Last week I got an email from a beginning wholesaler asking me for advice. He told me he was considering doing deals virtually in another market because there were “no buyers” in his. He had recently put three properties under contract with the intent of wholesaling them to end buyers, but ended up backing out of all three contracts because he could not find buyers for any of them.
Unfortunately this is not the first time that I’ve heard of this problem, and while it might seem like a great idea to pack up shop and move your operation to another location in search of greener pastures, the truth is that the problem is most likely not because of a lack of buyers. In fact, I’d be willing to bet that if your wholesale deals are not selling it’s because of one of the following two reasons:
The price is too high
While this might seem obvious to some, it is a factor that is overlooked by many new wholesalers. While I’ll admit that I’ve seen some properties that I don’t think I could move even if I was giving them away, in most instances you can get rid of a property quickly by simply lowering the price. How far you will need to lower it will depend on what the active investors in your market are willing to pay, and this is something that should be learned before you start putting properties under contract.
If you find yourself in a situation where your deal is not selling, make sure to use it to your advantage by asking the investors who are passing on the deal why they are not interested. Find out how low the price would have to be to make the deal attractive to them and keep that in mind the next time around.
No one Knows About Your Deal
If your property is priced right and it’s not selling, chances are, you haven’t done a good job of getting the word out about it. Once you get a deal under contract, your job as a wholesaler is to market the living crap out of it! If you’re serious about getting it sold, you should be doing everything on the following list (at the minimum) to find an end buyer:
*Send the deal to your buyers list (if you have one)
*Put ads up on the online classified sites every day
*Place signs around the property
*Pass out flyers at any REIA meetings in your area
*Contact other wholesalers about the deal to see if they will help you market it
*Call every For Rent sign in the area and see if the landlords would be interested in your deal
If after doing all of the above you still haven’t found an end buyer, chances are that it’s priced too high!
If you’re having trouble selling deals in your own market, you might want to consider what I’ve written above before you jump ship and relocate. Keep in mind that there are investors buying property in every market, and you may just have to tweak your approach a little bit in order to get your deals sold!
Photo: Salvatore Vuono
Related posts:
- How To Make $70,000 Off A Real Estate Wholesale Deal
- Calculating Fixed Costs on a Rehab, Flip or Wholesale Real Estate Deal
- Selling Points: Setting a Home Apart
- REO Wholesale Deal: Step by Step
- The Cheapest and Easiest Way to Find Buyers for Your Wholesale Deals
Article Author: Stephani DavisStephani has written 47 articles for us.
Visit Stephani's Website: http://www.flipthiswholesaler.net/
Formerly a bartender, Steph Davis is now a full time wholesaler in Tampa, FL. If you'd like to get an idea of what it's really like out there in the trenches, head on over to her blog: FlipThisWholesaler.net!
Joshua Dorkin
{ 10 comments… read them below or add one }
Marketing is by far the most important thing that you can do to make sure that your listing gets out there. And don’t forget to take advantage of all of those free marketing tools that are out there (i.e. Facebook, Twitter, MySpace, Craigslist, etc…).
You’re absolutely right. If a wholesale deal is not selling it is usually a matter of price or marketing.
Steph, great article — couldn’t agree more! (sometimes a tough pill to swallow though haha)
Yup- if it’s a great deal, there are always buyers- it’s just a matter of getting the word out that your deal is available…
Thanks for the comments!
What are some ways that you recommend marketing a property. Besides the norm are there any niche ideas you might share?
Hi Jason,
Signs around the property work the best for me.
I’ve written a few other articles here that will give you some more options:
http://www.biggerpockets.com/renewsblog/2009/08/06/easy-ways-build-wholesale-buyers-list/
http://www.biggerpockets.com/renewsblog/2010/01/21/easy-ways-build-wholesale-buyers-list-part-2/
http://www.biggerpockets.com/renewsblog/2010/04/22/the-cheapest-and-easiest-way-to-find-buyers-for-your-wholesale-deals/
Hope that helps!
Steph
The term ‘wholesaler’ has spawned, IMHO, a new class of quasi-investor. The GreaterSucker approach is their credo. This doesn’t bode well for legit wholesalers, though on the positive side, these overpriced homes no doubt help the better deals sell.
Hi Jeff,
Yeah, there will always be those type of wholesalers out there, but it doesn’t really have much effect on my business. As long as my deals are good, there will always be plenty of buyers for them.
Thanks for the comment!
So Steph, in your honest opinion, aren’t there properties that are just too crappy for someone to buy?
Hi Luis,
It depends on the buyer and how big of a project they are willing to take down.
I know rehabbers who will only buy properties that need paint, carpet, and light cosmetics, and then I know others who don’t mind doing complete gut jobs as long as the numbers work.
Usually it’s just a matter of getting the property at a low enough price, but as I mention in part 2 of this article, there are some properties I’ve run across in the hood that I don’t think I could give away.
Take care,
Steph