Finding Reliable Disposition Partners

Finding Reliable Disposition Partners

Converting Your Assets Back to Cash is Critical to the Wholesale Business Model

Hi all! What’s going on? Today’s topic is about disposition, and how to identify and develop valuable partners for your real estate sales transactions. Unless your business is (or has a strong unit that is) a buy-and-hold model, this is a critical component for success. Liquidity is the fuel for activity, and if all your funds (and credit) is tied up in physical properties, your deal-making will be dramatically restricted.

Jake and I built our company by being relentless deal finders, and we are actively marketing in many different channels to find new purchase opportunities. So it goes without saying that in the wholesaling business, we always need to have a healthy audience of buyers too. When we first started in January of 2021, we were so focused on finding the deals that we didn’t spent much time thinking about dispositions. And when it came time to sell the houses we acquired, we learned pretty quickly that you can’t just rely on one or two buyers to snap up every property.

The good news is there are plenty of avenues to pursue. Between the hedge funds, private buyers, buying groups, the one-off acquisitions and even individuals or families looking to purchase a home to live in, you should be able to build a solid list fairly easily. But turnover in all these channels is high and you need to make sure you are constantly adding new outlets.

Recently, we actually made our first hire at SecuRealestate of a full-time employee to do just this. By accumulating e-mails, and sending out texts and making phone calls, we’re building up a good-sized audience of potential buyers that we can quickly market to and offer new properties we find for acquisition. Once we identify a potential new buyer, we have a brief screening process to quickly weed out the ‘tire-kickers’ and will typically have an in-person meeting as the final stage to our vetting process.

As I write this, I’m preparing to have lunch with a potential buyer that we may do some business with in the near future. My instinct grades them as a ‘medium’ … someone with a small team, currently have about 30-40 buy-and-holds in Lake County and the surrounding areas that is looking to ramp up their portfolio. No whether this meeting with turn into a long-term partner for us or not, but it’s most certainly worth an hour and a $40 lunch to find out.

Because that’s our goal, and it should be yours as well: finding and grooming buyers with whom you can establish a long-term relationship with—a partner to your business for all practical purposes. Once we do decide to sell to someone, we will typically bring them 1-2 deals and build up from there. That has been a good approach for Jake and me, and we have been successful with that enough times now that we have a small but trusting cadre of buying partners to work with.

And that makes a strong win-win relationship for both parties. Because when we know what our partners are buying, and we know we can count on them to close a deal without any hold ups or headaches, we can then invest our company’s resources (i.e. marketing dollars) into their areas and niches to actively find the kind of properties they want, which we then turnaround and offer to them. We win through reliable and effortless disposition. They win because we’re doing the scrubbing work on their behalf.

Off to lunch! Need to keep adding to our list.

Chris PapSeptember 15, 2022