Many new real estate investors find an entry point into the world of real estate investing through a strategy commonly referred to as “wholesaling.” Wholesaling is essentially a business model wherein the wholesaler puts in the time and effort to secure a contract on a potential real estate investment. Once the property is secured by a contract, the wholesaler markets the property to other investors at a slight mark-up. Most wholesalers add an additional 3-5 thousand to the price of the property as their fee for finding the deal.
While there are numerous strategies for finding good investment properties, many new wholesalers neglect to spend a proportionate amount of time learning how to market these deals. By far the most effect strategy for marketing and selling wholesale properties is building a large list of local, active real estate investor buyers.
I have found over the years that getting to know other real estate investors and wholesalers can be a huge benefit to just about any real estate investing business. Where some people might assume investors are cut throat, secretive and greedy, I’ve actually found that getting to know other investors and wholesalers in my market has been extremely helpful. The truth is, every investor goes through cycles where they may be in the market to buy a property or unload a property. Having a strong network and list of local investors is an excellent tool for acquiring and disposing of properties and allowing your business to stay dynamic.
As such, building a large list of local investors (even those that you may perceive to be your competition) should be a top priority for any wholesaler.
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5 Tips for Building Your Wholesaling Buyer’s List:
- If you can access your local MLS, dig through your geographic area and look for properties that are or have been listed as a “fully renovated” property. This is typically an investor who bought the property at a discount with the intention of renovating and selling at a profit. This type of investor could be an ideal candidate for your future wholesale deals.
- Network at your local Real Estate Investing Club. Most active investors want to be put on your list and kept abreast of any new properties you may have.
- Always call the investors on the other end of the “We Buy Houses” signs. These are typically active investors who may have an interest in your properties as well.
- I also suggest calling landlords. There is no end to the amount of advertising that landlords use to market their properties for rent (ie. Newspapers, MLS, Craigslist, etc) It is highly likely that a decent percentage of landlords in a given area would have an interest in receiving your latest wholesale deals as possible buy and hold properties.
- The courthouse steps is another great place to network with investors. Take your business cards with you and ask for as many email addresses as you can. The monthly auction can be a great resource for investors if you are willing to put yourself out there.
While there are many other strategies an investor could employ to build a list, the important thing to remember is consistency. Continue to add names to your list and continue to email good deals to investors to keep them interested. You’ll soon learn that the more investors you add to your list, the more deals you’ll find yourself involved in – both on the buying and selling side.
Photo: Feliciano Guimarães