By Bruce Kellogg and Gary Massari
Wholesaling is one of the most lucrative ways to get started in real estate and here’s why: Most of what an individual needs to get started is organic; very little money is required, finding buyers is relatively easy, and the knowledge is readily available in the right real estate circles. The basic knowledge to successfully wholesale is having knowledge of the market and knowing the ARV (after repair value), repair cost, and right purchase price. The next step is to build a reputable buyers list, so here is the fastest and most reliable methods to find qualified buyers immediately:
- Auctions: By attending auctions you can find a great number of buyers to add to your list.
- Real Estate Investor meetings: Rehabbers hang out at these meetings so come early and stay late to network.
- Craigslist (a goldmine) Download Gary’s free book on this website https://reifortunes.com How to Make $10,000 a Month on Craigslist
Let’s understand that wholesaling is different than actually buying a property. You in essence are purchasing and selling the rights to a contract and not a property. You purchase the property writing the contract representing you are a buyer and you have the right to assign the contract to another buyer. During a short contingency period you immediately contact your buyers. It usually takes 1 to 3 days to assign a contract with a good buyers list, so let’s concentrate now on building a good qualified buyers list!
Types of Buyers
For a wholesaler, or any seller, there are altogether four types of buyers, as follows:
- Fix & Flip (“Rehabbers”) will pay the lowest amount for your contract
- Buy and Hold (Landlords) will pay more than rehabbers
- “Retail” (Homebuyers) will pay the most for your contract
- Other Wholesalers, and Co-Wholesalers (by agreement)
Hot Tip: Learn how to market to these types of buyers. Sometimes it’s just running a simple Craigslist ad, but the most effective method is building your list and emailing them as soon as you secure a contract. (Gary’s wholesalers actually call him directly!)
1) Website with “squeeze page” Give out free report Give out list of properties – best
2) Phone Number with “lead capture” Offer list of properties Use for marketing with voicemail and/or texting
3) Email address “Autoresponder” feature “Broadcast” capability
4) Analysis and Presentation Software (e.g., Done For You Marketing, Deal Analyzer, Comparable Market Analysis by REIFortunes.com, are great tools)
5) Social Media Presence
Hot Tip: We provide a complete turnkey marketing system to help your new students find properties and buyers!
There are basically two types of properties: off-market properties and multiple listing service properties. Off-market properties allow the wholesaler to purchase 30% to 40% under retail market. These mostly come from distressed owners who are in foreclosure, probate, divorce, tax liens, or distressed properties, usually abandoned properties, and require more work to bring them to market.
In any case, pick a market and study the trends, school rating, rent-to-purchase ratios, and, most of all, know your values! “Target” Markets (e.g., ZIP Codes) —based on activity (see MLS) —based on price range —based on affordability —become highly familiar
Hot Tip: Know your market and stay in your lane! This allows you as a wholesaler to build a reputation and credibility with your buyers!
FREE Ways to Find Buyers
- Place ads on Craigslist
- Call ads on Craigslist
- Call other wholesaler’s signs (“bandit” signs)
- Google search “We Buy Houses”, “Cash For Houses”, etc., then call
- “Hard Money” referrals
- Mortgage/Loan Agent referrals
- Call “For Rent” signs and ads for landlords
- Real estate broker and agent referrals
- Track HUD sales to landlords, then reach out
- Call MLS listings for referrals
- Call Zillow listings for referrals
- Call Redfin listings for referrals
- Cal Trulia listings for referrals
- Get Title Company or closing attorney referrals
- Insurance Agent referrals
- Property Manager referrals
- Attend landlord association meetings
- Check closed MLS sales using keywords (e.g., “foreclosure”) last 12 months, write buyer
- Order free title company list of cash sales last 12 months, write buyer
- Call FSBO ads and signs
- Talk to contractors working on the job to find out the owner
- Network meetups and REIA meetings (Might have small cost.)
- Cultivate IRA owners to invest
- Google Backpage.com, which is gone. Pursue the alternatives listed for free ads.
- Post on Facebook “Fan Page”
- Post YouTube video ad. 2 minutes, max.
- Post YouTube “virtual tour”. 5 minutes, max.
- Post to Blogger.com
- Post to property syndication websites
- Hand out business cards EVERYWHERE (small cost)
- Probate Attorneys
ADDITIONAL Ways to Find Buyers (costs involved)
- Place newspaper ads
- Place “Penny Saver” ads
- Put out “Bandit Signs” weekends
- Buy a list of cash buyers from listsource.com
- “Bird Dogs”-pay for buyer referrals (if they buy something)
- Mail to adjacent property owners with labels from title company
- Facebook paid ads
- Google paid ads
- YouTube paid ads
- “For Sale” signs (with owner’s approval)
- White yard signs
- Directional signs
Prospective Buyer Pitch (sample)
Hi, my name is Gary Massari, and I’m a real estate redeveloper here in the San Francisco Bay area. I buy discounted properties, paying all cash and closing costs, and then sell the rights to my contract to my investors so they can achieve larger-than-normal profits. My goal is to add two more qualified buyers to my list. Are you looking for any immediate rehab properties?
Marketing Properties to Buyers
Prepare a presentation making up a scanned flyer, or marketing software such as REI Fortunes’ Deal Analyzer and Comparables and Offer software, RehabValuator™, or similar. Then “blast” an announcement to your buyers list by voicemail, text message, or an email message which contains the property information/advertisement. Post to Craigslist.
Owns a real estate consulting business helping people make savvy investment decisions. This specialty is seller and creative financing. Bruce writes for top real estate publications on a monthly basis.
To get a hold of Bruce Kellogg call him at (408) 489-0131 or email [email protected]