WHY I HAPPILY SELL CRAPPY HOMES!
I’ve been a Realtor since 2006 and built my business on selling foreclosures and working with investors. Technically, I didn’t have a choice since that was pretty much the only type of properties selling during the real estate crash of 2008-2012.
As the market has improved, I definitely find myself spending more time with buyers and sellers who are in the higher price range and pay a higher commission at closing. But it’s important that I don’t cut ties with my clients who buy and sell crappy homes since this segment of my business is my favorite for three reasons.
1. Quantity vs Quality is a Sound Business Strategy
The commission on crappy homes is generally around $1000. Early on, investor clients would “apologize” for taking up my time at such a low commission, but I see no reason for these apologies. I generally make a minimum commission of $1000 or so per transaction and when they close 8-12 transactions per year, the commission really adds up.
In fact, the clients who have paid me the most money over the past 9 years have been my investor clients who annually put $10,000 in my pocket. Over 9 years, they are worth nearly $100,000 in total revenue. Most of my traditional clients won’t generate that type of income for me until they buy their 6th house or so (remember I live in Cincinnati, not Malibu).
2. No No Drama… No No No No Drama
As Fergie says from the Black Eyed Peas, we don’t want no drama! The best part of working with crappy homes is that there is NO drama. Here is how the typical conversation plays out:
What do you want to offer? $8,000. It’s a piece of crap but I know how to value property.
Do you want inspections? Of course not. I see what’s wrong with it and again, it’s already a piece of crap.
Will you be getting a loan? Of course not. You can’t get a loan on this piece of crap.
I consider myself a glorified paper pusher who writes an offer, negotiates it and sends it to the closing department to close the following week. It takes about 2-3 hours of my time and I make $1000. And now thanks to sites like Hubzu, my investors do their own bidding, execute offers and close with very little assistance from me making my job even easier while keeping the pay the same.
3. Bottom Feeding Investors are People Too
For every investor who I have helped buy and sell a crappy property, they have either used me for their much more expensive primary residence or recommended me to their friends and family. Since my investor clients are the go-to-real-estate-experts amongst their sphere, my name is constantly given out to traditional buyers and sellers looking for their next home.
Advice: There is a Big Difference between a Crappy House and a Crappy Lead
I don’t run all over town with them or pursue any sort of “wild goose chases” since investors can identify before even going inside a property whether a home has potential. Ask the right questions and you will be able to weed out the majority of bad clients in this space.
Selling crappy homes will soon become your “bread and butter”. They are consistent, easy and more profitable over time. Who wouldn’t want more of this in their real estate business?