One of the toughest parts of real estate wholesaling is finding properties to wholesale. Here are a few things that I have done that have helped get that phone ringing and generate some deals.
How to Purchase Real Estate With No (or Low) Money!
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5 Tried & True Ways to Land Deals as a Wholesaling Newbie
1. Driving for Dollars
Honestly, the cheapest way to find motivated sellers is by driving for dollars. You can simply jump in your car, drive around the city, and look for distressed properties.
As you’re driving, look for properties with tall grass, boarded up windows, peeling paint, etc. and then write down the addresses of those properties.
Once you have the address, head over to the tax assessor’s website, enter in the address, and find the owner of the property.
Once you have the owner’s name, you can search for their contact information using a skip-trace software called TLO.
Driving for dollars gives you a true feel for the neighborhoods and sense of the market that you sometimes can’t get when you are researching comps online. It will also allow you to have an idea of what other wholesalers/investors are active in different areas.
This strategy is free and literally costs you the gas in your car and your time!
2. Bandit Signs
Place bandit signs in high traffic areas and busy intersections. Keep your signs simple and straight to the point. You do not have to get fancy with your signs but do want them to be durable to withstand a little weather. Bandit signs do run the risk of being removed or destroyed. Our bandit signs simply say:
“We buy houses cash!”
We spend $.50 to $1.00 per sign, and we have our property manager place the signs out to make a percentage if a deal comes from a bandit sign. We place a certain phone number on our bandit signs so that we are able to track if deals are generated from the signs.
Do make sure that you check with city codes in regard to placement of signs since they will have your phone number on them and will be able to be tracked back to you.
At our local meetup just last month, one of the participants did share with the group that her best sign that generated the most deals for her was just a piece of cardboard with sharpie marker writing. She also shared that she used to spent hours making her signs look super professional but did not generate many deals at all from them.
3. Networking with “Mentors,” Investors, or Agents
Real estate is all about relationships!
You know, a lot of times it’s not what you know; it’s who you know.
Attending networking events allows you to connect with people in your market who are taking action and doing “the stuff.”
Just think about it: If you know the top fix and flippers, the top buy-and-hold investors, and the top wholesalers in your market, you are ultimately setting yourself up for success because many times, they’ll have inventory but not time, so they’ll sell deals for super cheap just to get them off their hands.
So, networking is essential and a great way to generate deals!
Every time you talk to people about who you are and what you are looking for, you are branding yourself. Active people make good investors in this market a lot of the time. We have learned that the more we network, the more people bring us deals (and the more deals tend to fall into our laps).
Networking is also a fantastic way to build your reputation and give a face to people that you want to deal with. Real estate investing clubs and other meet ups literally put you in a room with people that you can deal with on both sides—acquisitions and dispositions.
If you can’t make it to local meetings or events, be active on Facebook groups or LinkedIn pages. Just make yourself known to others by posting, sharing, commenting, and asking questions.
4. Direct Mail
There’s this concept called the 80/20 Rule, where 80% of your results come from 20% of your effort.
These are all great strategies, but for the sake of the 80/20 rule, direct mail is the way you want to go because direct mail marketing targets a list of potential motivated sellers by using specific information regarding age, zip code, income level, etc. Then you hire a company to send out letters or postcards to individuals on that list.
This is a very effective way to find motivated sellers, but it comes with a high cost.
Right now, we’re spending an upwards of $10,000 a month on direct mail campaigns as a company, but we’re averaging between 10 to 12 properties a month, so it justifies it.
Say you average $6,500 property. You can see why spending $10,000 a month makes sense for us—but it doesn’t happen overnight.
We drop $10,000 a month in direct mail campaigns and have two full-time acquisition managers dedicated to screening calls servicing the leads that come in. So, instead of us going after and chasing the motivated sellers, through our direct mail campaign, the motivated sellers come directly to us.
Related: The Newbie’s Guide to Wholesaling in 7 Simple Steps
Guys, I know these numbers might seem a bit daunting, but don’t let hearing this discourage you.
It will take some time to get to that level, but don’t be afraid to pick up a side hustle, because direct mail is your best bet for streamlining deal flow. Look at it as an investment. If you can spend even $1,000 for a mailer and get a $5,000 deal out it, would you consider it worth it? I think so.
5. Social Media
Post self-made ads on social media and tell your friends to share them and like them. Even spend some money to boost your posts.
Posts and ads that are on social media spread exponentially. Take advantage of that!
Just like you may put up a bandit sign, make one for social media outlets.
There are a ton of free and easy-to-use sites out there to make marketing materials and social media flyers.
Above All, Be Active
Just like many things in life, when you are generating deals, you are going to get out of it what you put in. Don’t stand on the sidelines and wait for things to happen. Go out and get it! Set your goals, have a plan, and go tackle it.
Comment if you have any other sources that may be great for newbies to try when it comes to getting started on finding deals to wholesale.
Let’s talk below!