Hey all! Hope you’re having an amazing week.
Today, I’ve got an exciting topic for you and I can’t wait to show this feature off!
Max offers are something that can be incredibly powerful in your mailings – and today, I’ll show you how to set them up – plus, a few bonus tips.
So let’s get started!
How do max offers work?
Before we dive into the setup, it’s important to explain exactly what max offers are.
In essence, max offers allow you to deliver targeted offer amounts to your properties. These offers can be set one at a time, or made automatically based on data Prop360 gives you access to.
So, as a wholesaler, if you know your algorithm generally ranges around, say, 60% of ARV, you could send postcards offering up to 60% of ARV on your deals.
That way, when you add a property that we estimate to have an ARV of $200K, your mailers will reference an offer of $200K * 60%, or $120K.
This can lead to some seriously increased call volumes and deal flow – because you’re actually offering something concrete to your potential lead. You’re not just another “I Buy Houses” mailer, but are offering a customized, tailored experience to your seller.
With proper configuration, this can allow you to compete with stronger-presence iBuyer companies (such as Zillow Home Offers, or a larger iBuyer franchise).
Sound cool? Let’s get started with the setup!
Setting Up Max Offers in Prop360
At its most basic setup, max offers can be a manual, targeted setup.
With this setup, you’ll have the most customizability in terms of your mail, which is great to stand out.
To set up a max offer, simply add a property. Once it’s in your Prop360 CRM, you can head over to the REHAB tab.
Here, you’ll be presented with 3 values: ARV, Rehab Cost, and % of Value.
Max Offer Formula
The formula Prop360 uses here is similar to that of any max offer calculation common in wholesaling or buying property: (ARV * % of value) – Rehab Cost.
As you can see, the ARV field is often pre-populated with data. This is the value we estimate the property to be once repaired.
Rehab cost will also be set to a default value, which you can configure on your Profile page.
You can drill down into rehab even more and add certain categories of rehab costs, expenses, and much more – and your values will save for future properties. More on that in a future blog post!
Changing any of these values will modify your max offer amount.
Once the amount looks good to you, tap Save Offer.
We’re now ready to mail.
Setting Up Offer-Based Mail
Now that we’ve got a max offer stored for our property, we can put it on a mailing sequence that leverages this offer.
Quick note: If you put a property on a offer-referencing sequence, but it doesn’t have an offer – we’ll send a default street view postcard instead. This will ensure you’re never sending any incorrect mail.
Pick any sequence you’d like – either a default mailing sequence or a sequence you configure. Any postcard that leverages an offer amount will now display this property’s custom offer.
Setting Up Automated Max Offers
Now that we’ve covered the basics, it’s time to take our max offers to the next level.
This is where you can really stand out.
We’re going to create a custom offer algorithm, so that any new properties we add will instantly have saved, targeted offers.
To do so, we’ll head over to the Profile page in the web app.
Head down to the Default MAO Value section.
From here, we’re presented with an infinitely-configurable algorithm. We can setup individual steps for calculating our max offer, as soon as a property as added.
In this example, I’ll keep it simple for reference, but you can configure this as much as you’d like.
Additionally, if you reference any variables in the algorithm that the property doesn’t have data for, the MAO won’t be set. This way, you won’t be sending any incorrect offers.
For this example, I’ll set up a max offer of 70% of ARV minus an estimated 20% of ARV for rehab, and then I’ll also take out a flat value of $10,000 for an assignment fee.
To set that up, we’ll just add a couple of variables like so:
Now, I’ll just click Save Algorithm. We’re all set!
Once any property is added from now on, it’ll have its max offer calculated as (ARV*.7)-(ARV*.2)-(10000), and any mail that’s sent in a sequence will reference that offer.
Of course, you can always manually modify your offers on individual properties, and also change your algorithm at any time. There’s an infinite amount of configuration.
Prop360 currently supports the following variables (with +, -, * operators): Property ARV, Custom Values, Rehab Cost, Estimated Equity, and Estimated Loan Amount.
And of course, if there’s any variables you’d like to see in this algorithm, let us know!
As you can see, Max Offers are an incredibly powerful feature in Prop360, and they can seriously impact your lead volume if used right.
So get out there and set some offers! And of course, let us know how it goes!