The Science of Flipping - Finding Buyers Outside Of Your Market or Virtually

Episode Date: December 1, 2020

Have you ever come across a deal that's outside of your market? Maybe a lead came in and there was a deal that you'd for sure close on if it were in your market. Well, there are still ways to make money on these deals!

What is up? What is up, everybody? Welcome back to the Science of Flipping podcast. I am your host, Justin Colby. And this podcast is all about the right systems, tools, strategies, techniques, tips you go to thescienceofflipping.com. Thescienceofflipping.com, a lot of free resources over there, as well as if you have any questions about your business and your market, you can schedule a call with yours truly right there at thescienceofflipping.com. Today, I wanted to go over this idea of selling a deal that is not necessarily in your true market. Maybe it's an outlier deal. Maybe you need to, you know, figure out who's out there and what, you know, type of movement you can get. So I'm going to give you some strategy here on finding buyers and how to actually find those buyers very quickly. So you don't pass up on a lead if you are doing like, let's say PPC, or you're working with a seller that has another

property outside of your direct market. This is really important because for those of you that are marketing and are spending money on PPC, direct mail, cold calling, texting, you will come to find out there are deals that you are going to get that aren't necessarily in your primary market. And so I want to talk through a very quick strategy for you to see, is there movement there? Is there a deal worth having? And where can you find these buyers? So the first thing I would urge you to get is PropStream. If you don't have PropStream yet, just go to tsofdata.com. Tsofdata.com stands for the science of flipping. I'm sure you've heard me talk about this a lot. And you want to get a free seven-day trial, tsofdata.com for your free seven-day trial. Now, the reason why I want to do that is I want to

start with looking up flippers in PropStream. Are there any flippers in the area? And I believe if I say this right, but the criteria for a flipper within PropStream is someone who has bought a property and sold a property on the MLS for a greater value within two years. They consider that to be a flipper. And so if you go and find a property, let's say you start talking about a property in my part of the world, let's just call it Kingman, Arizona. And there's so many Bullhead City and there's so many other outlier property or cities that I will get leads from through my PPC. I want to make sure there's a viability of a deal out there. I also want to make sure I'm in a good threshold of price point, right? You know, if it's a nine acre desert piece

of land out in bullhead city, not around anything, and someone wants to sell it, that's probably not my ideal property. But I also don't necessarily want the property that someone's trying to sell for five, 10 grand. I usually try to keep a certain threshold of a property level to make sure someone would have some realistic interest in it, right? And so I want to, you know, make sure that there's some level of, again, without being specific, but you know, is it going to be 40, 50 grand, you know, of the property, right? So again, if it's a mobile on a piece of land, you know, will people want that? Are there flippers out there?

Are there properties moving out there? Et cetera. So you start with flippers in PropStream. I then would encourage you to jump on PropStream as well as Zillow to start looking for active listings and start having conversations with the agents. Are people buying? Have you had a lot of interest? Have you had any offers? How can we put together a scenario where I have a property that's not yet on the market that you could bring a buyer and I'm happy to pay you, right? These are the conversations that you need to be having when you have a property outside your market. Realtors will move your needle when you have a property outside your market. And truthfully speaking, your realtors are gonna move your needle in your market.

If you are not working with realtors as a whole, you need to start doing it, right? I don't care in market or out of market, but you guys should be getting certain leads depending upon your marketing strategy. Now, if you're door knocking, this may not be as relevant, but if you are texting or calling or PPC or direct mail, you will be getting leads that are outside your market. So realtors are the name of the game. You want to make sure that

there's enough flippers and investors in that area. You can do that through PropStream. PropStream also has cash buyers that you can look up and you can start to sift through your cash buyers as well. But ultimately, you know, I never want to lead to go dead, right? I want to make sure I'm making an offer on all leads because the reality is I paid for it, right? And so I want to make sure I'm monetizing those leads. So ideally, I want to make sure if I can make an offer and it's an area that I'm not that familiar, I'm not going to be that aggressive with it. You know, there's certain school of thoughts where you just want to run, you know, a typical Mayo formula.

And then I have spoke to other people, you know, who are doing just a percentage of Zillow, right? Or a percentage of what they consider to be ARV. One of the things that we're doing in Oklahoma City, when it's a little bit more rural in Oklahoma, it's not quite in the Oklahoma City market. We're taking anywhere from, you know, 48 to 53% of ARV as kind of our threshold of where we want to be, right? So if the ARV kind of back to where I was going initially about the, the, you know, value of home, I don't really want a property that has an ARV for less than $100,000. Okay. For less than $100,000. And so let's just use $200,000 as an example, ARV. So, you know,

my threshold in a more rural market, something that's away from my known market, my threshold for that is going to be, you know, $106,000 total, 53% of ARV. I would obviously like it closer to 48% ARV, but that gives me a pretty good cushion there to do the deal. Now, depending upon how the negotiations go, sometimes you'll get it, sometimes you won't. But at least you have a foot in the door to continue those conversations. As you are doing that, finding out from agents what properties are going for, do they have interest both in Zillow? I'd be looking up active listings in Zillow and closed listings in Zillow as well as

PropStream to find out what type of interest is there, what is moving. And if those agents would have a buyer, I also will leverage those agents a lot of times to go take pictures if need be. Sellers a lot of times will take pictures for me and send it over my way doing it virtually again outside of your market right so everything would be virtual this is this this episode really is not just for like you get a lead outside of your market like in a kingman arizona which is only an hour outside my market i'm talking also you know you might be doing this virtually so how do you uh you know attack it virtually i would attack you know doing deals virtually be doing this virtually. So how do you, uh, you know, attack it virtually? I would attack, you know, doing deals virtually the same way I'm telling you now, obviously, you're not always going to get offers approved at 48 to 53% of ARV, but that is a good bandwidth,

uh, or that's a good, uh, mark point of where you would want to be. But listen, if you're doing your job well with the realtors, talking to the realtors, finding out what's moving, do they have buyers? Is it hard to come by properties? You'll know whether you can go up or not, but that's predicated on your knowledge of the market and the interest in buyers. And again, how many flippers in your market? You want to make sure you have 15, 20, 25, 30 flippers when you go over to PropStream in that market to justify that there is an investment space in that market, right? And for you to continue having that conversation with the seller. And so, you know, selling properties is in large part when you are contracting properties outside.

This is where the work really comes in. This is much more where you need to have the process, the systems, the, then that takes all the work out of the assumption on your actual offer. Where the work really comes in is trying to figure out where does it sell, right? Is there buyers? What type of buyers are working? Are they flipping it? Are they buying, holding it? What type of buyers do you actually have? So hopefully this helps. If you guys haven't yet, make sure you go over to my YouTube channel. It is just should help you guys when trying to deal with buyers outside of your normal market that you may be working currently.

Again, people use just as a refresher or to conclude, people use a percentage of Zillow. I've heard, you know, 70% of Zillow. Others, you know, such as myself will tend to go a percentage of ARV anywhere from 48% to 53% tends to be the right number, give or take a percentage. Um, and then the market that you're most familiar with. And you can take that same knowledge and start implementing it virtually like we did in Oklahoma city. So if you like this, I'd love a review always helps the, uh, iTunes and Spotify rankers to get a review there. Um, would love all the five stars I possibly can get, but be, uh be authentic with your review there. Otherwise check out my YouTube channels. I'm dropping a video a day over at YouTube. You can do youtube.com forward slash Justin Colby,

or just throw my name in there. Hopefully this finds you guys. Well, we will talk soon. Peace.