How To Find Deals To Wholesale
Are you finally ready to start finding great real estate deals that you can wholesale for a fast profit? Well, let’s get a big picture overview of some of the various ways that you can find deals as a real estate investor or real estate wholesaler, and in future articles I will break each one down in detail.
Before I get started, I want to point out that there are dozens, if not hundreds, of variations on these methods for finding deals. You may talk to another investor who is doing something similar (mailing a different list of people, using a different flyer method, and so on). So, to spare you the monotony of endless variations, I will try to discuss some of the more common and/or more effective methods I know of for finding real estate deals from years of personal experience and the experience of the hundreds of wholesalers who I work with.
How Investors Find Deals
According to a survey of investors in Gary Keller’s book, The Millionaire Real Estate Investor, 32% of their deals came from networking, 28% came from real estate agents and the MLS, 10% from driving and walking neighborhoods, 9% from newspapers, 7% from foreclosure listings, 4% from For Sale By Owner (FSBO), 3% from Internet and Database research, 2% from targeted marketing and 5% from other sources. So, there are many ways to find wholesale deals, we will be focusing on locating motivated sellers.
Motivated Sellers
These folks should be your main focus: finding sellers that need or want to sell their house. We will be trying to find sellers that are willing to sell their house at a discount so that we can wholesale it, at a discount, to make a profit. The challenge is that sellers don’t give away equity. What? I thought you just said that we are trying to buy houses at a discount. Now you are telling me that sellers don’t give away equity. Yes, that is correct. While a seller will not give away equity, they will trade their equity for a solution to a problem or challenge they are facing. So, as real estate investors and real estate wholesalers we are looking for problems to solve and ways to bring value to a transaction. That’s why we are looking for motivated sellers. Sellers that have a problem or challenge that we can solve.
What Motivates Sellers
Some sellers will be motivated by financial distress: they can’t make their payments anymore or need money for some urgent financial need like medical bills or to settle a divorce. They cannot wait to sell their house traditionally either for sale by owner or with an agent. They need an investor to buy it now – even if that speed means selling it for a lower price.
Some sellers are motivated for very positive reasons: they’ve been promoted to a much better job, are being transferred, and don’t want to deal with a vacant house to sell while they are focusing on their new job. Maybe they are getting married and need to liquidate one house. There are just as many positive reasons that people are motivated to sell as there are negative ones.
Top Methods for Finding Motivated Sellers: An Overview
Websites. You can have, and should have, a website for buying houses.
Newspaper Ads. You can run newspaper ads, of various sizes, in an assortment of different types of publications to find motivated sellers. You can place your ad in daily, weekly, monthly, free and paid newspapers. You can run classified ads or display ads. You can write editorial, advertorial or straight ad copy.
Signs and Billboards. Many investors use yard signs effectively. Some companies effectively use billboards, bus bench signs and other sign type marketing to find motivated sellers to buy houses.
Car Advertising. Some investors generate inquires and buy houses from signs on their cars and trucks while they drive around town. Some investors buy advertising on buses and other vehicles that sell advertising space.
Yellow Pages. Many investors find advertising in the phone book and specifically in the yellow pages an effective way to generate calls from motivated sellers.
Pay per Click and Pay per Impression Advertising. Investors can purchase advertising from search engines and internet advertising companies to generate traffic to their websites. This can generate inquires from motivated sellers via your website to buy houses.
Door to Door Marketing. Some foreclosure marketers have gone door to door to buy houses. Or, you could use flyers, post it notes or door hangers to put out marketing door to door to generate calls.
Classified Ad Websites. Websites like CraigsList, Backpage and other free, or low cost, classified ad websites are useful for generating inquires from motivated sellers.
Direct Mail. Mailing to various lists of homeowners can be a very effective way of generating calls from motivated sellers. The type of mailing you do – postcards, letters, et cetera – and the list you mail to – absentee owners, new filed foreclosure notices, vacant houses, et cetera – make the possible variations for direct mail marketing a huge topic for discussion.
In a nutshell, these are some of the ways that I use and that lots of other real estate investors and real estate wholesalers use to find motivated sellers to find deals.
Until my next post,
James
P.S. If you want to jumpstart your real estate investing business and find out the strategies that are most important, you may want to become a Real Estate Investor Bronze Member to access our personal systems and checklists and get access to our included consulting sessions.
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