Foreclosure moratoriums are being lifted across the country. As a result, there will be new opportunities for investors to acquire distressed, damaged, or outdated properties. As a result, 2021 is the perfect time for wholesalers to make the most of them.
So, how does wholesaling real estate work? Well, first you find a good deal on a property. Then you submit an offer to buy the property. Once your offer has been accepted, you need to sign a contract to purchase the property and put down a deposit (usually 10% of the purchase price). Once you are under contract and have put your deposit in escrow, you need to find a real estate investor who wants to purchase the property. You will then assign your purchase agreement to the investor and will charge the investor a “wholesaling fee” at the time of closing.
If you’re asking yourself “do you need a real estate license to wholesale?” The answer is no. Wholesaling real estate is a reduced-risk option for those looking to get started in real estate.
While the strategy is fairly risk-free, often the most complex part of real estate wholesaling is actually finding the properties themselves. So, if you’ve ever found yourself Googling “how to find wholesale properties?” Look no further, we’ve got you covered. Check out our five tips for finding wholesale properties below:
1. Driving For Dollars
This is an age-old tactic used by experienced real estate wholesalers. It involves driving around a particular area and taking note of distressed properties that look like their owners would sell at a discount.
The one tip we’d recommend when driving for dollars is to coherently log the addresses of the properties you’ve visited so that you don’t lose track of which ones you’re planning to pursue.
Software like Propstream has a mobile driving for dollars app to help you set out your findings clearly. Alternatively, you can keep track of all your data in a spreadsheet.
2. Pull Lists
Another way to find properties to wholesale is to search real estate websites for on-market and off-market property listings to find ones that fit your wholesale criteria. For instance, you could filter by homes that are over a certain number of years old.
However, we’re not talking about checking these sites just once a week. Unlike driving for dollars, you won’t be building your own original list by scanning real estate websites. Therefore, in order to stay ahead of other wholesalers, be sure to check them every single day.
Here’s a list of real estate marketplaces to start your search:
3. Cold Calling
If pulling data off real estate websites isn’t your thing, you can also try cold calling real estate agents or speaking to an experienced private money lender who’s familiar with the market you’re looking to get into.
Once you’ve made your list of wholesale properties, you’ll also need to set about cold calling homeowners to find out whether they’re actually willing to sell.
4. Send Postcards in the Mail
If you’d prefer to avoid over-the-phone sales, there’s always direct mail marketing. You’ll want to buy eye-catching postcards or flyers to advertise your interest in buying properties. Then you’ll want to mail those postcards to prospective sellers.
Having said that, this strategy could prove tricky to manage if you’re planning to target hundreds or even thousands of properties. It’s difficult to keep track of responses, and when it comes to direct mail marketing, you’re unlikely to receive responses straight away.
5. Market Yourself
Sometimes it’s best for you to sit back, relax, and wait for Sellers to come to you. In order for sellers to be able to approach you, they’ll need to know who you are and how to contact you.
As a real estate wholesaler, there are several ways you can advertise yourself. One of the most straightforward — but potentially more costly — ways to do so is to run ads on social media explaining what you’re looking for.
If you’re looking for a cheaper option, you can always try putting up signs around the neighborhoods you want to buy real estate in. However, it’s a good idea to check the local regulations before doing this.
Lastly, you can always put up ads on Craigslist stating that you are looking for properties to buy.
Regardless of how you track down properties to buy, remember to keep track of your progress in a database such as a spreadsheet or CRM.
This is especially true if you’re planning to target hundreds or possibly thousands of property owners at once — because after all, success in wholesaling really does just come down to the numbers.
Contact us today if you’re ready to secure funding for your next real estate investment project.