Ive been browsing around past week or so and had a few questions about wholesaling. I understand the concept of building a buyers list and placing a house under contract, to in turn, sell to those on my buyers list. But how do you find a property to put under contract? Do most people hunt for foreclosed houses ( because I read that most wholesalers tend to sell to those looking to flip)? What kind of sites or resources do you refer to when you are hunting for good wholesale properties? Once I find a place I am interested in do I go walk up to the seller and say "Hey I am a wholesaler, sign my contract, let's make a deal?", etc.
I guess what I am really searching for is what most of the articles around here tend to skim over. Articles (at least the ones I read) say get a house under contract to sell, but don't necessarily say how to do this. If anyone could provide anymore detail or information, I would appreciate it very much.
I am obviously new to this and trying to learn more about it. Of course I am not expecting to go and try my first deal tomorrow, very much still in the learning phase.
Hi @Account Closed I'm a relative newbie as well, but I wanted to chime in since I struggled with the same questions for a long time. I've done a lot of research and reading over the last few months and its finally coming together for me, so I wanted to share with you what I learned.
From what I can understand, the real key to wholesaling a property is finding a true deal - one that no one else knows about yet and one you can get under contract quickly before anyone else does. This may be an REO or forclosure but many experienced wholesalers on this forum are saying these are becoming less and less available. Bandit signs seems to work for many, craigslist ads, working probate, approaching landlords who have just evicted their tenants (they are sick of owning the property) - there are many ways - do more research and you will come across certain methods mentioned over and over that work for many successful wholesales. Learn from the best, don't try to reinvent the wheel. All the answers are on here, or just google wholesaling and you can read a million articles on what others have done successfully.
As for contacting the sellers, it seems a yellow letter campaign might be a good start for you. Just google this or read all the posts on here about them. Its easy and cheap. And effective from what I've read.
Keep in mind that not all investors you want to sell to necessarily want to flip, they may want to rehab/buy and hold, in which case you need to know the numbers inside out and backwards for all possible scenarios. Get to know all the formulas mentioned on the forum for calculating the returns for an investor. Only then will you know if you have a good deal that you will be able to sell easily.
Hope this helps. I know it seems like a lot of work but the return is worth it. Not that I know, I still have to apply everything I'm learning into action! Good luck!
Thanks for the reply. Funny story, I actually stayed up until 4am googling, reading and watching videos last night (and now I am sitting at work as tired as can be) and you just solidify what I THOUGHT I earned last night!
My next step is to research the forums for calculating returns for investors. I Never thought about taking on the investors POV during the wholesale process.
After that I plan on hunting for some houses just to see if I can find them. I saw a thread on the forums "New Investor Challenge of the Week" I think I will take them up on that as soon as I learn the formulas concept and build my confidence a bit; however, I live in Orange County, CA and heard the market here is really tight. I was wondering if it would be wise/possible to wholesale outside of where you live. I am originally from Ventura County area and would like to start out over there. I still frequent the county often. Essentially what I am asking, Is it wise to wholesale from a distance? Any advantages to disadvantages? Or is this irrelevant?
@Account Closed Doing a "driving for dollars" campaign may be the most cost effective way to generate leads. Pick a neighborhood and drive every street writing down the addresses of any houses that look distressed/vacant/etc. Mail a simple letter to the record owner stating that you want to buy the house.
@Account Closed What a coincidence - my brother's family lives in Hermosa Beach and my parents live in Ventura! I visit the area a couple times a year, so at least I'm familiar with it. Unfortunately I don't think my opinion counts for much as I'm new like you, and have never even done a deal yet. I've heard that it is a real challenge finding a deal in southern CA right now, and since Ventura is a bit further out of the city you may have some luck. I think there are a few investors on here from the Thousand Oaks area, you may want to connect with them and see what they think.
I have heard the term Virtual Wholesaling, which you may want to ask about by setting up a separate thread in the forum. That might be an option for Ventura. There is also the idea of co-wholesaling where you may be able to find a deal and then connect with another wholesaler in the area who has a buyer, and split the money earned.
I know you are in a tight market right now but I am jealous of how large your area to work is. I'm sure with demand increasing and some dedicated hunting for deals, you can make it work.
Absentee owners are not, by themselves, necessarily motivated. If you follow the formula that everyone one else does here on BP, you will end up like most people who experiment with real estate do: disappointed.
When I started (1978) I began by trying to get properties at a bargain purchase price by getting lists of people in foreclosure who had equity. I learned the legal rules and how to document deals. I learned how to talk to owners and explain things to them. That meant I had to study and be ahead of their learning curve. Data was available two ways: either subscribe to legal paper and read the foreclosures or subscribe to services that mailed you hard copy reports several times per week. I guess you could also go to the recorders office and look at rolls of microfiche film, too.
You have it so easy today. You can subscribe to an online service like property radar/foreclosure radar and get statewide access to search every county for less than I paid for one county subscriptions 35 years ago.
If you wanted to learn to fly jet airliners, you'd never ask a pilot/captain to give you free flying lessons. You'd devise a way to take ground school and get the funds to rent a trainer airplane and an instructor. Same with real estate investment. You have a lot to learn.
A career isn't built from sending out a few hundred yellow letters or postcards. Learn how to knock on doors and actually talk to people. After you've become effective, learn to "give good phone" then an effective closer. It is only then that you are most likely to know how to target prospects, write good copy and close deals that make sense.
I'm betting at least 90% of the people who post here and on other forums do NOT make their living as real estate investors. Out of those who do, most are not really thriving or are too new to have a history, let along staying power. My point is that there will be plenty of people with comments and opinions, however you will need to decide which ones really offer your credible advice or guidance.
Plan your work, work your plan but don't plan the results.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing