Purchasing wholesale real estate properties is one of the best ways to get involved with real estate investing. To briefly sum it all up, real estate wholesale investing is buying a property and turning around and selling it to an end investor. Like anything else, however, there is a chance for both success and failure. To succeed as a real estate wholesaler, you must understand the process and have a bit of knowledge about how it all works.
Every wholesaler has their own particular way of doing things, but here are a few general concepts you must know before getting involved in the real estate wholesale industry:
Step 1: Research the market you are interested in
Before jumping into the wholesale real estate business, it is essential to get a thorough understanding of the market you are looking to get into.
When doing your research, be sure to get a feel for the home prices, the different neighborhoods, surrounding amenities, and what types of properties are available in the area. Then once you have researched the market and it seems like a good opportunity, you are ready to dive into the next steps of your real estate wholesale investment adventure!
Step 2: Build a buyers list for your area
Without buyers, you don’t have a wholesale real estate business. That’s why, before really getting started, it’s important to have a buyers list in place. As a real estate wholesaler, you serve as a middleman between sellers and buyers. Having a substantial list of potential buyers before having properties is a way to ensure you know where to market the deals you have.
Building a buyers list takes some effort, but it’s pretty simple. Some of the ways to create a buyers list include attending networking events, email marketing, social media, and direct mail.
Step 3: Understand the Numbers
The real estate wholesale business is really a numbers game. If you don’t understand the numbers, it will be tough to be successful. While it is important to find properties that are low cost, you want to make sure that the property is valuable enough so that the end investor sees potential. Low-cost properties will more than likely come with a long list of repairs and expenses that are required. Additionally, costs like taxes, insurance, utilities, and other costs will quickly add up after a few months. Before making an offer on the property, be sure that the property is what your end buyer is looking for, otherwise, you may not have much of a profit.
Step 4: Determine your financing source
To avoid a sticky situation, you must make sure you have secure financing. Having the money in place will help the process move smoothly, without extra hurdles along the way.
Step 5: Find Motivated Sellers
Now, the fun part begins! At this point, you are ready to search for property. There are quite a few ways you can go about this. You will want to connect with motivated sellers who are eager to get rid of their property. Typically, when you work with motivated sellers, you can secure a deal for under market value, which means you will make a bigger profit.
Here are a few ways you can connect with motivated sellers:
Social Media: Social media is an excellent way to connect with others and discover leads. Facebook, Twitter, Instagram, and LinkedIn are great platforms to use to help you reach out to sellers and drive traffic to your website. With a consistent social media strategy, you can build relationships with your audience and get ahead of your competitors.
Email Marketing: Email marketing is a low-cost marketing strategy that cultivates relationships with your audience. This method is an effective way to connect with your audience and let them know that you are searching for properties. The great thing about email marketing is that these messages can easily be shared. While someone in your contact list might not have a property for sale, they might know of someone and spread it.
Networking: The real estate industry is a networking industry. The more people you know in the industry, the more references you will get, and the more leads you will be able to discover. When you meet with other real estate professionals, you can let others know to keep an eye out for potential opportunities that might be good for you.
Cold Calling: Many successful real estate investors use a cold calling strategy. Cold calling connects you to prospects you might not otherwise connect with. Cold calling is a way to reach those who don’t use social media but can still use your services. It is also a quick and efficient way to build relationships with potential leads. When cold calling is done by a team of experts, you can expect to see great results.
Online: There are also many websites out there, such as Realtor.com or Zillow, that list distressed properties. This might be a good place to start to get an understanding of what’s available.
Step 6: Make An Offer and Turn It Around
Once you have found a good property with value, it’s time to make an offer, close the deal, and then turn around and sell it! Most wholesalers just connect sellers with new buyers without ever owning the property and profiting from the property. Wholesalers can also do a double closing, which means the investor would own the property. In this situation, the investor must pay all of the costs that are associated with the property.
Call Motivated Sellers: Helping You Discover The Best Opportunities
If you are looking for additional income, real estate wholesaling is a great opportunity. Before jumping in and buying properties, do your due diligence, and be sure that you understand the process.
Once you have a good understanding of what you are interested in, our team at Call Motivated Sellers is here to help you find the best wholesale opportunities out there.
Ready to get started? Contact our team today!