Real estate, as an industry, is like a big box of chocolates offering a plethora of investment vehicles: rental properties (residential or commercial), fix-and-flips, buy-and-holds, wholesales, and so on.
While investing in real estate is an enticing proposition for many people, it can be as daunting as any other business, especially if:
- You don’t know where to start
- Money is tight
With wholesaling, however, there is a strategy that allows you to circumnavigate these stumbling blocks.
Now, one of the most commonly asked questions when it comes to real estate wholesaling is, “How do I find my first wholesale deal?”
This question is understandable, considering the first wholesale property is often the hardest to find for many new wholesalers. Analysis paralysis is partly to blame, whereby many new investors concern themselves so much with the moving pieces of a successful wholesale transaction that they often end up never making the first step.
Look, your objective as a wholesaler, first and foremost, is to search for potential properties owned by motivated sellers. When you do, analyze their viability as an investment, and if feasible, get them under contract. To seal the deal, simply assign your rights to these properties to investors.
It may sound easy on paper, until you get down to the real thing.
But these simple strategies can help you fast track your way to finding that wholesale deal.
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
Bandit signs in the real estate world never get old. These are those ubiquitous ad signs that say things like, “Sell Your House for Cash,” or “We Buy Houses.”
They may be unsightly (and annoying to some) but they still remain an incredible way to attract buyers. Just remember there is an art to putting up bandit signs that is effective and will keep you on the right side of the law. (Please check local laws.)
Driving for Dollars
We may be living in 2020, but sometimes there is nothing that beats the old tried-and-true techniques. The old-fashioned strategy of hopping in a car and “driving for dollars” may just unearth you your first wholesale property.
Ask investors who started out by wholesaling properties and some will admit that this is how they kicked off their real estate careers.
So, what exactly will you be on the hunt for?
Well, distressed properties for one; looking for homes exhibiting signs of neglect is one way to spot potential wholesale properties. So is finding vacant probates.
Once you spot these properties, contact their owners to make an offer. Anytime you are in the car is an opportunity to spot potential wholesales.
This is more of a shot in the dark, but a shot with a fair enough chance of hitting your target. Your mail should be directed to owners of pre-foreclosure properties, high equity or delinquent mortgages, probates, and other motivated sellers.
You can purchase lists online from a number of sources, and run your letter campaign simultaneously with bandit signs. However, it may not be the best choice for a first deal, especially if the money is not happy (unless of course, you’ve got no issue footing the postal bill).
You can also try a simple “I Buy Houses” ad in the newspaper. There is a chance you may generate a lead from homeowners who don’t hang out on the Internet.
Anyone who clicks on your ad or searches the keywords you’ve optimized for may be motivated sellers who need your help in selling their property.
Expired MLS Listings
For some reason, not many properties get this far. But, that only serves to increase your odds of scoring your first wholesale deal.
Get a real estate agent or broker to help you in your quest. Hone in on a location (ideally in the same zip code as your bandit signs and mail campaign) and identify properties to go after. Then write the owner of the expired listing a letter declaring your interest in their property.
Craigslist is a great way to find properties, wholesale or otherwise. Many owners use Craigslist to post properties they are keen to sell quickly.
The competition here may be fierce, but who knows? You may end up giving the owner an offer they cannot refuse. You might also want to consider other known places to search for houses: Hubzu, ForSaleByOwner, and Auction.com.
How do you go about finding wholesaling deals? I want to hear your strategies!