So you want to wholesale real estate?
Of course wholesaling properties is a very detailed process. It is not for everyone!
You should have a mentor, and a team to help you get started.
What if it’s just you, and you don’t have a team…
All wholesalers conduct themselves with different protocol and processes, but I will tell you what I do.
I have been in the real estate business since 2002, in many capacities including as a Realtor, Loan Officer, now as a Wholesaler.
I won’t go into every detail needed here at once, but lets start with how to get started.
The first thing I did was determine where I’d like to work, of course this will be your target market, usually in your backyard, but many wholesalers sell properties that are out-of-state.
Fortunately Southern California is a hot market and no shortage of investors starving for opportunities.
One of the biggest debates between wholesalers is: what comes first? Properties or Investor/Buyers?
I don’t believe there is a right/wrong approach, either way, you need both to make a deal.
If you source a property, now you need to go find a buyer, some people line up a buyer, then go get a property…
I have always said If it’s a great deal, you will have a line around the building to buy it, if it’s not, you’ll hear crickets.
Since you will need to secure a property to make a deal, lets talk about that first. Sourcing properties is the most mysterious about this game, unfortunately most wholesalers won’t divulge their source for deals, I am no different, however I will point you in the right direction to develop your own lead generation system.
- Word of Mouth Tell your friends, family and coworkers that you are looking for a property for an investment.
- Drive your neighborhood This is something you can do after work..or on weekends. Keep a lookout for FSBO’s (For Sale By Owner) signs, abandoned properties (these will need some research, pre-lim report, or private investigator can help you)
- Rent to Own Properties These are properties available for sale, but are not listed, and you will be working directly with the owner.
- Find a Realtor This will be a team-member, your Realtor will be able to access the MLS (Multiple Listing Service) and can provide you specific listings that fit your criteria. Your Realtor can make offers on your behalf to land you some deals. I can make recommendations on Realtors in some markets.
- Bandit Signs You can make these with cardboard and a marker but they all basically say “We Buy Houses Cash” “Call Us” with a contact number. You can put these signs anywhere there is a high traffic area with lots of exposure.
- Internet Marketing You can be creative with this, there are plenty of groups, forums, etc. on Facebook, BiggerPockets, LinkedIn, etc. here you can network with professionals, and homeowners.
- Magazines/Publications You would be surprised that you will find opportunities in your local newspaper or community paper, or if you have a popular magazine like The Reader they have ads, also you could consider placing a small 2 liner to attract home-sellers.
- Direct Mailers You can consider sending letters to homeowners facing NOD (Notice of Default) this is the first notice from the bank announcing their plans to foreclose. You want to let them know who you are and what you would like to do.
- Subscription Sites Sites like Foreclosure Radar will give you detailed info about upcoming foreclosures and their status, loans, some contact info, and other useful info to use, then you get prepared and drive these addresses, you will be speaking to tenants, and homeowners who are likely not so happy that you are there, but if you likely let them know you are there to help them, you may then have the opportunity to build some rapport and access their total scenario.
I’m sure there are many more ways to source properties, but they are more advanced and you need to walk before you can run!
If you find a property and the owner agrees to sell it to you, that’s another lesson!
Please remember that while this is a very lucrative career, it is extremely volatile, and has a learning curve, can be time-consuming, has a degree of risk, but if you can withstand it, you will eventually enjoy the rewards.
Property wholesaling is the epitome of No Money Down Real Estate. No money out-of-pocket can actually produce 4 and 5 figure paydays.
Remember this is a business based on integrity, reputation and ability to perform.