I got a great question via email this morning. And in the spirit of my new reader mail campaign (see the sidebar survey), I’d like to share my response for everyone’s benefit. I welcome your comments.
From: Mike C.
Sent: Friday, April 23, 9:12 AM
To: ** REI Tips **
Subject: Re: Question?
I haven’t heard back from him yet, but when I do, I’ll keep you updated.
In the mean time, maybe you can answer this question. I hate to be filling your email with my questions, but I just need to know how I can protect my relationship with my seller? How do I prevent my end buyers from going behind my back on future deals and cutting me out? This potential seller buys property straight from a bulk REO source, so I could be getting property on a consistent basis from this seller. If you can help me, I would appreciate it.
Hi, Mike. Great question, and one a lot of us contend with at some point. And since I’m answering this one publicly, I’d like to emphasize that your question is not how to protect your interests on a specific deal you currently have under contract. That’s what an “Affidavit of Equitable Interest” can do, should you feel you need it. And you’ll find one in my bundle of 53 free REI forms.
Your question is more about how to prevent your regular buyers and sellers from working around you in the future if they want to. And honestly I’d love to share the secret formula with you here. But the truth is, there’s really no way I know of to do this.
After wholesaling somewhere close to 200 at this point, I have yet to hear of any way we as wholesalers can lock our buyers and sellers into an exclusive ongoing relationship with us. (And really, if you step outside the wholesaler’s mind and put yourself in their shoes for a second, I’m sure you can appreciate that.)
But regardless of this, many of the most successful wholesalers out there do business over and over and over again with the same buyers and sellers. So what’s their secret?
Simply put, it’s being desirable. And in some cases, being indispensable.
How can you do this?
Here’s How to Make Them Want Need You…
1) Establish and cultivate a superb level of rapport.
Be above reproach and have the level of character, integrity and trustworthiness that cause your buyers and sellers to prefer doing business with you whenever they can. Be the kind of person you would want to work with. No, actually be better.
2) Be a rainmaker.
I can tell you, a lot of folks have wanted to do business with me simply for the fact that I established myself as an active and obvious leader in the area. I started and ran our local REIA group for 6 years. Running meetings, teaching workshops, going to investor lunches and standing up during “buy and sell” time with active deals can do a lot to make people want to connect with you.
I’m not suggesting you posture yourself as something you’re not. I”m saying become the kind of person others notice and are drawn to. Look for opportunities to become more of a center of influence and display your activity in the marketplace…and a lot of times you’ll find people want to do deals with you because it makes them feel good to work with a rainmaker. I know this might seem a strange concept at first, but it’s true.
3) Add authentic and unique value whenever possible.
Here’s a fact: Always being of authentic value to people should be a core value of yours anyway. If it’s not yet, then make it so.
So in perspective of the issue at hand, ask yourself how you can actually make it worthwhile for your regular buyers and sellers to go through you on an ongoing basis? How can you make them need you? Find out how it can actually benefit them to continue working with you…then make sure they’re aware of it.
- Can you save them time or effort by covering legwork they would have to ordinarily do?
- Can you somehow expedite some part of the deal? The research? The closing?
- Dont’ be shy about just asking them: “What can I do for you that would make your life easier, so we can do as many deals together as possible?” Then figure out how you can do that.
The bottom line is there’s no guarantees you won’t get cut out at some point. It’s happened to me and it’ll probably happen to any active wholesaler. And the reality is, it’s not like you’re being shafted if it happens (Unless you’re actually getting cut out of a deal you actively presented…and that’s a whole different ball of wax…) Most of the time, it’s a factor of you not bringing enough value to offset the cost of having you in the middle.
So how to most successful wholesalers protect their ongoing buyer/seller relationships?
By giving their buyers and sellers sufficient motivation to keep the relationship going. By being of authentic value on an ongoing basis. And by being the kind of person others want and/or need to do business with regularly.
So that’s what I got – hope it helps. Anyone else have any thoughts to add to this? I welcome your comments below…