Why Wholesalers Fail Stop Guessing, Start Succeeding!

72% of wholesalers lose out on deals that they should have gotten paid out on, not because they're bad at the business, but because they're using an old broken model. The traditional wholesaling model, the model of get a house under contract and guess what it's worth, guess what a buyer will pay, then shop it around and hope that a buyer will want to buy it within your due diligence period of 3, 5, 14 business days, whatever you have on your contract, and then if you don't find a buyer or if you didn't get the price right and you didn't guess right, you have to cancel the contract, is old and outdated and it's killing the amount of deals you can do, and you got to stop immediately. In this video, I'm going to show you exactly how to fix that model and why you're losing out on so many deals, why buyers don't want your deals that you have under contract, and why they're telling you that they're trash. I'm also going to explain how much money and deals you're losing by following that old model, and I'm going to show you how to fix it with the pre-flipping method that took me from canceling 39 contracts in a row to closing deals consistently. I'm Nathan Payne and I've closed hundreds of deals nationwide, made millions, and I've also showed hundreds of other wholesalers how to fix their business and how to do deals consistently and stop losing out on deals that they should have closed. So let's dive right in. Let's dive into the real reason why your deals keep falling apart, and I can promise you it's not what you think. You're using a guessing model. The traditional wholesaling model that everyone's been taught is go ahead, go find a property, lock it up, make an offer that you think a buyer would be willing to pay. Once you get it under contract, then you shop it around within your due diligence period. A lot of people have short due diligence periods, so they're under the pressure and under the gun, and if they can't find someone that's willing to buy their property in that due diligence period, they either try to renegotiate or cancel the contract and leave a bad taste in the mouth of the seller and lose out on a deal that they probably could have closed if they knew what they were doing. So the guessing model, how it works, and it's the way I was taught and it's what most people are taught, is you find out what you believe the ARV of the property is, you do comps, and then from the ARV, then you say, hmm, I think it's gonna cost this much money to fix the property. And then you guess the repairs, and then you guess how much money you think you can make in your wholesale fee. You get it under contract, and you hope that a seller will accept an offer that low. And after you do that, then you shop it around to your buyers, and then the buyers tell you if you have a good deal or you have a trash deal. Most of the time you have a trash deal because you followed the method and the numbers that just caught you guessing. Now let me tell you something. The ARV is not what you think. You do not need to figure out the after repair value of a property in order to wholesale efficiently and effectively. I know because I don't even care what the ARV of the property is. I care about the motivation of the seller. I care about their situation and how to help them solve their problem. If you're guessing off of even off of comps of what the ARV is worth, you could be wrong. You could see it completely differently from a buyer that's willing to buy the property. You could see it way too high. You could see it way too low. So the problem with what you're doing is you're trying trying to guess what people will pay for the property when you have no idea, especially if you're brand new. I was stuck in that model for a long time. It caused me to cancel 39 contracts in a row when I went nationwide. I had no idea what I was doing because I was working in multiple cities throughout the United States, and I found out that every city is completely different. There's not a blanket formula that's going to allow you to know what buyers would be willing to pay for the property, because every street, every city, every area all over, even in the same state, is different. There's areas where people are willing to pay more because of the school district, and maybe you don't know the school district, if it's a good school district or if it's a bad school district. I have a buyer that knows his area so well he's willing to pay a premium for properties that are within a specific school district because he knows that school district is going to demand a higher price. And there was a wholesaler that was shopping a property around trying to dispo it and was trying to sell a property that was literally on the line of the school district. It was actually in the part like right over, street over from where the good school district was and where the bad one was. And the buyer knew this. It was actually like one street over into the good school district, but the wholesaler was using comps in the bad school district because that's what he thought. And my buyer friend made an offer, got the property at a steal of a deal, and ended up making tons of money. And the wholesaler had no idea. So what I'm trying to tell you guys is if you are trying to follow a formula, you are missing out on deals. And if you're guessing what a buyer will pay, you're missing out on thousands and thousands of dollars, hundreds of deals that you could be doing. Now I'm going to explain to you how to fix this, but I wanted you guys to get this in your head. You are losing out on deals if you are guessing the repairs. You're not a rehabber. Wholesalers did not get in this business to know what the rehab of a property is. I don't know what a roof costs. I've been doing this for 8 years plus. I don't know what a roof costs. I don't know what floors cost. I don't know any of that. You know why? Because it doesn't matter. It matters what the buyer thinks it's worth. It matters what the buyer thinks the repairs are. But when you guess and you make those offers, and a lot of the time those formulas get your offer way too low, you're not going to get a lot of shots at helping a seller that's motivated because you're making offers that are way too low and it's going to offend them. I'm going to show you again how to fix this, but before we get into this, I want you guys just to understand that buyers are different all across the board, and by guessing and using the traditional wholesaling model to lock up properties that you think you have the right price, it's, it's killing the amount of deals you're doing. Now, before I get into the next step of how to fix this, I want to let you guys know that we offer within my painless flipping apprenticeship a way to solve this by showing you exactly how to have that right conversation with the seller by doing it with you. So if you're interested, just check out the link below and it'll tell you a little bit more about my apprenticeship and how we can work together to do deals. So if you're tired of guessing, dealing with cancellations, dealing with crazy sellers that are angry at you because you locked up their property and then you have to back out because you couldn't find a buyer— if you're tired of all that, let me show you the model that fixes all this. So it's called the Pre-Flipping Method. Now a lot of people think I'm talking about reverse wholesaling when I talk about working with buyers first. That's not what I mean. If you go and find a buyer first and spend all your time trying to get a buyer's list ready, that is an absolute waste of time. Okay? That's what reverse wholesaling is. Reverse wholesaling is let me build up my buyer's list, then let me go find out what they want and bring it to them. Waste of time. You know why? Because you could spend all your time finding buyers, eventually get a property under contract, eventually go find a lead, and that buyer or all those buyers could be like, oh yeah, actually I don't buy in that area, or I'm going to lowball you. So that's not what we do, okay? It's a very different system. Do not reverse wholesale. It will waste your time. What we do is we start with the lead first. You go and target leads and you go target areas where you know there's buyer activity. So it's not like you're just targeting one buyer that buys in there. You know that buyers are actively buying in the whole vicinity, the whole area. And how do you do that? It's pretty dang simple. You just target areas that are major metros, okay? Where are all the top wholesalers? Where are people doing most deals? Their major metros. Why? Because people are moving in. There's a lot of activity activity. Flippers are interested in flipping because they know there's demand. So you guys don't have to think too hard into what areas you need to go after. You literally just need to go for areas that have high populations within 1 hour of a major metro. Simple as that. Now, there are mid-tier markets that are good too that aren't like huge, but they have buyers. Now, that will take a little bit more of research, but we can talk more about that if you're interested in mid-tier markets and how we help people pick those in the Painless Flipping Apprenticeship. Like I said, just check out the link below, but we're not going to be getting into that in this video. But you just need to be in the right market, and this is how the model works. So again, not reverse wholesaling. Do not get buyers first. Once you find a lead, okay, and you can do this, you can get a lead many different ways. You can go get them from pulling lists, you can do targeted lists, you can do pre-foreclosure, you can do probate, you can do stacking. There's so many different ways that you can get leads. You can start, if you're on a budget, you can go stack lists, you can do out-of-state absentee owners that have a vacant property and it's high equity. That's a good list to go after. Pre-foreclosure. Now, if you have some funds, I would recommend that you do pay-per-lead, not pay-per-click, because pay-per-click is gonna be more expensive. And with pay-per-lead, you can get refunds. And there's a lot of different providers. Again, we have specific providers that we recommend within our apprenticeship that we use. But anyway, you start with leads, okay? And leads, it's either you got to spend your time to go get them, or you got to spend money. It's either time or money. You got to decide. If you have time, go do it. If you don't have any money, do you you got time, that's how you do it. You gotta grind and hustle. And if you have money, then you pay for leads. All right, so you start with leads. Once the leads come in, you have to have the right conversation with the lead. You have to find out why they want to sell. Are they the right person to work with? You cannot convince someone to sell their house at a discount ever, okay? They either want to sell or need to sell. They want convenience, speed, and ease. And you have to identify their reasoning and their— the motivation behind why they want to sell to a cash buyer. All right. Now, the beautiful thing about the pre-flipping method I'm going to tell you guys is it doesn't matter if they want to sell for cash or not. We can help them in any situation if they want to sell their house. Okay. But we'll get into that in a little bit. But you want to be able to disqualify the lead, not qualify them and like take them through like, can you tell me about the condition of the house? Will you tell me like if you're just asking them questions that are about the house before you really understand the problem or the reason why they're selling, I'd say you're jumping the gun here. I care more about the situation than I care about the property. There's a lot of deals I've done where I don't even know about the house, but I know the situation makes sense, and I— it's a person that's motivated because they have to solve a problem. So how do you find this problem? You disqualify the seller. How do you disqualify a seller quick in order to know their true motivation? Well, you give them options. You run them through the options that they have available to them, and you act as like you're the reluctant buyer, that you're not hungry to buy their house and lowball them. You actually are able to gain more trust from the seller by pushing them away than trying to get them to accept your crappy offer. So what we do is we disqualify fast, and it's win fast, lose fast. We want to find out quickly if we're talking to the right person. So number one, we say, what options have you explored already to sell your home? Because I'm obviously not the first person you've talked to, right? Oh, then they can say, oh, I've talked to a lot of different cash buyers. Oh, okay, well tell me a little bit about what they've offered, or tell me why you haven't signed with someone and else so far? Okay, so you want to find out where they are in their journey. If they're like, oh, I just woke up today and I decided I want to sell, then you're talking to someone who's probably not ready to make a decision today. And just making them an offer this quick on the first call, probably not going to make sense because they haven't done their shopping yet. They haven't done— unless they're like, hey, I need to sign right now. Most of the time, if they're just in the very beginning process of the journey of trying to sell their house, they're not ready yet. But what we do is we say, hey, Sounds like you have a good house, or it sounds like, uh, most people want to get the most money they can for their house. Have you considered putting on the open market or listing it? We bring them by that option first so we can identify if they want to list it or if they have any friends or any family that would list it for them. And if they say, no, I don't want to deal with that, I need to sell fast— check. That's one indicator that that's someone we can work with, right? And by the way, if they want to list it, yes, we can help them list it too. That's what an innovation is. We can put it on the market for them. Anyway, we asked them if they've thought about listing it. Number 2, the next question to disqualify them, you say, you know what, your house, you told me a little bit, a little bit about it. I don't know 100% too much about it, but I want to ask you, have you considered just flipping it? From what you've told me in your situation, you're gonna make more money if you can just flip it yourself. It's gonna take a little bit of time, but you're gonna get the most for it. Then they're like, oh no, I don't have the time to flip, or I don't have the money. Check, that's another reason why they would be someone to work with, okay? Then you say, have you thought about maybe just renting it out? You know, if you keep it over time, maybe you could sell for a lot more. That's— is that an option for you? Oh no, I don't want to be a landlord. Okay, check. That's someone that we can work with. They don't have motivation to, to keep it as a rental. And the last thing we say is, do you really need to sell it? Could you just keep it? Like, oh, I can't keep— I can't keep the payments. I can't afford the payments. That's why I need to sell fast. So you've just identified a ton of motivation there by taking them through the disqualifying process. You didn't come off pushy, and now you can say, look, I totally understand. So it sounds like you don't want to list it. Sounds like you do not want to keep it or flip it yourself. You don't want to rent it. So these are some of the options that we can explore together. And then what we do is we take them through the options that they have available to them. Now notice I haven't made an offer yet because I'm not going to make an offer until I feel like we have the trust developed and they're ready to accept it. I do not make my offer upfront. You know why? Because that's when you lose your leverage. If they're talking to 10 other people and you make your offer, offer, they're just going to go take your offer to someone else. And I know this because when I ask the question, hey, have you talked to any other people? What options have you explored so far? And they say, oh, I've talked to 5, 10 wholesalers. And I say, okay, well, what have they offered? They immediately tell me what they've offered. And then I just say, well, why didn't you go with them? And they usually respond like, oh, well, I'm shopping it around. I want to see if I can get more. Then I'm like, well, if I can get you a little bit more than they can— I'm not saying I can, but if I could, would you sign with me today? Usually if they're like, yeah, then you just have a contract and you get it done. But the thing is, the problem with the wholesaling offers that have been thrown out before is they could be wrong. So that's where the pre-flipping method comes in. Now if I'm talking to a seller that's extremely motivated, I will lock it up if the price makes sense and it's just a no-brainer. And by no-brainer, I mean it's just— I've done deals in this area, the data that I can see, it's just, it's obvious. And the only issue with that is it's not usually that obvious for new wholesalers. If you've been in the game for a long time and you've done deals in the area, it can be obvious, but it's not always obvious because there's so many different nuances and different things that come into play when you're in a market. Okay, but anyway, we disqualify the seller, then we run the seller through their options. And mind you, we do not talk to a buyer until we know that there's motivation involved. Okay, this is not, again, reverse wholesaling where we have a buyer specifically already. No, what we do is once we find that there's motivation, and if the seller's not willing to sign a no-brainer offer right then and there where we can lock it up and we're willing to buy it if we can't find someone, then what we do is we go and talk to the top buyers in the area to find out what they would offer. We go find out what they would pay. We go find out how soon they could close, and we go and get their feedback. So when we go back to the seller, we can make an aggressive offer that beats everyone else. And we're not just shooting our shot in the dark. We have data and we have feedback, so we know it's a done deal already. Now, where do you find these buyers? Well, that's the secret sauce to our process. We know exactly where to go to find buyers that will tell us what they will pay, what their repairs are going to be. And a lot of the time, these buyers will say, well, what do you think? And we don't tell them. We're, we're not the buyer. We don't know what the ARV is in their opinion. We don't know what the rehab is. We're not rehabbers. So we tell them, hey, look, just tell me what you think it would be because there's so many different options, there's so many different scenarios and different buyers out there. If this is something that you're interested in, we'd love for you to give us an offer and take a look at it. We send people, we send buyers to go take a look at the property, okay? Even if we don't have it under contract, if we do or don't, it doesn't matter. You know why? Because we know how to work with buyers and the process we use enables us to work with them whether it's under contract or not. And a lot of people are like, 'Well, won't they go behind your back?' No, not the way we do it. Not the top buyers that we work with. We know within our network that they're not going to do that because we work with seasoned buyers that aren't just going to steal your deals, or they're going to be out of business. No one's going to want to work with them. Now guys, I want to make sure you understand that we do not tell cash buyers what we think the ARV is. We do not tell them what the rehab is. That's up to them to decide. And by you saying, 'Oh, I think ARV is this, and I think the rehab is is this: you're shooting yourself in the foot because you could be completely off. They could think that the rehab is $5,000 when you thought it was $50,000, or they could think it's $100,000 when you think it's $10,000. Then you lose all credibility. Just have them go look at it or send them pictures. There's no reason for you to try and figure out what you think they want to hear. They're the buyer. If they're interested in serious buyers, they want to look at it. That's all they do, and that's all they want to do. And I can promise you that the buyer doesn't does not want to talk to your seller and try to snake the deal from you and negotiate a deal with them. They do not want to deal with a seller that is dealing with distress and have to deal with the negotiation part. Good buyers and top buyers that we work with want to stay in their lane and do deals, all right? And they want to just flip a house. So stop worrying about buyers trying to steal your deals. Now, how to work with these buyers and use the specific script that we use to get them to give us the ARV and their offer price before we have it under contract or not That's something specific we teach within our painless flipping apprenticeship. So if you're interested in learning how to work with buyers directly and not reverse wholesale but pre-flip, to work with them to get deals and stop canceling all your contracts, just go to the link below and check out our painless flipping apprenticeship. Now that you understand how important it is to work with top cash buyers that can give you exactly what they'd offer before you even make an offer to the seller or have it under contract, I want to make sure that you guys aren't falling into these pitfalls that are going to cause you to lose out on more of these deals. So number 1, quit giving the price to the seller immediately. If you ask the seller what they want for the house, 99.9% of the time gonna tell you too much. Everybody wants too much for their house. I remember when I sold my house, I wanted way more than it was worth. And then eventually, when no one was willing to pay me for it, I came back down to reality. That's what the pre-flipping method does. It— you do not have to bring sellers back to reality yourself. Leverage the buyers to do that. I've seen a lot of people do this. They just say, well, um, Mr. Seller, I see that this house sold for $100,000, and I saw this house sold for $10,000, and I saw this house sold for $30,000, and I know you want half a million, but these comps tell me that I wouldn't be able to do that. They don't trust that. I know, guys, because I used to do a lot of Zoom calls with sellers where I would show them comps, and they would— this is everything they'd say. They'd be like, oh, okay, you know. And you could they see in the back of their mind that they're like, this guy's just cherry-picking comps, he's trying to make my house look smaller, but I know better than he does. So that's not going to convince them. What is going to convince them, what's going to reset their expectations, is you sending real buyers through their property, whether you have it under contract or not, letting them know what you're doing, and then finding out what your buyers would pay and leveraging that feedback. That's what's going to reset their expectations, not you telling them, oh, this house next to yours sold for a dollar, this one across the street sold for $2, that means your house is worth, uh, $1.50. They don't care about that, okay? That you could show them millions of comps. Even real estate agents that deal directly with sellers that want the most for their house, they struggle convincing people what their house is worth with data. So it doesn't work. The best thing that works is getting real data, real information, real offers from buyers. That's the best way to reset expectations. Now this is another thing. If you are only able to wholesale, if that's your only strategy and you're a one-trick pony and you just keep on making low offers, you're not going to do a lot of deals. That's just how it is in this day and age. You have to be able to know how to do novations. You need to be able to do creative deals. You need to be able to do wholesale, whole tail, burr. You need to be able to do all these options because when you are talking to a seller that wants too much money and you take them through the pre-flipping process where you go and you show them what what buyers are willing to pay. You take them through this process and you make the offer when you have a firm understanding and an offer that no other wholesaler can beat. You're coming in with real earnest money down, you're coming in with zero days due diligence. After you've presented that and you say, hey, this is what we can do, 100%, let's get it done, and they say no because they want more— if you are just done there and you're just like, well, I guess they didn't accept, then you're losing out on deals. What we do is we take them through the pre-flip method. If we didn't already originally get it under contract because it already made sense at the right price. We pre-flip it, and if that doesn't work, we take them through the next step. We say, hmm, okay, well, hey, look, this is realistically what cash buyers are willing to pay in this area. If this doesn't work for you and you still need to sell, there's a couple different options we can explore. Number 1, we can take this to the open market. We can see what people are willing to pay that potentially are going to pay more, not because they're looking to flip it, but maybe they're going to live in it. Okay, that's an Ovation. We can take care of everything for you. We'll give you this price and you don't have to pay for commissions, fees, or anything like that. That's all taken care of. This is the price you agree on. Novation. If they don't agree on that and they don't want to take it to the open market and put it on the MLS, then you say, hmm, well, we could get you a little bit higher price, but we'd have to structure something creative. And then you can negotiate a creative deal. Now, usually you can pay a little bit more creative, not like a ton more. Well, I guess depends how you structure it. But that's an option. So again, if you're a one-trick pony and just wholesaling, then you're shooting yourself in the foot and you're losing out on a lot of deals. So I want you to avoid those things, guys. Don't talk price first and just try to negotiate specifically strictly off a price, because everybody wants way too much for their house in the beginning. That's just how it is. They need to reset their expectations. Pre-flip it to reset their expectations, then go novation, then go creative finance, then do the other options. That will help you get the deal done. But I've thrown a lot at you, and the videos that I make on this channel are going to explain more and more how to pre-flip and how to do deals with any seller. It's not like every time we follow the exact same step process in the sense that we get it under contract, we don't get it under contract, or we wholesale it, whole tail it, burr. It all depends on the seller situation. So when you start looking at this business as an advisor, as you start looking at this as a deal consultant instead of I'm just locking myself into I'm a wholesaler, cash buyer, that's all I do, you are going to do more deals. That's just how it is. We're able to do 1 out of 8 to 1 out of 15 qualified leads to a deal. Now that's a lot lower than the average wholesaler. Why? Because we have all these different options we're able to take sellers through, and we're able to work on deals before we even have them under contract because of our process. But when you box yourself into, oh, I can only do deals when I talk to a seller and I get it under contract, you're really limiting yourself because again, you're following the traditional wholesaling model and you're guessing, you're guessing what somebody wants for the house. You have no idea. Last thing I'll tell you about this to prove my point, we have a house in Atlanta under contract and we have gotten offers on it from $100,000 to $267,000. That's a $167,000 difference in the offer range and prices we're getting. Isn't that insane? How many deals are you missing out on and passing up on because you are off, because you think it's worth $100,000 when there's someone willing to pay $267,000 for that? Did I know that unicorn buyer existed? No, I thought it would be a lot lower, but I wasn't going to put my neck on the line and tell a seller, no, no one's gonna pay more than this. I didn't know. That's why we pre-flip it. That's why we do novations. That's why we let the market determine what buyers will willing to pay, and not just what we think. Because again, when you think and when you guess, you're losing a lot of deals. All right, so if you like this video and you want to watch more like it, check out the next video where I explain what I would do if I had to start wholesaling again from scratch with $0. Check out the next video here.