On Messages

My business partner and I have been hard at work getting everything set up. We want to present ourselves very professionally and set apart what we are able to do for our sellers and buyers from other operations and other investors in the area.  We feel that a web presence, a cohesive marketing message, and a lot of the details that many other real estate investors pass up on is the way to go about that.  To your left you'll see our logo.  We're pretty proud of it.  We worked with a graphic designer, presented our image of ourselves and a few ideas.  After a healthy back and forth this was the final product.  We feel it evokes everything important about our image that we want to convey.

Our original design idea was a pair of gloves.  The designer we worked with shot us 6 very radically different ideas and a championship belt jumped out as exactly the right thing.  Another round of feedback and we landed on what you see.  It was worth paying for this for the logo alone, even if we incorporate it in a clumsy manner.  A logo is something many other investors in the area will not have.  Many of the individuals who get into investing of any sort think of themselves as just that: Individuals.  We are an organization.  More importantly those who do business with us will also understand that even if they only ever see me -- we are a company that values the way it looks.  This gives an edge.  If you get the same financial offer, will you take it from the guy who scrawls it on a napkin, or the one who uses a company letterhead on a typed proposal?

Are you just bragging on yourself, here, or what?

Well...  A little.  But mostly I'm interested in explaining the importance of marketing, branding, image, etc.  We have a business name.  We have a logo.  We have a website (currently under development with another designer and soon to be released).

We didn't get tied to a single idea.  We came up with a lot.  We sat and brainstormed potential business names.  The first idea we had was UnReal Estate.  So we plugged it into a browser to see if that URL was taken.  It was.  We kept working on it until we came up with something that not only spoke to us as individual, but had an imagery we could leverage, as well as a website we could purchase a domain name for.  This might not be important to you and your business... But our main goal is to be more professional than our competition.  It's how we expect to set ourselves apart.

On top of a website we also did a lot of brainstorming of phone numbers.  A few posts ago I talked about registering Google Voice numbers to give you a custom vanity phone number for free.  Here's the list of what we've registered and are putting to use in our Pittsburgh area (724 and 412 are local area codes.  330 is northern ohio, which many people in the area also know).

724-315-7866 / 724-315-SUMO

412-407-3422 / 412-40-REHAB

330-227-4735 / 330-CASH-SELL

802-432-8993 / 802-HEAVYWEIGHT

They are all evocative and easy to remember.  The local phone numbers are important because many individuals like to know they are dealing with someone locally.  The 802 number just made us giddy when we were able to register it.

Why do you need 4 phone numbers?

Strictly; we don't.  It's a good idea, though.  Doing a custom ad campaign for your radio ads?  Want to answer your phone and have your voice mail respond directly to what was said?  Putting out bandit signs in a certain neighborhood for only one particular property?  Want your buyers and your sellers to call different numbers?  Every one of those choices and more are legitimate.  We'll likely end up using more than just four.  Once we get moving along an 800 number will probably be worth the investment.  If there's a single thing that says to me "professional" it's an 800 number.

Catchy Stuff

Heavyweight Real Estate gives some mental images and marketing ideas, too.  Tie-ins with local wrestling or boxing matches and possible sponsorships are a possibility.  Using phrases like "in your corner", "knockout", and "on the ropes" in our marketing messages are a must.  That my partner's grandfather was an amateur boxer many decades ago also gives us a strong family feeling for those who value that in their business partnerships.

We're very pleased with how our image is coming together.  Any zingers you've thought of for your own (or someone else's) business?  How important is it to you to see those little professional touches like a vanity number when choosing someone to do business with?

Who Would Buy a Wholesale Deal?

In my last post I talked about the basics of what it means to "Invest in Real Estate".  The simplest of the three forms of investing I outlined was wholesaling.  In the most basic of terms wholesaling is playing the middle-man in a deal.  This post is about why someone would buy from a wholesaler, and to touch on why one would sell to a wholesaler, which obviously covers in more detail why you might decide to wholesale properties.

The anatomy of a wholesale is pretty simple:  Find a seller, grab it at a good price, make sure there's a lot of meat in there, and pass it along to someone else who makes a very significant profit of their own.  That has a lot of "...but, why?" questions in it.

Why would someone sell to a wholesaler?

In most cases the person with a property they no longer want doesn't care how they get the money you've promised them, as long as it arrives in their hands at the date agreed upon, they will walk away happy.  As far as this person is concerned you are a buyer.  They have something they are selling, and you came along and bought it.  If you are structuring deals properly you won't technically be buying it...  You'll be assigning the contract to someone else, or doing a simultaneous close.  Both of these are just contractual terms that basically mean that you never owned the property.  You found a buyer for the seller, and you built a profit into that deal for yourself.  But the why is because the seller is getting paid.

Why would someone buy a wholesale property?

Buyers, in an economic sense, are those who create demand for a product.  Many buyers in the real estate investing business have more money (or access to more money) than they could reasonably tie up in deals.  The plain and simple answer is that you are providing a sensible product at a price that makes a reasonable profit.  A buyer will buy from you as long as the property will profit them.  When you wholesale a deal the goal is to structure it in such a way that it's attractive to a buyer.  Your value to a buyer is that you have a deal and they have money.  To be a successful wholesaler you just need to have marketing in place that generates deals that buyers wouldn't find on their own.  You provide a unique deal to them, and it changes hands to them.  They'll rehab it and make (in most cases) a lot more money than you because they did a lot more work.

If a rehab makes more money, why bother doing a wholesale?

There are a lot of reasons, but one of the main is risk.  In a wholesale you are exposed to very little.  This is another reason you'll generally make less money wholesaling.  You're doing less work, exposing yourself to less risk -- so your reward is smaller.  Another reason to wholesale is because you lack the team necessary to rehab.  Rehabbing takes experienced contractors who can do the work cheap and efficiently.  Finding a contractor who does a good job can often not be as easy as you'd like it to be.  If you're incapable of fixing a property it's a much better idea to sell it for a few thousand dollars in your pocket and let someone with the resources do the repairs and make the tens of thousands.

Won't a seller and a buyer just cut you out of the deal?

Sometimes they will.  Sometimes a seller will see the contracts and learn they could be selling the property with the profit you would be making in their own pocket.  Sometimes the other side of that where a buyer will go around you and buy it at the price you negotiated with the seller themselves.  This doesn't serve the buyer well.  You found one deal that was going to make them money.  You are likely to work with them again in the future and make them (and yourself) even more money in the future.  Some individuals would rather have a small gain now rather than build a healthy business relationship.  It will happen sometimes.  The real estate investing landscape is used to this sort of deal happening, though -- so it won't be as common as many fear.

There are bound to be a million other questions that I've missed.  These are the obvious ones that jumped out at me when I first heard of the concept.  What would you like to know about wholesales?  Investing in real estate in general?