With a lot of folks facing challenging local real estate markets there has been a lot of talk lately about wholesaling outside of your local market or virtual wholesaling.
Yes, wholesaling outside your local market can be done and a lot of the tools I teach can very easily be adapted to this type of investing, but I have one warning for you before you start and before I continue to share some information about it: if you are not willing to do the work that is required to build a buyers list, find deals and talk to buyers and sellers about properties in your local market, then doing it across the country still won’t work for you.
With that being said… if you are willing to build a buyers list, talk to motivated sellers to find deals and put them under contract then talk to your buyers list as they inquire about the deal, then yes, this is a viable business model.
In fact, if you sort of cross your eyes funny, it is the exact business model I run here on these sites except I am doing it with a real estate license and skipping a few steps as I’ll show you below.
For real estate investors that do not have a real estate license here is a basic overview of how the process works:
- Start building your buyers list so you have buyers to sell your deals to
- Market to find motivated sellers
- Negotiate with sellers to put deals under contract
- Sell your contract to your buyers list for a profit
- Repeat as often as you like
I know that seems over-simplified, but that really is what the system is. I document in the various free training I provide how to do each of those steps. All you need to do is look through these articles and the Real Estate Investor Wiki. Then tweak our systems to your unique situation and implement them for your business.
If you have a real estate license, the business model goes something like this:
- Start building your buyers list so you have buyers to sell your deals to
- Find great deals from other wholesalers, the government, banks or other agents/brokers with listings
- Put your buyers together with agents who help them buy these properties and collect a commission (or referral fee) on the sale
- Repeat as often as you like
Until my next post,
James
P.S. For a limited time only you can watch my hour long webinar on How To Setup Your Virtual Wholesaling Business for free.
Back from the gym and just had dinner with the family and now I am back to adding some additional resources for real estate investor wholesalers before our webinar in about 30 minutes on Setting Up Your Virtual Wholesaling Business.
The penultimate section I have to cover is closing your deal and getting paid. Actually, it is kind of a fun topic and one that is really important in the process. Here are the updated resources:
Closing Your Deal and Getting Paid
- Read The Sales Process: Selling Your Wholesale Deal (Article)
- Read The Closing Process: An Overview (Article)
- Read Assignment of Contract Versus Double Closings (Article)
- Read Finding A Great Title Company (Article)
- Download Cash Flow Junkie – Wake Up Money For Real Estate Investors (Real Estate Course Download for Real Estate Investor Bronze Members)
By going through the resources above you should have a pretty good idea of the closing process and how to get paid from wholesaling, but be sure to check the additional resources we have in the Real Estate Investor Wiki.
Until my next post,
James
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.
