liked most of the process is he sends them a friend request and a LinkedIn connection. He says, "You establish a facial recognition and you're now present in their newsfeed and with their featured content." So it's interesting. If you start making more content or just about what you do, how you buy houses, it will appear more and they'll get to recognize you a little bit more. Now, I don't know if you want to get on that level and have them be your Facebook friends, but I could see that getting one step above than the wholesalers just like, "Hey, call me if you have anything," or, "Just email me if you have something." After that, they text their cell phone number and email them saying, "Hey, 'Hey, thanks for taking my call. This is my cell.' You give them your cell phone, not like your CRM, but your, your actual cell. Uh, your buyer box right box right here, you do that. You sign your text with who you are, and you can email them also your contact information. Now this is like, this can be automated as well, but it's just like an additional steps to be personalized. This guy also says he suggests catering his social media to real estate, like real estate, like just talking about real estate. So when they do become friends with him on LinkedIn and Facebook, they're saying that you're active in the real estate game. He tags the agents depending on if they're willing to call him directly or if he's gone through this process with them with VIP, and then he'll follow up with those more regularly if they're a VIP agent. And let's see, this is what I think again is like the sauce is what value do you provide to the agent? Because the agent's not going to really remember you. They get a lot of these calls. It's like, hey, will you add me to your cash buyers list and send me whatever you got? You want to be their go-to person. And how do you set yourself apart from that? Well, you have to provide massive value to them that they say, "Okay, this person is really worth calling out of the 10 people who have called me or the 100 people on my list that say they're cash buyers." You want to let them know, "Look, hey, not only do I buy properties, but I literally am on the MLS and I'm networking with cash buyers every day. So if you have something that you want a 24-hour commitment to make an offer, if you send it to me, I commit that I will make you an offer within 24 hours and you'll know what your seller could get on a cash offer." offer like that. Plus, I'm not only going to run it by me, but I have a couple people in my network that I could kind of get you an idea. Why is that valuable to a real estate agent? If they're talking to a seller and the seller's like, I might want to list it, I'm not sure if I want to list it, I would like to sell for cash. And the agent's like, well, hey, I know a guy that, you know, I know someone that I can get you an idea of what a cash buyer would pay before we even list this. That's something that a service that you can provide to that agent. And if you let them know that, you're going to go a little higher up on their list already, right? Explaining to them the opportunities to work with you. Now, I know the double dip doesn't always work in all markets, but it does in Canada. That's how I think I got this deal as well, because my offer was super low compared to the competition. But I said, "Hey, I'm unrepresented." I let her know that. And I said, "If you represent me, you can take my side of the commission. You can get paid on both sides, or you can just give the seller a discount." She didn't tell me what she was going to do, but it seemed like she was just going to take both sides of the commission. Now, if it's a flip, they get a triple dip, right? They represent, they sell, they make money for selling the property to— for listing the property for the seller. They make money from representing you. And then you, if you're going to flip it, you would say, yeah, you can represent me when I flip it too. So they triple dip and they're like, they're super excited about that. It's like, oh dang, I just made 3 times the commission. I'm definitely going to go push for you. Now, this is a little hot, like higher level, but if you speak at brokerages, yeah, a lot of the agents are going to get to know who you who you are. If you're like, hey, this is what I do, this is what I do with investing. And this guy goes above and beyond. He makes a weekly, a monthly newsletter providing value to agents in his network that he talks to. So he's like, hey, do you mind if I add you on my investor newsletter so I can kind of give you some more information on how we help people, blah, blah, blah. So I believe that if you're talking to these agents, and most people I know because I've done it in the past, they're just like, hey, will you just add me to your cash buyers list and let me know if you have any properties that you come across? That's the most that like I'll say sometimes, and I know that's the most some people are saying. But if you can really make it juicy, be like, look, I'm unrepresented. I scour the MLS, but if you come across anything that you get, not only will, you know, I'm unrepresented, you could represent me in the transaction, but sometimes when I flip these, again, I would rather go with you because you brought it to me. You can make triple the commission. I'll honor the commitment that if you send me anything, I will get you an offer, a cash offer within 24 hours, so you can tell your seller where they would be at if they just went with a cash offer. Then obviously you're going to make money on that. I also have a big cash buyers list and I— yeah, and then these two things, it's whatever. I wouldn't really focus, but these are the three things that I think will get you higher on that list. Does that make sense?

Yep.

So I just want your feedback. That was like some notes I took and I said, okay, that's pretty good stuff. Are you doing some of those things I talked about or what do you think? I'm trying to remember everything we just went over, but I would say I'm doing Facebook requests and LinkedIn requests and just texting them from your cell phone and basically just letting them know like the value provide those 3 things. That's kind of like the gist.

No, I would say I'm not doing any of those.

Okay, totally get it, man. It's a lot of extra steps, right? And it's usually not automated, but really what you've ever thought of before. Okay, and that's why I wrote it down. I was like, it's pretty smooth, right? Like, because really what you're trying to do is you're just trying to keep them— you're trying to have them have you at top of mind, right? Because I know, I know how agents work, man. Like, they have— when they build a relationship, they're sending all their, their cash buyer stuff to like that one guy who they've just already done a deal with and they trust, or their dad, like I said, their dad or their friend or broker. So in order to break through, you really got to make an impression. And how do you make an impression? You, you serve. That's how you can like build relationships with people, is you give. Yeah, instead of just like, hey, just send me what you got. Like, that's like a very— it's not a very balanced relationship, right? If you just meet someone, you don't know them, and you're like, hey, just send me what you got, or send me your best deals, they're just gonna— they're gonna put you in that drip, and that's all, that's it.

Yep.

So, yeah, I'd like for you to try that. Like, as you go through this, you have this process. I think it's a solid process with the blaster thing you're using. It just needs little tweaks to be set apart. Yeah, so let's just kind of review what we talked about first. First, we talked about making really great— finding out what would really tip the scales for the seller outside of price, and then finding out how aggressive those agent buyers can be with their offers and seeing if that does it. Anything, right? And then it's going up off after you talk to these agents when you're doing the process. Facebook friend requests, make maybe a live once a week or make some content once a week talking about your business, like what you do. I think you got a cool story. You're in the camper, you're doing that, and you're investing. That's dope. I think some, a lot of people resonate with that. And so make some content around that so when they see that page, they can check you out. And then explaining to the agent what makes you different than the 100 other cash buyers that —that they would, that they can buy their property. Isn't that super valuable? Like, they're sitting in front of a ton of sellers, and seller— I know this conversation comes all the time, like, what would it look like for a cash offer? And you're saying, hey, I can get you that info within 24 hours. I think they'll call you, like, they'll take you up on that.

Yeah. Oh, cool, cool.

Well, hey, that's why I wanted to get on the phone. Now I understand a little bit more about your process. I like it. I think it's good. That's the thing with, like, business. It's not usually like these— Hermosi calls it, like, little BBs, right? It's not just like one big giant quantum leap. It's usually like the little tiny things that make the big difference. So we can, we can see how that goes. Cool, cool. Well, everybody that's been watching this, uh, we just wanted to go live because this is a conversation, and I would say this is something a lot of people are facing, me included, right? Like, sometimes we just get in the rhythm of just being like, yeah, send me what you got. But it's a relationship game. It's not— it's quality, quality, quality over quantity. I had a CRM that would just blast out letter of intents, and I sent out like thousands of them, didn't get a single deal because that's just not how it works. Like, people— an agent, even if an agent it's a low cash offer, they're just going to be like, well, I might as well just call John at my brokerage. He paid the same thing and I know John, right? So that's kind of like what they're doing with it. And we got a, we got FOD coming in. Thank you. Always giving extreme value. Thank you. I appreciate you. Um, anything you want to leave everybody off with, Colin? Anything you want to say?

No, I'm good.

All right, well, let's get after it. I appreciate everybody that's watching it. And if you guys are out there doing the traditional wholesale model, where you're just making lowball offers and hoping it works, 70% of ARV, and just hoping it— like, that's how you're going to get a deal. Doesn't work. Okay. That's traditional wholesaling. You don't have a buyer. You just try lowball offers. And then when you get a deal, you just try to blast it out. Crap. Don't do it. We actually have a website called traditionalwholesalingsucks.com. Check it out because that's not what we're teaching you guys to do. That's not what works. What works is relationships, making bomb offers, and leveraging cash buyers to make the best offers as possible. And yeah, that's it. So we'll catch you guys in the next one. Thanks, Colin. For being on here, man. Appreciate it. Thank you. Hey everybody, what's up? It's Nathan Payne, and for the first time ever, we just released this insane training bundle that has literally everything that I've learned from doing a combined 4,000 deals in real estate, all from starting with absolutely no previous business background experience or any real estate experience. Plus, there's over $19,000 worth of free gifts that we're throwing in, all for an insanely low, low price. If you want to get your hands on this, be sure to click the first link on the description below right now.