Wholesaling is the perfect way to get involved in real estate with no money. However, as with anything, taking the first steps can be challenging. While the process is fairly simple conceptually, knowing how to find and land wholesale real estate deals isn’t always as easy as it seems.
When you’re new to the real estate market, all of the moving pieces you need to keep track of can get somewhat overwhelming. To help, here’s our list of everything you need to know about finding those first leads and getting them under contract.
Generating wholesale real estate leads
The first step in landing a wholesale real estate deal is finding properties that will sell for below-market value. There are several ways to find real estate leads, but the most efficient methods involve using your network or modern real estate technology.
Reach out to real estate agents
Real estate agents know more about the distressed properties and motivated sellers in your market than anyone else. If there are properties that aren’t fit to be listed on the Multiple Listings Service (MLS) because of damage or a short turnaround time, local agents may send these properties to you. As a bonus, you can help agents off-load their expired listings or other properties that they’re having trouble selling by connecting them to cash buyers, for a fee.
Just remember that, like you, real estate agents are running a business. Don’t expect them to send you leads without expecting something in return. They may expect referrals, representation at your future closings, or a cut of the assignment fee.
Whatever the expectations, make sure both parties know who’s getting what from the start and do whatever you can to make helping you worth their time. This will go a long way in establishing a long-term partnership.
Real estate lead generation software
Modern real estate lead generation platforms are a great way to find motivated sellers who are experiencing financial distress. These platforms aggregate data that enables you to search for properties based on whatever criteria you want. With the right platform, you can search by property features and characteristics, owner financial status or financial distress factors, and even demographic information.
Once you find properties that match your search criteria, you can add them to a list and launch a marketing campaign or explore each property further by looking at the property details that the platform provides.
Driving for dollars
Driving for dollars is a unique lead generation strategy because it focuses on distressed properties that are damaged or neglected. To find these houses, pick a neighborhood and drive through it, looking for houses with tall grass, broken or boarded-up windows, and other signs of neglect or disrepair.
A few real estate lead generation platforms have built-in driving for dollars tools. If you’re using one of these tools, you can add properties to your lists and access detailed property insights as soon as you find them. This way you can determine if a house will make a good investment within moments of discovering it.
Virtual driving for dollars
Virtual driving for dollars is a new strategy that’s becoming increasingly popular, especially among investors who are involved in virtual wholesale real estate. It’s just like driving for dollars, except you’ll use a real estate platform with a street view to canvass neighborhoods without being on-site.
Like the traditional approach, virtual driving for dollars is one of the best ways to find distressed and neglected properties. It’s also a great way to expand into new markets that you can’t easily visit in person.
Marketing to motivated sellers
Once you find a list of properties that you think will make great wholesale real estate deals, you’re ready to start reaching out to motivated sellers. Before you start, it’s important that you understand that marketing can be expensive, so you need to be strategic when launching campaigns.
However, that doesn’t mean you can’t market at all. With modern technology, you have several options at your fingertips.
Bandit signs are simple signs that you place in heavily trafficked parts of your market to let motivated sellers know you’re buying houses. They usually display a short message like “We pay cash for houses,” and list your phone number.
Bandit signs are very affordable and are meant to grab the eye of anyone who is looking for a fast cash buyer. However, there are a few potential downsides:
- The signs can be removed or destroyed
- It’s difficult to target your outreach
- They may violate local zoning and sign regulations
- People may mistake you for a real estate agent and call about listing their homes
Regardless, bandit signs are a low-cost way for new wholesalers to start marketing. Some of the industry’s leading investors landed their first deals with bandit signs, so they’re always worth a try. Just be ready to answer your phone every time it rings once you place your first sign.
Direct mail campaigns are highly effective in wholesale real estate. Unlike texting or cold calling campaigns, someone can’t ignore your message. They also give a motivated seller something to hang onto if they’re interested in selling but not ready to sign a real estate contract immediately.
However, they’re also one of the most expensive options you can choose, so we recommend only mailing highly-targeted lists if you’re new to the industry. Some factors you can focus on to create targeted lists are distress factors, demographics, and neighborhood/geographic area.
Social media and PPC advertising
Social media is a great way to reach people without relying on your network. If you aren’t interested in paying for ads, you can employ social media strategies to put out content that lets motivated sellers know that you’re buying houses. This approach takes some time to develop, but once you have a well-established platform, it can be very profitable.
The other option is to use pay-per-click advertising. Unlike direct mail, this strategy doesn’t have to be expensive for a new investor. You can control your daily or monthly budget and select parameters that limit your ads to a specific audience.
One potential downside to PPC ads is that they take marketing skill and they can be tough to master in a short amount of time. You may end up spending a lot of money experimenting with retargeting and figuring out how ads work in general. However, if you’re patient, PPC ads can pay off, because they’re one of the most powerful tools for reaching your target audience.
Real estate experts agree that cold calling is the most effective way to market to sellers. Unlike the other strategies on this list, you have nearly complete control over how many people you reach at one time when you cold call.
To start calling, all you need is a real estate lead generation platform, a dialer or cell phone, and a calling script. Of course, as your real estate business grows, you can expand your calling operations, but getting started really is that simple. All you have to do is call someone, have a quick conversation, and figure out when they want to sell their home.
Taking the first steps in your real estate wholesaling career can feel overwhelming. While the process is fairly easy to understand, taking action can be a different story. There are a lot of different ways to find deals, and everyone on YouTube seems to have a different strategy that you “can’t build a business without.”
The truth is that many successful real estate investors have built businesses off of many different investing strategies. The most important step they took was getting started, whatever that involved. Don’t let yourself get so overwhelmed by the options that you don’t do anything. That’s the quickest way to fail in wholesale real estate.