The Science of Flipping - Buyers Rules Of Engagement As A Wholesaler

Starting point is 00:00:00 What is up everybody? Welcome back to the Science of Flipping podcast. I am your host Justin Colby and on this episode we're going to be talking about buyers rules of engagement as a wholesaler. I'm now wholesaling in seven different states, so I absolutely am vetting out buyers and how to handle buyers and managing their expectations. So on this episode, we're gonna talk all about that to make sure your buyers don't go around you and start talking to sellers, so stay tuned there.

Starting point is 00:00:42 If you are not yet subscribed to my YouTube channel, go to youtube.com forward slash Justin Colby. to sellers, so stay tuned there. If you are not yet subscribed to my YouTube channel, go to youtube.com forward slash Justin Colby. Make sure you subscribe as I drop three videos a week right on YouTube, all things business, real estate, and entrepreneurship. So make sure you go to youtube.com forward slash Justin Colby and subscribe. And on this podcast, we talk all things real estate. So this is always about the processes, tools, systems, strategies for you to become a successful real estate investor yourself, whether that's wholesaling, flipping, wholetailing, buying and holding, seller finance notes, creative finance, you name it, it's all here on the Science of Flipping. So welcome back. And on this episode,

Starting point is 00:01:23 I want to talk about something that was brought up to my attention from one of my high-end elite clients who is doing deals outside of his primary target market. And so he wanted to know a little bit about how to protect himself better when dealing with buyers that he's not 100% certain whether they're the real deal or not. So he is in an elite level of coaching. It's a higher level of coaching with myself. If you have any interest in that at all, go to thescienceofflipping.com forward slash, or I'm sorry, just thescienceofflipping.com. Fill out an application. We can see if you would be a good elite level or level up coaching is also an opportunity. So with that all being said, guys, you know, one of the things that I explained to him that I'm going to also explain to you is this idea of there's no 100% solution

Starting point is 00:02:11 to this. His concern was, you know, how do I make sure a buyer can't go around me? And the reality is there's no 100% certainty that you can make sure that happens. Yes, you can cloud title. I have clouded title hundreds, if not thousands of times before in my career. And that does inhibit for some, you know, to some level, the ability for a buyer to actually come in and quote unquote, steal your deal. Because the seller essentially wouldn't be able to sell it around you. So what I mean is you just record an affidavit down at the county recorder's office alongside of your purchase contract. And between the two of those, you are actually able to quote unquote cloud title that you have a contract on the property. Now, the hurdle there is that doesn't

Starting point is 00:03:02 stop your buyer from trying to circumvent you. it may stop your seller from circumventing because you just say hey you know now that we have a contract we're gonna be able to perform on that contract and you know you can't sell from around me now here's the thing I don't actually have that conversation with a seller because for the most part sellers want to just sell their home especially in the space that I live in where I market very heavily I spend a lot of money marketing each and every month. And so they want to sell. They literally are motivated to sell their homes. And so for me, I don't deal with the seller very often going around. This is about the buyer. So how do we make sure our buyers

Starting point is 00:03:42 stay true to us and are the real deal? Are these real buyers or are they just other co-wholesalers? So let's talk about that part first. Are they just co-wholesalers? A lot of people out there are. For one reason or another, there's a lot of people, even including myself, that run a business model that I co-wholesale from other investors to my buyers. But I also do a lot of my own direct deals where I'm direct to the homeowner. And whether it's they've heard me before, they've heard others, or they run a model like Kegley, there's a lot of other people that

Starting point is 00:04:14 are trying to just take someone else's deal without even asking them and then selling it to their buyers. That's the division of myself and others is I always have a conversation with an investor that I would sell their property. I'd say, hey, listen, I have buyers in that neighborhood. I want to make sure it's okay with you. Would I be able to market your property and sell that to my buyer? And that's the conversation I have with the other investor, right? A lot of the other investors out there don't have that conversation. I do. And so, you know, there's a lot of people out there doing right now. So one thing that you want to do when talking to a buyer is saying, hey, how many homes have you bought this year?

Starting point is 00:04:56 How many homes have you bought this month? Are you looking to flip them, wholetail them, or keep them as rentals? Hey, listen, do you ever wholesale other people's deals? And you want to ask these questions to figure out, are they a real buyer or are they just a co-wholesaler? Because a buyer who is a real buyer, they're going to know these numbers. I bought 26 flips this year, right? If they are not wholesaling other people's homes,

Starting point is 00:05:20 they're going to say, no, I'm not wholesaling other people's homes. If they are, they might say, yeah, from time to time um you know but really i'm looking to buy it for myself okay mr buyer here's what i like to do if you are trying to wholesale the home let me know first right because ideally i'm sending it to you to buy as you just said you bought 26 flips this year ultimately i want you to be a buyer on my list is that pretty fair to say and ideally i'd like you to be a vip buyer someone who i can call or text out of the gate and not even have to send an email is it good for you know are you buying enough are you looking to buy enough to finish this year to put on more of a vip uh you know list that i can call or text and then Understand what they're trying to do now. Let's say as my student had this question

Starting point is 00:06:08 You have this deal and you're trying to vet them out and you're now also trying to protect yourself you say hey listen I've already talked to the seller that I'm bringing in other people to see the home. They're all part of my team They're either my money partners. They're my Contracting partners. They're all part of my team So here's what i'd like to tell you is you've probably heard this time and time again do not talk to the homeowner i'm only telling you this because we haven't done a deal yet together but i'm sure you're super experienced and you get that don't talk to them i've told the seller to not talk to you when you walk through the home because you are on a job and i'm paying you to be there so that you can get done what you need to do. And I've also talked to the homeowner about if

Starting point is 00:06:49 they are talking to you, please give me a heads up because I've told them and instructed them not to talk to you because I'm paying them to be there. So I want, you know, them to stay focused. So I've also told the seller to tell me if you do, know talk to them and for the most part as someone who has bought hundreds of homes from wholesalers myself bought them to flip uh i know the game i know i can't talk to the seller because it just takes that one bad move before that wholesaler won't sell me another home again so i don't want to play that game. Are there buyers out there that are going to ignore all of this advice that you give them? Yes. Are there buyers that are going to try to go around you? Yes. Is there anything you can do with 100% security that a buyer cannot go around you?

Starting point is 00:07:38 No. And I say that because the seller may still sign their contract. So it's really, you know, an A and B scenario. You need to A, make sure the seller has proper expectations. I'm going to have multiple people of my team to come through this property. Some are going to be my finance partners. Some are going to be buyers that I work with. Some are going to be contractors that I work with and other investors that I work with. And then B, having the conversation with the buyer. Hey, the seller knows you're going to be there. He knows not to talk to you. He knows what you're trying to do. He knows you're a part of my team. So do us both a favor and just don't talk to the seller. If you do that and you record your contract down

Starting point is 00:08:21 at the county recorder's office on title, you have given yourself the very best chance you can to trust the buyer. Again, there's no foolproof method here, but for anyone who's going to be that snaky and sneaky and just try to steal the deal from out from under you, it only takes one time and you'll never send them a deal again. You'll blacklist them off your email. You'll delete their phone and block their phone on your phone. It just takes one time and you'll never send them a deal again. You'll blacklist them off your email. You'll delete their phone and block their phone on your phone. It just takes once. But the best way to prohibit that is don't go out and just build your buyers list with a bunch of emails from Facebook. Actually have conversations with these buyers.

Starting point is 00:08:59 Give them the proper expectation. Understand what they have done, what they're trying to do. And, you know, ultimately whether they're, you know, flipping or, um, buying and holding, but having the conversation and building that rapport, most, you know, shady people who are going to try to steal your deal. Once you have that conversation, they likely won't do it. Right. Uh, they, they feel a sense of like, ah, I don't want to get caught or you know i don't want to do that to justin he was a nice dude whatever the cases are that conversation will really reduce it and so that is my suggestion here on how to start to build buyers lists in different cities

Starting point is 00:09:36 different states maybe that you're not physically in so that you can start to trust your buyers and lastly if you do have boots on the ground in your market, obviously, that always helps. If you have a go-between mediator, if you will, between the seller and your buyer, if you can have an agent, another investor, an employee be there while that's happening, that is obviously the best foolproof plan that you can come up with when dealing with buyers. So hopefully you guys like this. Again, I'm dropping another video today on YouTube. So go over to youtube.com forward slash Justin Colby. If you have not yet subscribed, you're going to want to check this video out. Also, these podcasts are actually on my YouTube channel and you can go over to YouTube and watch the podcast rather than just listen if you so want to. So again, youtube.com forward slash

Starting point is 00:10:26 Justin Colby. Hopefully this helps you guys. And I look forward to talking to you, seeing you on the next podcast. Peace.

The Science of Flipping - Buyers Rules Of Engagement As A Wholesaler

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.