OK, wholesalers, today I’m going to answer one of our most common questions:
How do I actually find deals as a real estate wholesaler?
This aspect of our business is arguably the most important, so I want to highlight the top five ways to successfully do it.
I’m pretty excited to share this with you, so let’s just jump into it!
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
The 4 Best Strategies for Finding Deals as a Real Estate Wholesaler
1. Direct Mail
The number one way to get a solid deal flow in your real estate wholesale business is through something called direct mail marketing.
We have found that direct mail is the most predictable way to generate consist deal flow, but it does come with a high cost.
In essence, you pull a list of potential motivated sellers based on specific information like age, income level, zip code etc., and then hire a company to send letters or postcards to that list.
When you hire them, it can get expensive very quickly; however, if your income from it justifies the cost, it’s worth it!
For example, if I spend $3,000 in direct mail costs but it gets me a deal or two that profits me a total of $8,000, then obviously you can see it’s way worth it.
It definitely takes money to make money with this strategy, but if you have it, there is no question — direct mail is the way to go.
We probably get 90% of deals using this marketing strategy.
Now, there are many different types of letters and/or postcards that you choose from when sending out mailers, ranging from fonts that look like they are handwritten to postcards that look like a promotional flyer.
Related: The 5 Best Side Hustles for Investors Growing Their Wholesaling Business
The truth is there is so much to be said about direct mail that I could literally write an entire post dedicated to this topic (and I think I will pretty soon). But for now, Brandon Turner’s guide is probably the best resource on it. Click here to access it.
2. Networking With Other Investors
The second best way to generate deal flow in your wholesale business is by networking with other investors.
The best way to do this is to join your local real estate club, but beyond that, meetup.com is also a great source for real estate related networking events.
Sometimes more elderly buy and hold investors have headache rentals that they simply don’t have the energy for anymore, and if they know you as a wholesaler, they’ll likely use you to unload their deals.
Another great deal source is when a fix and flipper has a bad deal. Maybe they run out of money on the rehab or find that the project needs more work than expected, and now they just need to recoup their losses on it and move on.
Again, if they know you as a wholesaler and they have a property they want to get rid of, if you get your name out there and have a good reputation, you can easily become their “go-to” guy for unloading property.
Also, sometimes investors just have too much inventory for them to handle. So, for a quick wholesale fee, they’ll likely offer you their properties, and if the numbers work, there will still be enough meat on the bone for you to resell it. Or you could possibly joint venture on it or sell it on their behalf for a fee.
Either way, real estate has always been a relationship-based business, and the more people that trust you and know you, the more opportunity you have to do business in your market.
3. Driving For Dollars
Next is the strategy for the hardcore dedicated ones! Driving for dollars is when you drive around to desirable investing areas looking for houses that show signs of distress — things like boarded up windows, broken down portions of the property, tall grass, a lot of junk in the yard, etc.
Once you find one, write down the address and go to the county records office website. See if you can find the owner on the title, and if you can, you reach out to them in person by phone or by mail and ask if they’d be interested in selling.
This strategy takes a lot of work, but if you’re consistent with it, it’s an AWESOME way to get deals that doesn’t cost any money!
Finally, the last strategy is finding deals on Craigslist.org. The FSBO section of Craigslist could practically be called the “off-market” MLS, and though the vast majority of stuff there is junk, there is definitely some gold in the dirt!
We actually wrote a post that will take you step-by-step in automating the deal flow from Craigslist here. If you use this system — even though you’ll have to evaluate probably 100 properties before you get an actual deal — it’s free and it’s as easy as checking your email inbox!
It can’t get much sweeter than that if you don’t have any money for direct mail!
I hope you found this post helpful today.
Do you know of any other creative ways to get deals?
Share them in the comments below!