In today’s post, Brooks Conkle of The Southern Investor shows you how to profit from competition through cooperation…
The last 2 wholesale deals that I have done used a key strategy that a lot of investors, especially new ones, don’t use. What was the strategy?
Relationships W/ Other Real Estate Investors
Typically thought of as competition in the world of wholesaling, other investors can be a valuable source of business given that you take time to develop relationships with key investors and keep in touch on a consistent basis.
Why do I think that having ‘friendly competitors’ is a great idea for your business? Because you won’t always have all of the pieces to the puzzle that are needed to make a deal successful. The Property, The Buyer, and The Financing – all 3 of these must be had in some shape or fashion in order to cash out a deal.
Buyers go through cycles and even serious buyers are not always buying. You might send them a deal and they may be busy fixing properties, working on refinancing others, not like the area, etc – anything can happen in their lives that can delay them buying your property. You may find what you think is a perfect deal but for some reason the buyer list that you have developed is not biting on your property.
What should you do?
Break out your trusty relationships with other wholesalers. Offer to JV (joint venture) with another wholesaler that can bring a buyer in exchange for 50% of the profits. I believe that if you incorporate this strategy that you will experience more long term growth and will generate more profit than if you don’t. You can do more deals in a shorter period of time if you do and start incorporating the velocity of money into your business model.
Let me show you how…
If you have a list of say 100 buyers and you know of 5 other serious wholesalers that have the same, then you have expanded the number of buyers for your property from 100 to 500. The same works with deals. If you are marketing for deals and so are the other 5 wholesalers in your network, then you potentially have 5 times the number of deals to market to your buyer list.
I hope that you choose to see other investors as potential profit centers and not just competition. I urge you to begin building relationships with other wholesalers today!
Brooks Conkle is a world vagabond and outdoor enthusiast that renovates and wholesales properties in Lower Alabama. He started The Southern Investor to chronicle his business and pass on knowledge to others.