In my real estate business, the easiest thing to me is to drive leads. I consider myself the Nike of driving leads! Well maybe not a Nike, but at least an Adidas or an Under Armor before they became popular. If you can’t drive leads, you can’t make offers and if you’re not making offers, you’re not closing deals. Plain and simple. But when you’re making offers, how do you get them accepted? Before we get into how to get more offers accepted, I have to share a BIG SECRET with you that will most likely increase your profits and efficiency in closing deals.
This can be controversial but I’m here to bring you the truth. When it comes to closing deals, make sure that you’re marketing in the right areas. Some people have a specific niche in working in the upper class demographics of real estate. Most of these type of investors have invested time and relationships to get to this point. If that is you, good for you, but if this is not you and you’re still trying to get consistent deals each month, I recommend that you target the lower- middle class, middle class, and upper-middle class demographics. I will be honest and say that though you may find deals in the lower class areas, chances are that you will have more issues closing deals at the title company because more times than none, the title company will find issues with paperwork which make things more complicated. In my experience, the owners of these homes did not have clear titles. The owners would buy the houses from the courthouse auctions or the property was received by quit claim.
Because these transactions are done at the courthouse and not the title company, the proper due diligence is not made to verify that there are not any previous liens or issues on the property. In other words, in these cases, the title is “dirty” and thus you’re not able to properly close on the house yourself. I’ve helped out tons of people in these situations and I’ve even lost money multiple times just to help individuals out. Being able to research the legal things has made me a better investor over the years but I prefer quick closings. The point here is to target middle class to upper-middle class as much as possible.
If you are in a market where this is not possible and you’re finding success targeting lower class demographics, by all means, continue to do it and make money. I closed a lot of deals in the “hood”. There is nothing wrong with that. However, if you want to make $5,000+ per wholesale or $30,000+ for a each flip, you have to make sure you’re getting leads in the right markets. You will spend the same time and energy making $1000 as to if you completed the same deal for a better market where you can create a bigger spread and make at least $5000 for a wholesale.
What can I say, I just want to be real…