How to Find Houses to Wholesale
Real estate investing is like a well that never runs dry, the deeper you dig the more water you get. Did you know you can be a real estate investor with little or no money?
It’s definitely possible. Wholesale real estate investing is one such strategy to pursue if money is a set back keeping you from buying rental properties.
For a novice real estate investor, wholesale real estate investing is the best approach to break into the real estate business. This is because it has lower risks and a quick turnaround.
It’s important to note it might not have big profit margins. However, it still remains to be a good option especially if you don’t have funds and you want to dive into the real estate business. You can use it as a stepping stone and later transform to other alternatives that go in line with your goals.
Sounds easy? Right?
Unfortunately, it’s not simple as it sounds.
Just like any other investment venture it has its own share of intricacies and risks. Therefore it is essential to know different methods on how to find wholesale deals that will give you maximum returns.
First let us answer a few questions on wholesale real estate investing then later on discuss the methods you can employ to get good profits.
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What are wholesale properties?
Good potential wholesale properties are homes owned by distressed owners. They can be bank-owned homes, short sales, or abandoned foreclosures. This makes them the best targets for investors seeking wholesale homes.
There are two ways to conduct a wholesale deal. This includes:
#1: Contract assignment
In this strategy, the investor strikes a deal with the owner to grant them rights to buy the home. The investor in return sells the rights to a different willing buyer.
#2: Double closing
In this option, you need to have finances. The wholesaler actually buys the home and then sells it very quickly to another buyer.
What is a good wholesale deal?
Getting your first wholesale deal can be very hard, but very important because it will open doors to build your wholesaling business. It is, therefore, crucial to know what a good wholesale deal is.
This will make your search process easy at the same time help you to make substantial profits. Here is what to look out for:
Your main goal as a wholesaler is to ensure you win a contract at a low price then sell it at a higher price to make significant profits. In order to achieve this, you should find properties that go at low prices. These are mostly distressed homes.
Homes on the Market 90+ Days
The other kinds of properties to check are those that have been in the market for a long. The owners are desperate to sell their houses. They are in a position to sell at a discount. This might be a good wholesale deal for you as an investor.
Off-Market Real Estate
Off-market properties can also be purchased at a steep discount. You will have the opportunity to sell them at or below market value and still make profits.
Methods for finding wholesale properties
Property wholesaling is about how many deals you close. The more the deals the more returns you get. But how do you find these properties to give you a sale? Here are a few methods you can use.
#1: Bandit signs
These are outdoor “sell your house for cash” or “we buy houses” signs that are strategically placed at busy street points and high traffic places. This is an easy and cost-effective technique.
In some cities bandit signs are illegal. Therefore you must check on your local laws and regulations to avoid running into problems with your local authorities.
#2: Driving for dollars
This is an old-fashioned but effective method where you get into a car and drive around the neighborhood looking for homes showing signs of neglect. You then make contact with the seller and make your offer.
#3: Direct mail
This entails sending postcards or letters to specific homeowners expressing your interest in purchasing their property.
This method can be expensive because you must purchase a mailing list and send several emails before getting feedback.
It’s through networking you can find potential unlisted sellers. You can reach them through your network of agents, other investors, and real estate attorneys.
It is wise to join a local real investment club and be an active member by attending meetings. With many contacts, you increase the probability of landing a good wholesale deal.
#5: Internet Marketing
The world has evolved and the internet has made it easy to reach thousands of people in just one click. You can use social media platform or create your wholesale website. Once the website is up and running apply search engine optimization (SEO) marketing and pay per click (PPC) advertising.
When property owners want to sell the property very quickly they post on craigslist. On this platform the competition is stiff. Despite the strife, you might get a homeowner interested to make a deal with you.
#7: Private sellers
These properties are owned by sellers with a signed listing agreement with real estate agents. Getting a property with your investing needs might not be simple but by going through several listings you stand a chance to land a property you can wholesale.
Your main objective is to find an undervalued property. Since these properties are attached to a real estate agent the wholesaling process might be a challenge, but with a good property and a motivated seller, you can get a good wholesale deal in private sellers.
Wholesaling property can be a profitable business for new real estate investors with limited funds. The secret is to explore all available avenues to get properties that you can quickly resell and get huge returns.
Thanks for reading. Check out these resources below.
Nick Foy, founder | Under30wealth.com
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