Wholesaling Houses – 3 Easy Tips To Get You Started
Wholesaling properties can be easy and can be hard. It just depends on some simple principles. This article will help to get you started on learning to wholesale properties with 3 easy tips.
Before we get stared we need to answer the questions: What is real estate wholesaling? What does a real estate wholesaler do? What are wholesale properties?
A real estate wholesaler buys a house from a property owner at a discount and then resells the property to someone else who will either fix it up and flip it to an end user or hold it for investment property as a rental.
There are many tips that we could discuss but we will cover three that the beginner wholesaler should consider.
Tip #1 - Choose Your "Farm".
Select a geographical area that you will "farm". By "farm" I mean an area in which you will find your wholesale deals. Your farm can be anywhere but for beginners it's recommended that you choose a place that is convenient for you. You will need to go there frequently. You will need to drive the area and get to know it well.
Tip #2 - Know What A Deal Is.
Wholesale properties are bought at a substantial discount and resold for a moderate profit for yourself but with enough room for the buyer to make a profit when they rehab the property and resell it or rent it. Depending on the economy and the area, you may need to get the property under contract at 60%- 65% of the after repair value. The after repair value (ARV) of the house is based on the comparable sales of similar houses within a radius of .25 miles or less and within the last 6 months or less.
The buyer will need to spend money on repairs and other costs. This amount will be considered when setting the selling price as well as the price you will pay for it. This may sound confusing at first but as you gain wholesaling experience, it will become second nature.
Tip #3 - Develop a Buyers List.
Once you develop your farm and have found a deal, you must have a buyer to be able to sell the property and make your money. This takes several approaches.
Attend local real estate investor meetings. Network and let people know that you are a wholesaler. Collect investor's business cards. Ask if you can put them on your email list to let them know when you have a deal. You will never get a "no" to that question. You can collect names and info from people who call about deals that you advertise. You can call ads in the paper and if they are for sale by investors, get their info and ask if they like to be on your email list. It can be a slow process but you will be surprised how it will grow over time. The more the better. There are ways to build your buyer's list on the internet that will be covered in a later article.
These are just three basic tips for the new investor who wants to start wholesaling houses. There is a lot to learn but it is learnable. Wholesaling can be a fun and profitable business.
How To Build A Real Estate Wholesaling Buyers List
This is a very important to understand! Because without INVESTOR/BUYERS for the Real Estate that you have put "Under Contract" with the MOTIVATED SELLERS you have found, you will NEVER wholesale a single property!
There are 2 things, 2 must-have ingredients that all Real Estate Wholesalers need, and they are:
1.) Motivated sellers who have agreed to sell us their property at a deep discount!
2.) Investor/Buyers who want to buy those properties that we put under contract with the Motivated Sellers!
Without BOTH of these Wholesale Deal factors present, there will NEVER be a Wholesale Deal. EVER! Does that make sense?
So how do you go about finding these Investor/Buyers who have been searching to purchase wholesale priced property, just like the property that you have under contract with the Motivated Sellers?
The answer is a simple! The answer is MARKETING! You market for these individuals, it's that simple. You put the word out, and you tell the real estate investors of the world that have GREAT Wholesale Priced Investment Properties for Sale!
How do you market for these individuals? That's really the question you should be asking yourself! There are several "Key" ways to do this. Here are a few of the ones that I have had GREAT success using and am still using today as I write this:
* Online classified advertising! It's FREE, and it's POWERFUL! There have been studies completed that tell us that 7 out of every 10 Investors are looking on the internet when searching for their next property! Wholesalers need to be actively advertising their inventory online. I use several Free online classified sites such as:
* Craigslist.com * Backpage.com * Rehablist.com
just to mention a few of more popular sites. There are about 50 additional sites that my company lists our properties on absolutely FREE each week! Its boring repetitious work, but it pays off big time!
* There is also Ebay.com which is a pay-site, but gets HUGE traffic looking at your inventory. And there are several online real estate auction sites where we auction-off some of our property's.
* Real Estate Wholesaling Websites! Every Wholesaler should have his own real estate investing website, PERIOD! An absolute critical MUST HAVE if you want to be taken seriously as real estate wholesaler! Your company's website should be advertised on EVERYTHING that you do when marketing you business so the world can find your website and buy your properties!
There is also:
* Classified Advertising in the local and regional newspapers
* Direct Mail Postcard campaigns targeting Absentee Owners and
active Landlords who are actively searching for more units to buy!
* Real Estate Investment Club members join your areas local club.
* Bandit Signs
* Vehicle lettering
* Business cards
And many other marketing methods, but I think you get the picture!
What you're ultimately trying to do, is use all of these marketing methods to drive your traffic back to your Real Estate Website to shop your available property inventory online!
So as you can clearly see from these few examples of how to market for your investor/buyers, that almost everything you will be doing revolves around the use of the internet and your investor website!
If you do not have a computer you should make it your next purchase! Then get yourself online and get a real estate website immediately! Every single successful real estate wholesaler that I have ever met is doing the majority of the things that I just talked about.
If the world does not know that you are there, you are "out-of-business" before you even get started!
So the answer to the question "How do I find the Buyers who want to buy my Wholesale Property? is MARKETING, MARKETING! YOU FIND YOUR BUYERS THROUGH YOUR MARKETING EFFORTS! PERIOD!
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