Fort Worth, TX · Member since 2013 · 11 posts · 0 votes
I have been using the wholesale strategy for about 5 months now but i cannot seem to find any deal i had two contracts but both fell through and now all I have to invest is about 50 bucks please tell me some free too low cost marketing methods to find motivated sellers thanks!
Investor · Richmond, VA · Member since 2013 · 195 posts · 27 votes
12y
I agree with those who are mentioning why the first deals didn't close. That should be the FIRST thing to focus on. Even if you found a deal with a marketing budget of $50 and got it under contract, whats to stop it from falling thru again?
Back to your main question though concerning deals- constancy is key. Craigslist is great but there are also several public information sources which I've heard that you can use to look up motivated sellers for marketing. I guess they are pulled from county records. Driving for dollars mentioned earlier isn't free but its another good method (Maybe ride your bike?). A large portion of people I speak with have inhereted their property from a loved one so target them if possible. I've heard of people looking in the obituaries but I don't really know how I feel about that 1 yet. Whatever you choose, make sure you learn everything about it and become a specialist if you can. Most people prefer direct mailers and become yellow letter specialists by researching the law of averages, templates, yellow letter vs regular letter, and even stuff like mailing on or near a full moon (I have no idea). I personally have never used a mailer and just do online marketing with my website because SEO is my specialty (and its free besides purchase of domain/hosting).
Also last word is don't get discouraged if this is really what you want to do. In my first 7 months, I didn't close ANY deals (had 1 under contract but it fell thru because of a rookie mistake). It took me a while but now I'm closing 1 a month consistantly (nothing compared to those on here who are closing 5-10 a month) but I'm still building momentum. Never stop learning.
Wholesaler · Mishawaka, IN · Member since 2013 · 438 posts · 346 votes
12y
@Account Closed Craigslist is usually a good free tool. Maybe your ads aren't worded correctly or aren't catching people's attention. You can also use bandit signs. They aren't free, but they are worth every penny. They're usually around $1 each. Get blank yellow coroplast signs with the H-stakes and hand write the signs or pay someone to write them for you. You get better results with hand written signs versus printed signs, plus they're cheaper. Put them up at busy intersections and watch your phone blow up with phone calls from cash buyers. Write the following on your signs if you buy some:
3/2 1,200SF
$0.40 on the dollar (or 40 cents on the dollar)
Must Sell NOW!
(XXX)XXX-XXXX (your phone number)
OR
Investor Special!
3/2 1,200 SF
$0.40 on the dollar (or 40 cents on the dollar)
(XXX)XXX-XXXX
I like the 2nd option better, because with the 1st one, you will get a lot of people looking for a home for themselves, which you aren't really looking for when you're wholesaling.
Check with your city or county offices to make sure that bandit signs are legal in your area. Otherwise, you might get fined if they are illegal.
If you're looking for motivated sellers, write this:
WE BUY HOUSES
Any Area - Any Condition
(XXX)XXX-XXXX (your phone number)
Usually you can use Trulia's heat maps to see where all the buying is going on in your area by going to: http://www.trulia.com/home_prices/. Right now it's down for some reason. That will tell you where people are buying, which should be where investors want to buy too. You can also get a cash buyer's list(not free) and mail a postcard or letter to them. Once they call you(which only a very small percentage will) find out exactly what they are looking for, and start looking to wholesale properties in those areas. By the way, if you mail letters to 250 potential cash buyers, and you only get 5-10 serious cash buyers. you will make a ton of money if you are doing everything right. You usually only need 5-10 cash buyers to work with to earn a full-time income.
Wholesaler · Fort Worth, TX · Member since 2011 · 163 posts · 45 votes
12y
@Account Closed Why did your first two contracts fall through?
$50 is not likely to get you a deal. Also, 5 months is not very long to be marketing...a minimum of 6 months consistency is the general consensus. I recommend you find a way to beef up your marketing budget.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
12y
Originally posted by @Account Closed:
how do i find where cash buyers are purchasing homes
The county recorders office in your area (as well as a title company) can pull all cash closing records for you in your area. Most of those will be investors. If they paid cash once, reasonable to assume they can and will again.
Investor · Baltimore, MD · Member since 2012 · 1k+ posts · 655 votes
12y
I think a better question here would be "Why can't/didn't I close my wholesale deals?". You already had 2 contracts that fell thru.....why did they fall thru?? what did you learn from them??
From what I read 2 contracts in 5 months isn't terrible for someone just starting so that doesn't seem to be the issue. You should look back at those failed ones and question where you went wrong. Were they even worth putting under contract to begin with?? Did you market it to the buyers properly?? Did you have it priced right to flip to the purchaser?? Just some other things to think about.
Investor · Richmond, VA · Member since 2013 · 195 posts · 27 votes
12y
I agree with those who are mentioning why the first deals didn't close. That should be the FIRST thing to focus on. Even if you found a deal with a marketing budget of $50 and got it under contract, whats to stop it from falling thru again?
Back to your main question though concerning deals- constancy is key. Craigslist is great but there are also several public information sources which I've heard that you can use to look up motivated sellers for marketing. I guess they are pulled from county records. Driving for dollars mentioned earlier isn't free but its another good method (Maybe ride your bike?). A large portion of people I speak with have inhereted their property from a loved one so target them if possible. I've heard of people looking in the obituaries but I don't really know how I feel about that 1 yet. Whatever you choose, make sure you learn everything about it and become a specialist if you can. Most people prefer direct mailers and become yellow letter specialists by researching the law of averages, templates, yellow letter vs regular letter, and even stuff like mailing on or near a full moon (I have no idea). I personally have never used a mailer and just do online marketing with my website because SEO is my specialty (and its free besides purchase of domain/hosting).
Also last word is don't get discouraged if this is really what you want to do. In my first 7 months, I didn't close ANY deals (had 1 under contract but it fell thru because of a rookie mistake). It took me a while but now I'm closing 1 a month consistantly (nothing compared to those on here who are closing 5-10 a month) but I'm still building momentum. Never stop learning.
Fort Worth, TX · Member since 2013 · 11 posts · 0 votes
12y
the deals fell through mainly because of repairs i think i will try driving for dollars and county records for leads but how to get the seller to accept the offer is the hardest part
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
12y
Originally posted by @Account Closed:
the deals fell through mainly because of repairs i think i will try driving for dollars and county records for leads but how to get the seller to accept the offer is the hardest part
Who were your buyers? With a rehab flip buyer, the more the repairs, typically the better the discount and we rehabbers love that. Can you provide more details?
Real Estate Investor · Plano, TX · Member since 2009 · 22 posts · 1 vote
12y
You can use craigslist and filter your searches by craigslist ads listed with keywords such as " wholesale deal, investor specials, handyman special, rehab, etc. Pay attention to the zip codes and areas of town being posted. Also pick up the phone and call those investors - you will be shock by how much insight others are willing to share. The best insight comes when the right questions are asked among those who are already actively involved in your market.
Fort Worth, TX · Member since 2013 · 11 posts · 0 votes
12y
@Will Barnard it was a rehab flipper he was located out of state he sent a contractor over to check out the repairs but the foundation work was 10,000 dollars over my estimate basically the same with the first deal also
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
@Account Closed I think you're learning about the reality of wholesaling. It seems so easy. Find a seller, find a buyer, put them together, collect a fee. Your story is familiar and is just more evidence that wholesaling is, in reality, very, very difficult. You have to spend a lot of time and no small amount of money doing marketing to find those sellers. In sales there is a concept called "the funnel". People outside the wide end of the funnel and folks who don't even know you exist. Once you make someone aware of your existence and what you offer (buying a house from a seller, in this case) you've moved them just inside the wide end. As you continue to work those prospects you move them deeper and deeper into the funnel. When you actually close a deal that person pops out the narrow end of that funnel.
In order to get one deal to pop out the narrow end you will, literally, need to have thousands of prospects on the wide end. It takes serious effort and a non trivial amount of cash to keep that funnel full.
Wholesaling also involves a number of skills. You have to be able to figure out the value of the property. You have to estimate repair costs accurately. And you have to negotiate with sellers. Because you're dealing with investment properties, you have to be able to negotiate a very good deal. That almost always means getting the seller to accept a significant discount of what they might get if they sold the property conventionally. Most sellers won't do that, which is why so many potential prospects fall out of the funnel.
It seems like your short on cash and need some income now. I have a different suggestion - find a different job. I know gurus like to same bad things about a J.O.B - just over broke. But guess what? wholesaling is a job. A commissioned sales job. A difficult one that requires time and money to get rolling. If you need cash now, there are other jobs that will give you a paycheck with little investment of your own. Get one of those to support yourself while you invest the time and money and develop the skills to be a wholesaler.
Mansfield, TX · Member since 2013 · 207 posts · 26 votes
12y
@Jon Holdman Agreed, but I would describe wholesaling more so as a business rather than a job and I think that is an important distinction to make. You have to treat it like one in order to be successful, because guess what it is a legitimate BUSINESS. You have to find ways to mitigate costs, expand your marketing budget, reach new prospects, negotiate better deals, network etc.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
Fair enough, @Bill Mitchell . In saying its a job I mean you have to put in the work in order to get paid. That's different than an investment where you have to put in money to get paid. If you don't do the work associated with being a wholesaler, and, for that matter, most small businesses, you don't get paid. Many small businesses amount to nothing more than "buying a job" for the owner. To get past that, I highly recommend "The E-Myth Revisited".
Fort Worth, TX · Member since 2013 · 11 posts · 0 votes
12y
@Josh R. yes but they did not lower the price also I see you are located in the same city as me maybe we could exchange contact info so you could give me some insight
Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
12y
I'd look at those first couple of deals as good learning experiences and hopefully gave you a better idea of how to estimate repairs.
If you learn to get a better estimate on repairs and have gotten some experience both negotiating with sellers and marketing to your rehabber buyers it wasn't a waste for you.
As far as the original question about how you can market pretty much free, if you have been hitting Craigslist hard already you aren't going to find anything cheaper than that. Driving for dollars can work but you do have to spend a bit of time on that and of course gas ain't cheap so far from "free". Also once you FIND a house you need to do something with it. At the least you will need to look up the mailing address for the owner and send a letter. If you make them yourself you are probably spending like $0.50 each, mostly the stamp. Of course if you really only have $50 then you probably can send like 20-40 letters and get one fill up.
Specialist · San Francisco, CA · Member since 2013 · 227 posts · 158 votes
12y
@Account Closed
You have been given a lot of good advice.
@Chris Piper example on how to place CL ads is spot on and
@Will Barnard advice about checking out the court house is a great place to find cash buyers and @Jon Holdman always gives advice worth reading and I personally always try to read his advice because it's really good.
I think your next move should be to build your network. Networking is just as important as marketing and in many ways more profitable and your ROI is much higher in my opinion.
So, the only thing that I have to add is five things that has helped me greatly in my real estate career;
Build your Network - Find agents, use bird dogs and network at real estate club meetings with other investors and landlords. Get your name out and create your personal brand as an investor and someone who people want to work with.
Networking 2.0 - Your best and easiest deals will come from word of mouth. I could write on and on about deals that came from "word of mouth" or referrals but I'll save the space and just say fully use your network to create your deal flow, you'll make more money and make more money faster.
Networking 3.0 - Keep in constant contact with your network. Most of your deals will come from a hand full of people but don't drop or ignore the ones who are not bringing you deals. Even if someone in your network only brings you one deal a year, if that deal makes you $10k then it was worth the effort to keep in touch. Especially because keeping in touch is basically free.
Networking 4.0 - Friend your network - I'm am constantly going to lunch, dinner, grabbing a beer or coffee with people on my network. I enjoy getting to know the people I work with and personalizing yourself and becoming a friend will help bring you more deals and better relationships when you know the people who are helping you.
Reward your network - Once you know who works for you can customize what you give them. I have a friend who has brought me deals for years and whenever I'm in a new city I buy her a Starbucks mug from that city because I know she collects them. Her goal is to get a mug from every state. I wouldn't have known that unless I spent time to het to know her and it's a way of rewarding her without giving her money and it has nothing to do with any one deal. It's a gift.
Insurance Agent · AZ · Member since 2013 · 306 posts · 161 votes
12y
@Steven Stokes What great advice you've given. I think your advice can apply to any "sales" type of transactions/business dealings. Essentially it's about building, fostering and growing relationships. Love the story about sending the coffee mugs from the Starbucks you've visited in varying cities. And while it's not anything expensive, it's much more rewarding because it means you listen.