I see the question asked often on the BiggerPockets Forum.
“Do I build a buyers list, or start marketing for properties first?”
The short answer is BOTH. No reason you can’t market for sellers via your chosen marketing strategy and also be marketing for buyers on craigslist and at networking events. But the giant buyer’s list won’t do you any good if the people on that list don’t look at you as a trusted resource.
One of the biggest hurdles in convincing my wife that starting a real estate investment company was her perception of real estate investors as being one step below the used car salesman. Wholesalers tend to be typecast by other investors in the same way. Unprofessional wholesalers get a property under contract, inflate the ARV with bogus comps, talk up the bad part of town as “transitioning”, and generally have no understanding of what it really costs to renovate a property. These wholesalers still make money but these tactics only work once per customer.
I preach a business mindset in everything that you do as an investor. I don’t even like calling myself an investor. I own a business that buys distressed real estate. So with the business owner mindset – how do you differentiate yourself from the unprofessional wholesalers?
How to Build Relationships as a Wholesaler
Instead of getting ANY property under contract and marking it up and presenting it in a way that SOMEONE will come along hopefully buy the property, be picky. If you can’t get it under contract at a price that will benefit you AND your end buyer, just move along to the next. Throw that unprofessional wholesaler a bone, his bad deal will strengthen your brand. Build a brand around your homes and ensure that brand is only associated with realistic returns, accurate representations and excellent customer service.
This is how you start long term relationships. This is how you attract the big fish.
The Path to Long Term Success
So now instead of being just another new wholesaler, you become a trusted resource, your properties are in high demand and your buyers are calling you for advice. It’s a good feeling when you have local buyers buying and closing on your properties without even going to look at them. It never happens on the first one, but it does happen on the third.
So don’t worry about having a massive buye’rs list. If it’s a good deal, venues like Craigslist, the MLS, Zillow ect will do just fine. Instead, work hard to ensure the property you have under contract is in fact a good property, and if your contractor quote comes back higher than you estimated don’t inflate the ARV, just take a smaller fee, learn your lesson and buy lower next time.
Thoughts? Leave your feedback below!