Wholesale real estate is one of the few legitimate business opportunities that give you the chance to make a lot of money without risking much at all. In order to land deals and assign them to cash buyers, you only need one thing: a good list of wholesale real estate leads.
If you don’t have much exposure to the industry, finding this list may seem like a daunting task. However, it’s far easier than you might think. Generating wholesale real estate leads is as easy as finding off-market properties that need to sell for below-market value, and these houses are everywhere. So if you’re ready to become a real estate investor, here are five lead generation strategies that will get your business off the ground immediately.
Public records offices
The first place to start looking for real estate leads is your county’s public records office. Here, you can find information on pre-foreclosures, recent divorces, bankruptcies, and many other kinds of financial distress factors that motivate owners to sell. You may also be able to find information on upcoming foreclosure auctions, condemned and vacated houses, and other types of real estate that you can buy for below-market prices.
The United States Department of Housing and Urban Development provides another free online resource that is great for lead generation. Real estate owned properties, also known as REOs, are bank-owned properties that failed to sell during foreclosure auctions.
Because banks are not in the business of holding and managing real estate, they want to move these properties for whatever amount they can get. This means deep discounts for you! Unlike the Multiple Listings Service (MLS), you don’t need to be a licensed realtor to access this list, so this is a great way to find a lot of distressed properties, especially if you’re working in multiple markets.
Online and offline auctions
When a property enters foreclosure, the lending institution repossesses it and then tries to sell it in an auction. Usually, these properties sell for far less than they’re worth, so auctions are a great way to generate leads and buy them at the same time.
If you’re going to go this route, you need to be sure to evaluate and comp properties before you show up so you know how much to pay for a property in order to make money on it. Our tip: don’t get overly excited and make an offer before your due diligence is completed. Most of these properties are also closed to inspections before purchase, so you should leave yourself enough wiggle room to account for any surprises you might encounter after the purchase.
The real estate industry is a people business. How you leverage your network of colleagues, friends, family, associates, and prior business contacts will all play a part in your real estate investing success.
In order to build a large real estate wholesaling business, you need to have a network of people who know about opportunities as soon as they become available. The best people to have in this network are real estate agents, landscapers and property contractors, real estate attorneys, lenders, and other real estate wholesalers.
To meet these people, drop by their offices with gifts or attend local real estate meet-ups. Of course, both of these strategies take tact. But as some investors who are pros at working with real estate agents say, dropping off a gift at a local office and letting a new contact know what you do and how it would benefit everyone involved can go a long way to establishing a fruitful partnership. Just be careful to choose people you can trust and enjoy working with. Otherwise, networking can quickly turn against you.
Real estate lead generation software
Technology has made almost everything in life easier, and that’s certainly true of real estate lead generation. With the right real estate app, generating motivated seller leads and finding distressed properties is as easy as selecting a search area and filtering for any specific motivating factors or property characteristics. Depending on how broad or niche you want your search to be, you can instantly generate lists that range from 10,000+ leads down to just a few.
What are the best wholesale real estate websites?
There are several other real estate websites that top investors use to evaluate opportunities when they wholesale properties. Here are two of the top recommendations that generally integrate with other services and provide information you can trust:
- Zillow is a must-have property information resource for investors, home buyers, and real estate agents alike because of its comprehensive collection of data on various properties in the U.S. and its willingness to play well with other apps and services
- Fundrise provides new and experienced investors with the opportunity to get in on the ground floor with several well-vetted projects that have low barriers to entry for investors who want to buy wholesale real estate but don’t always have the capital to do it on their own
There are many other options out there for investors looking to find communities and opportunities on the web, but not all of them are focused on wholesaling. They provide marketplaces for turnkey income properties, group investment opportunities in larger projects, and other paths to a return on investment instead.
Generating quality leads for wholesale real estate isn’t as hard as it sounds. There are a lot of motivated sellers in every county, whether you live in a large city or a small town. As long as you’re willing to search for opportunities, you’re going to find them.
Just remember, the key is to show them the benefits of selling. Whether you’re helping them clear debt while preserving some capital or trim stock and focus, your approach needs to be about why the owner would be better off selling. If you work with property owners and understand their needs, you can often convince them to accept your offer quite easily.
Best of all, there is very little money required to start your wholesaling business using this model. All you need to get started is a bit of sweat equity and the right mentality!