Wholesale Real Estate
An offer a day keeps the bill collectors away!
By Stephen Cook
May 9, 2005, 10:51

Having written a course on wholesaling, I get a ton of e-mails from people who ask me questions about making offers and what they might be doing wrong. Many of the e-mails that I receive read something like this:

Dear Steve,

I recently looked at 20 homes for sale in my area. After inspecting the homes, I decided to make 2 offers, but in each case the seller's Realtor just laughed at me. I mean, they really laughed hard! I'm not getting any offers accepted and I'm becoming very discouraged. I don't think that we have deals like you do where I live. Can you help me? It just seems like most homes in my area sell for the full asking price or more.

-Discouraged Newbie

Discouraged Newbie is making one or possibly two mistakes common to new investors. They aren't targeting motivated sellers and/or they aren't making enough offers.

Targeting Motivated Sellers

Where I live, most homes sell for their full asking price and above as well. The only difference between me and Discouraged Newbie is that I concentrate on the sellers who are motivated to sell at something less than full price. Typically, these are banks or individuals who have a VACANT property which needs work. I stress the word "vacant" for two reasons: 1) vacant properties are nothing but trouble for the owners and 2) 99% of the properties I have bought over the past three and a half years have been vacant.

Handling Rejection

Even though I focus on motivated sellers, most of them aren't motivated enough to accept my offer. If I make 30 offers, with 27-29 of them, chances are that the seller is going to say "No," or someone else is going to offer more. I strike out much more often than having a seller say, "Yes," to my offer. But I'm not concerned about all of the, "No's." I accept them as part of the process and forge ahead, knowing that if I make enough offers someone is eventually going to say "Yes," particularly if my offers are targeted toward sellers who have some degree of motivation.

Making Lots of Offers to Keep Your Funnel Full

In this business you cannot make money without inventory. It is extremely important that you always keep your pipeline full, and the way to do that is to constantly make offers. Many people come and tell me that they look at homes all the time but never buy anything. They say they find motivated sellers but none of their deals ever goes through. My next question to them is, "How many times have you put an offer on paper?" They are usually able to counter their answer on one hand.



In order to buy properties, you must make offers. Sounds simple, right? Yet it's surprising how many new investors have trouble overcoming this hurdle. Personally, I average 40+ offers per month, sometimes many more. Over the course of one weekend, I made about 40 and bought 9 houses on Monday. To this day, this stands as one of my most productive offering sprees, netting about 1 out of every 4 properties (each was sold separately, by the way, not as part of a package). And you know what? I never would have bought all of those homes if I hadn't made those 40 offers. Just like I would rarely, if ever, buy anything if I only made one or two offers a month.

When I look at 20 homes I make 20 offers, not just 2. In fact, sometimes I make 30 offers when I look at 20 homes. I make offers even on the homes I couldn't get out to see. If I'm targeting the right properties (i.e., those with sellers who may be motivated), odds are that there will be several sellers out of 20 with enough motivation to seriously consider my offer. What I don't try to do is select who those 2 or 3 sellers might be. The chances of me picking the right ones are very slim. And why should I? My low offers will fish out the sellers motivated enough to respond and thereby tell me where I should invest my time. Too many wholesalers try to pick the motivated sellers from a group by themselves when making offers is the easiest way to find out.

I make offers on every single home that interests me where I think the seller might be motivated. Some I inspect; some I don't. Some are priced ridiculously high; others are priced ridiculously low. Some are in great areas; some are in bad areas. Regardless of location, condition or price, there is a number that works for every home and that is what I offer. On occasions, I've asked sellers to pay ME to take their homes because no other number worked for me. Sure, most of these offers are rejected just like most of my other offers. Even on the weekend that I bought 9 homes, most (31 of 40) of my offers were rejected. In general, though, some of my offers are accepted, and those are the only ones that count.

I hope that this will inspire some of you to get out there and start making more offers. If you make it your goal to make an offer a day, then you will start to buy properties. If your offers are at the right price, then you will sell properties and make money.
You don't need to make offers as I do, but you do have to make some if you want to buy houses. Do your homework, get your questions answered, and overcome your fears. Then make it your goal to average an offer a day because, as we all know, "An offer a day keeps the bill collectors away!"

-Happy Investing!

Steve Cook