Breaking into the wholesaling business can be challenging. Many real estate investors look at it as a way to build up enough cash to move on into the fix and flip market or to begin amassing rental properties. But before any of that can happen, you need to learn how to find wholesale deals. And the worst part of this is that no one can give you a step by step process to follow to land deals.
You need to be willing to go out and really put in the time and effort to learn what works in your area and in the niche that you have chosen. And in the first few months, you will need to focus on just a few fundamental aspects of the Wholesaling business to get your early few deals in motion.
Analyze Your Market
Before you go looking for deals, you need to know what is selling and what other investors are looking for from your deal. Think of it as working in a restaurant. The chef does not just prepare food and send it out to the patrons. First, the guest places an order. Then the chef can cook what the guest would like. You are going to be doing the same thing. You want to find and prepare what your buyer is looking for. And the only way to know what that might be is to understand the local market.
And the best way to know what other real estate investors are looking for is to network. You need to be attending meetups, connecting with local real estate Wholesaling business clubs and organizations, and attending networking events. Not only will this help you by increasing the number of people in your network, but it will provide a wealth of information as well. Before attending any event, be sure to have a list of questions prepared to ask the people that you meet. In the case of other real estate investors, the following questions will provide you with some valuable insight into the market.
- Tell me about your most recent deals.
- What neighborhoods or zip codes have you found to be in demand or desirable?
- What square footage or the number of bedrooms do you find to be the best in your target area?
- If you don’t mind me asking, What did you pay for your last deal in that area?
- Did you renovate? How much was your reno budget?
Gathering this information from several investors will provide you with a good idea of what is hot in the market and where investors what to purchase.
Apply What You Learned
Now that you know the areas that are drawing the interest of other real estate investors, it is time to go out and find your own deals. Jump in your car and begin driving the high interest areas. Look for properties that look like the owner needs to sell. It could be overgrown grass and landscape, broken windows and doors, homes that look vacant, or just a house in disrepair. Write a list of all of the properties that you find that could fit into this category.
Next, check out the county tax website to get the owner’s name so that you can begin making contact and an offer. You might also consider buying a high equity absentee list to gather more owners to add to your contact list. Next, it is time to create an introduction letter to mail to all of these property owners.
What you need to focus on is your call to action. State your name and number and that you are interested in buying their property. Don’t go into too much detail. You want to grab their interest and drive them to call you ASAP to learn more.
Letters will be best received when they are handwritten. If that is not something that you want to undertake, hire someone to write the notes for you so that they have a personal touch. You can also consider hiring a professional company to complete this process if you are looking at processing a large number of letters in a short period of time. This will take a small amount of capital, but the rewards will be worth it. Consider sending at least 500 letters per month and keeping the process active for 6 to 8 months for the best result in Wholesaling. With any luck, you will be swamped with responses and have more opportunities than you ever expected.