3 Keys To Succeed With Novations, Balance, The Art of Lead Qualification

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Welcome To The Business Of Wholesaling Newsletter!

Every week, we’ll be sending you strategies, tactics, and tools used by successful wholesalers and we’ll cover any important market insights and news in the industry.

Here’s what we got for you today:

• 3 Keys To Succeed With Novations

• Balance

• The Art of Lead Qualification

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3 Keys To Succeed With Novations

Rich Wonder stopped by the Business of Wholesaling podcast for part two. And he dropped some serious knowledge on how to succeed with novations.

Here are the 3 most important things you need to do if you want to collect massive profits from novation deals. (You might be surprised at #3)

1. Lock up a good price

This is obvious. But it needs to be said again and again because investors who are going through slumps tend to lock up deals for the sake of locking up deals instead of doing business.

How do you know if you have a good deal?

For novations, throw ARV calculations out the window. They don’t apply. Instead, use Rich’s formula. 

Max Allowable Offer (in current condition) - 10% - $30,000

The 10% is for miscellaneous costs like realtor fees, closing costs, and concessions. 

The $30,000 is Rich’s padding and minimum profit on each deal. You may not always end up making $30,000, but that margin gives you room to not break the bank in worst case scenarios. 

2. Set the right expectations

Ideal sellers for novation deals expect two things:

1. The benefits of a cash offer

2. Retail price for their property

So it’s your job to set expectations and make it clear. Any confusion will cause you to lose the deal. And you also need to set clear expectations with the realtor.

Which brings us to #3

3. Finding the best realtor

Do not settle for any realtor you can find. You have to find the best one who will work.

Rich likes to call multiple realtors and create a job interview dynamic. As we know, there are a lot of realtors who talk a big game but can’t do the walk. 

This is important because the realtor will handle 80% of the transaction. They will be doing the due diligence, pricing the property correctly, and they need to stay in communication with you. 

To weed out realtors who aren’t a good fit, Rich likes to give them a little task. This positions you as the person of value because realtors don’t treat all their clients equally. 

So Rich usually asks them to give him a preliminary price on a property based on his notes. An easy task but you’ll see who shows up or not.

If you plan on doing any novation deals, keep these 3 things in mind. You can also check out our podcast episode with Rich Wonder below.

Balance

A certain business influencer has caused some controversy this past week.

Although, I’m sure Hormozi is doing this on purpose to get attention and make more money. It’s interesting to see the arguments on both sides.

Some people love Hormozi’s philosophy. All about the grind.

There’s nothing wrong with that. If that’s what fulfills you and makes you happy, then go for it.

Other people love balance. If you’re an entrepreneur, there’s never really an equal balance.

So balance is subjective. But there are people who value their personal time and time spent with family and friends. 

I also lean to that side. I believe at the end of our lives, we only have our experiences to remember. And I’d like to have more memorable experiences than just me burning the candle.

But working 12 hour days or 80 hour weeks is necessary sometimes. This is business. We gotta do what needs to be done.

This is just the ebb and flow of life. 

The point is that there is no “right” path. You do what’s right for you.

I really don’t understand why everyone is getting so defensive on both sides. 

What does someone else’s philosophy on how to live life and work have to do with you?

Absolutely nothing. 

Keep doing you. Think for yourself and take care of yourself.

The Art of Lead Qualification

Let's take a moment to consider the delicate dance of the cold call.

As wholesalers, we're not just making calls, we're searching for golden opportunities hidden within each conversation.

But how do we separate the truly motivated sellers from those who are merely testing the waters?

First, let's explore the power of timing.

When a potential seller mentions recent life events such as a job relocation, a pending divorce, or inherited property they're often sharing more than just facts. They're revealing their motivation. These transitions often create the perfect storm for a motivated sale.

Listen carefully for these subtle cues, as they're frequently wrapped in casual conversation.

When you ask about their timeline for selling, pay attention not just to their words, but to the spaces between them.

A serious seller rarely needs to "think about it" they've already done their thinking. They'll often have specific dates in mind, and their responses come quickly, decisively.

Consider the financial conversation.

A truly motivated seller will be surprisingly open about their situation. When you gently inquire about their desired price, listen for flexibility rather than firm numbers. Are they more focused on their next chapter than on squeezing out every last dollar? That's a telling sign.

Serious sellers ask different questions.

Instead of fixating on "How much can you offer?" they're more likely to ask about your process, timeline, and next steps. They're already mentally moving forward.

The property's condition can tell you volumes about motivation.

When a seller freely discusses problems with the house or even offers information about needed repairs, you're likely speaking with someone who's emotionally ready to sell. They've accepted the reality of their situation and are past the stage of denial that often holds back less motivated sellers.

Remember, finding motivated sellers isn't just about asking the right questions, it's also about creating a space where sellers feel comfortable sharing their true situation. Sometimes, the most valuable information comes from simply allowing people to tell their story.

Every word, every hesitation, every eager response is a piece of the puzzle.

After all, in the world of wholesaling, our greatest tool isn't our contact list or our funding, it's our ability to recognize opportunity when it calls. Or in this case, when we call it.

Thanks for reading this week’s issue of the Business of Wholesaling. 

We’ll be back next week with more marketing & sales strategies, market insights, and other advice you can use to grow your wholesaling business. 

See you next week.

Team Business of Wholesaling