Q&A part 1

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Q1: Why should I focus on rural or small-town markets for novations?

You should focus on these markets because they represent a massive, untapped opportunity where competition is virtually non-existent. While most wholesalers fight over the same deals in saturated cities, rural markets offer a "blue ocean" of motivated sellers.

Here’s the breakdown of why this strategy is so effective:

Breakdown

Breakdown

Name

Notes

Seller Motivation is High:

Open

The Buyer Pool is Deceptive:

Open

The Perfect Fit:

Open

Speed to Close:

Open

There are no rows in this table

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Key Quote: "The thing with the little town leads that will break your heart [if you try to wholesale them] is they're really easy to get under contract... but you can't find a cash buyer. But guess what? There's a lot of people there that work, that have good credit, that get FHA loans... you can sell these properties to."

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Q2: What is the exact step-by-step process for a novation?

This is the tactical execution framework. Follow it precisely to minimize risk and maximize efficiency.

1.Acquire the Contract: Secure the property under a purchase agreement. This is the legal foundation of your entire deal.

2.Interview Realtors & Conduct Due Diligence: This is a combined, non-negotiable step. Interview multiple agents and use their expertise as part of your due diligence. Get them inside the property to give you a professional, realistic opinion on its value and condition. You must be confident the deal will sell before you ever list it.

3.Hire the Best Agent: Select the most competent and trustworthy realtor from your interviews. This person is now a key partner. Do not cheap out or rush this step.

4.Leverage Your Agent: A great agent handles the heavy lifting: listing the property on the MLS, managing all showings, handling communication with buyers' agents, and guiding you through negotiations.

5.Close the Deal: Once you accept an offer from a qualified retail buyer, your agent and the title company will manage the process to the closing table.

There are no rows in this table

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Q3: Do I really need my own money to do novations?

Yes, you need access to capital. While you may not spend money on every deal, it's irresponsible and unethical to engage in novations without a financial backstop.

Here's why:

Problems Require Cash: Deals are messy. A seller might need $3,000 for moving costs to make the deal work. A buyer's lender might require a $1,500 repair before funding the loan. Without the ability to solve these small financial problems, your deal will collapse.

Have a Contingency Plan: You need a cash reserve (Richard suggests a cap of $5,000-$10,000 per deal) or a partner who can provide funds if needed.

The Bottom Line: If you don't have access to money, you are a liability. When a small, solvable problem arises that requires cash, you will fail, the deal will die, and you will have wasted everyone's time and hurt the seller.

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Q4: Will sellers get angry when they see how much profit I make?

They will only get angry if you give them a bad experience. Your profit becomes a problem only when the seller feels they were taken advantage of or that the process was a nightmare.

Here is how you prevent that and ensure a smooth, profitable transaction:

Provide a "White-Glove" Experience: Your job is to be a problem solver and stress reducer. Treat the sellers with respect, communicate with them constantly, and manage the process with absolute professionalism.

Integrity is Your Brand: The real estate world has enough "scumbags." When you operate with integrity and genuinely help the seller navigate their situation, they will not begrudge your profit. They will be grateful for the solution you provided.

Long-Term Reputation Over Short-Term Greed: When you create a true win-win scenario, sellers often become your biggest advocates. They are happy you succeeded because you helped them succeed. Shady tactics might make you money once, but they will destroy your reputation and ability to do business in the long run.

Key Quote: "I didn't understand there was a better way to still make a win-win and actually come out way more ahead. Because the scammers don't last."

If you’re looking for novations, Prexium is where you’ll find the right leads to close more deals. 👉 Start today

The Cowboy Marketer⁠

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