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Wholesale Wholesaling

Every Wholesaler’s Ultimate Guide to Driving for Dollars

Man driving.
Source: Why Keifrom Unsplash.

You know that boarded-up, overgrown property you drive by every day? Other wholesalers see those, buy them for a low price, and sell it at a higher price point to investors willing to fix the property up. You can do the same—the scouting method called Driving for Dollars.

Scour the streets from behind the wheel of your car, and seek out hidden opportunities in real estate! In this article, we’ll look at why driving for dollars is a good wholesaling strategy, how it works, plus tips on how to make your driving for dollars an organized process.

What is Driving for Dollars?

Real estate wholesalers who drive for dollars comb through neighborhoods looking for distressed or neglected properties from the back of their steering wheel. Once they see a potential property, they’ll cold-contact the owner to see if they’re willing to sell (i.e., a motivated seller). If the owner’s willing to sell, the wholesaler puts them under contract and then finds  an investor to purchase and rehabilitate the property.

The driving for dollars strategy is an excellent, no-brainer way for wholesalers to seek out potential properties and seal more deals. With a watchful eye and a bit of savvy, you could uncover hidden gems and pocket some serious profits by, very simply, driving around.

What Should You Look Out for While Driving Around?

Driving for dollars focuses on distressed homes that present the possibility to be sold under market value. But, what does “distressed” actually mean? Here are the 3 criteria that qualify a property as such:

#1 Physical Damage

Physical house damage represents the most important kind of distress that you’ll look for. While you’re driving around the neighborhood, look for obvious signs that the property is run-down in any way, like:

  • Broken windows
  • Boarded-up doors and windows
  • Damaged driveways
  • Damaged roof
  • Messy garden or yard

Clear signs of distress qualify a property for your list of potential properties to wholesale. Take notes and photos (if appropriate) of these signs so you can look back at them when you need to.

#2 Outdated Design

A house may be outdated if the interior or exterior design isn’t aligned with the current trends. Outdated designs can range from something simple like unpopular wall colors, unmentionable carpet in the kitchen or laundry space, or seriously unsightly popcorn ceilings that have to be removed for health reasons.

For interior designs, you’ll have to ask for permission from the owner to enter the premises. Once you get in, it’s as simple as keeping an eye out for outdated details.

#3 Owner’s Situation

An owner’s financial or other life situation might be a distressing issue that motivates them to sell an inhabited or uninhabited run-down property for below market value. The owner’s situation might not be something you can quickly see on a drive-by, so make note of physical signs of property distress first and use them as clues to learn more about the owner’s situation.

For example, if the house is a rental property, the owner might not live in it and could be too busy to deal with maintenance. They might want to avoid going through the hassle of selling the property and wholesaling could be an easy solution to get rid of it for quick cash.

Want to Make Driving for Dollars a Lot Easier?

Driving for dollars is a great way for beginner wholesalers and experts alike to invest in the market, but it takes time and patience. It can be difficult to keep track of every street you’ve driven on and every house you’ve seen.

Several apps designed to guide and organize driving for dollars are available on the market—the most notable of which is called PropStream.

The PropStream driving for dollars app is designed to make driving for dollars a straightforward process. The app’s features narrow your search according to your preferred filters to save you time on your drive.

PropStream driving for dollars app provides: 

  • Property results up to 50 miles away: Filters for specific property criteria
  • Filtered property information: Narrows your search by lot size, year built, home features
  • Multiple Listing Service (MLS) statuses: Tells whether the property is on or off the market, for how many days it’s been listed or off-market, and if the listing is below the market price
  • Pre-foreclosure or bank-owned: Removes properties listed as pre-foreclosure or owned by a bank, whether you’re interested in that or not

If you want a more flexible drive looking for distressed or vacant homes, another PropStream feature, “just drive,” gives real-time and recordable route directions. You can even tap on properties around you to see the property’s detail and save the listing for future reference.

Overall, PropStream helps you keep your freestyle property searches organized.

Drive for Dollars, Find the Right Property, and Profit

Driving for Dollars is undoubtedly a valuable skill to add to your real estate wholesaling repertoire. Whether you’re looking to make some quick cash or engage in some long-term projects, the effort that goes into driving for dollars can yield great rewards.

If you’re dedicated and have a sharp eye for detail, you’ll properly assess potential properties to wholesale and identify deals that fit your criteria. So get out there, keep that eagle eye on the street, and you’ll land a lucrative deal before you know it.

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Wholesale Wholesaling

Which Comes First in Wholesaling: Cash Buyer or Property?

Source: Scott Graham from Unsplash.

Wholesaling can be challenging, but you’ll close deal after deal if you have the right approach.

You might be wondering, though, should I prioritize getting cash buyers or finding a property first?

On the one hand, if you have cash buyers first, then you already have potential clients lined up to buy your property.

On the other hand, if you have a property to sell, then you’re left with just finding the right buyer to close the deal.

Is one better than the other? Let’s consider both sides.

What Happens When You Get a Cash Buyer First?

Believe it or not, finding cash buyers in your area is easier than you think, because there are a lot of sources that teach you how to do it.

The plus side of focusing on building your buyer list first is that, when you have a cash buyer first, you now have a guide on what kind of property you are looking for. Ask what your buyer is looking for, their purpose, price range, etc.

After interviewing your client, this will help narrow your search criteria. You know where to look and if you should scout for a commercial space or a residential unit. When you get back to your client to pitch a potential property, you have more chances of closing a deal, since you already know what they want.

Having a buyer first is also an advantage because you can ideally close quickly once you find the right deal. And the quicker you can close deals, the more deals you can do (read: the more money you can earn) each year.

What Happens When You Get Property First?

It’s easy to find buyers if you’ve found a great deal. Nobody declines an excellent real estate investment opportunity, after all. You only have to get the property under contract and you’re free to market or sell it to any of the potential buyers in your list.

That being said, here are few marketplaces and strategies you can pursue to find great properties:

  • Attend REIA Meetings: REIA stands for Real Estate Investors Association, where investors support and help each other via group and individual meetings. These meetings offer information, ideas, and networking within the industry. For example, this blog you’re reading is from REIA of Oakland, where we help anybody who’s interested in investing in Oakland County.
  • Online Paid Ads: There are 5.16 billion and 4.76 billion internet and social media users worldwide, respectively, which means using digital ads opens the door to better reach. Connect with your target audience through paid ads. You can set up ads through social media or Google.
  • Online Marketplaces: Facebook marketplace and eBay are great examples where you can list your property online. Although, you have to make sure that you do your research to ensure that you don’t violate any real estate policies on the platform.

Some people say print ads are still relevant. But we beg to differ. It’s a complete waste of time if you ask us, even if 82% of consumers trust print ads when making purchase decisions—in reality, nobody pays any attention to them, especially for major purchase decisions like real estate.

Newsflash: It Doesn’t Matter Which Comes First

I hate to break it to you, but ultimately, it doesn’t matter which you start with. Because finding good deals and serious buyers are the two biggest challenges of wholesaling real estate in general. Neither one is easy, and both are essential.

It takes time and experience to find good deals on the market. So what you really have to do is build your property portfolio and cash buyer list at the same time. Once you’ve mastered the art of finding good deals and have a broad network of cash-in-hand buyers, the rest will be relatively smooth sailing.

Do you agree that finding a good deal is the real challenge? Or do you think building a buyer list is tougher? Let us know in the comments below. And don’t forget to sign up as a member, so you can attend our upcoming meetings for more tips on real estate investing.

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Wholesale Wholesaling

Pro Tips on How to Wholesale Real Estate in an Uncertain Market

Source: Usman Yousaf on Unsplash

Every real estate investor knows how volatile the market can be. It’s not as crazy as stocks or crypto, but the real estate investment environment isn’t completely protected against shifts.

For example, the International Monetary Fund recently announced that they’ll be more aggressive on funding now. So, combined with the uncertainty we see in the economy, bond yields increased, directly correlating to a rise in mortgage rates for the real estate market.

But even with things like this, you can still invest in real estate and come out victorious.

How? Well, try wholesaling properties.

Real estate wholesaling is finding a deeply discounted property and then selling it to another investor, usually for a quick profit. And since you’re not the one who’ll fix it up or hold on to it for the long term, you don’t need to worry about market conditions as much.

Of course, wholesaling has its challenges in an uncertain market. But knowledgeable wholesale real estate investors deviate them easily—simply as they know how to play the game. Read on to know!

1. Increase Your Lead Conversion Rate

Finding motivated sellers is key to a real estate wholesaling business. You must constantly find people who need to sell their properties fast (usually because they’re facing foreclosure or divorce), as they present an opportunity for you to swoop in and make an offer.

In an uncertain market, looking for motivated sellers should be easy, as more people want to sell their homes quickly to free up cash. You can find them by networking with real estate professionals, driving around neighborhoods with distressed properties, and more.

But it’s not just about finding motivated sellers; it’s also about increasing your conversion rate:

Number of deals closed / Total number of motivated sellers = Conversion rate

The higher your conversion rate, the better you can weather any uncertain market storms. You already spend so much time and money on marketing and generating leads; you’ll do yourself a favor by optimizing your closing process to convert more leads into closed deals.

Continue to find motivated sellers, and improve your chances of closing deals with them.

2. Get Your Financing in Order

If you’re going to wholesale real estate, you need to have your financing in order before you start looking for properties. Getting your ducks in a line is important because, most of the time, the properties you’ll find will require some form of creative financing, like using:

  • Hard money loans: Loans based on property’s value instead of the borrower’s creditworthiness
  • Private money loans: Loans from private investors if you can’t qualify for traditional financing
  • Partner with another investor: Pooling resources together with a partner to finance a property

If you don’t have your financing set up beforehand, it’ll be hard to take advantage of these opportunities when they come up, especially when dealing with uncertain market conditions simultaneously.

For example, if the market crashes and you’re trying to get a loan from a bank, they’ll be much more hesitant to give you the money. Whereas if you have a hard money lender lined up, they’ll be much more willing to finance your deal.

3. Know Your Numbers

In an uncertain market where things can change rapidly, you need to be extra conscious of unnecessary business costs harming your cash flow. Are you spending too much on lead generation? Can you do without the tech subscriptions? Have an honest conversation on how you can keep expenses down to protect your cash flow in an unstable market.

Moreover, know your numbers well enough to make quick and sure deals without costing you dearly. Things like being clear on your maximum offer price, estimated repairs, and expected profit margin all play into the success of your wholesaling investment opportunities.

Say the market crashes and property values drop significantly—you’ll find yourself in a situation where the property is worth less than what you paid, depleting your chances of any profit margin. Only by knowing your numbers well can you adjust accordingly and still come out ahead.

4. Have a Plan B

Having a plan B when wholesaling real estate is always a good idea. And in an uncertain market, that truth is all the more true, where things might change quicker than you expect. There’s always the possibility that something could go wrong, whether it’s the deal falling through, the market taking a turn for the worse, property values dropping significantly, or all of the above.

So, what should your Plan B be? Well, that depends on your situation.

But some things you might want to consider include: having another property lined up to sell, having extra cash on hand in case of emergency, being able to lower your prices to sell, or partnering with another investor to share the risk. The bottom line is to be prepared for the worst, while expecting the best.

Being Certainly Profitable in Wholesale Real Estate Investing

By following the tips we’ve outlined in this article, you can ensure that your business is as resilient as possible to market fluctuations. So whether you’re a seasoned investor or just starting, remember to increase your lead conversion rate, get your finances in order, know your numbers, and have a plan B.

With these strategies, you’ll weather any storm and continue making money by wholesaling.

Do you need more help? Then, get a membership, subscribe to our newsletter, and join our upcoming meeting! We’ll discuss key industry trends and expert tips—you wouldn’t want to miss out.

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Wholesale Wholesaling

What Happens After Getting A Property Under a Wholesale Contract?

Source: Photo by Gabrielle Henderson on Unsplash

Real estate wholesaling is all about finding bargain-priced properties, getting them under contract and reselling them to investors or other interested buyers.

The main difference between a regular purchase contract and a wholesale contract, is that the wholesale contract allows the wholesaler to sell the contract to another buyer before actually owning the property. Theoretically, this allows the wholesaler to have little to no money to wholesale properties.

But what happens after you get a wholesaling contract signed? You still have a few steps to go before getting paid, so let’s go through them.

1. Send the Contract to the Title

You’ll need to send that contract to your title company to keep them in the loop. If you don’t know any companies, just search for one online and ask them to see if they work with wholesale investors like you to handle assignments.

Once you find the ideal title company, email the contract to them along with the seller’s contact details to collect any additional information they need. Next, you’ll have to coordinate with the title company to get your earnest money to them—often around $100 or more, depending on how good the wholesaling deal is—via mail, drop off, or courier delivery.

2. Take Photos and Videos of the Property

Next, you’re going to reach out to the seller and schedule a day for you to document the home. This task is often done when you meet the seller at the property to negotiate and sign the contract.

If the seller is hestiatent, assure them that you’re only doing so to have records of the property and so you can show the home to prospective buyers.

You have to take photos of every room, the front of the house from the streets, the backyard, the kitchen, the bathrooms, the HVAC unit, the electrical box, and even the roof if you can raise the camera high enough. The more photos you have, the more information you can provide your buyers.

Also, tell the seller that you’ll return with a contractor, so you can get a bid right away to start construction and renovations on the day you close immediately—time is money in the real estate game.

3. Send the Deal Out and Find Buyers

Now that you have the contract and photos, send the deal out to find cash buyers.

You can email blast with the likes of MailChimp, or manually go through your buyers’ list to find potential individuals for the specific property. You can also reach out to other wholesalers to see if they have any buyers that might be interested or go through real estate Facebook groups to find more prospects.

As you find buyers, ensure that you provide them with the asking price, after repair value (ARV), estimated repair cost (ERC), lot and living square footage, link to photos and videos, and a way to submit their offer. Once buyers start reaching out, proceed to vet your buyers.

4. Vet the Buyer and Walk Them Through the Property

You must ensure that buyers are legit and won’t waste your time. You can ask for the last three or five properties they’ve flipped. Ask for the addresses, look at the tax records, and check if their name or their LLC was on that property. That way, you know that they flip properties.

Then, get the buyer to sign and send the assignment to the title company. Ensure that the buyer will also deposit $500 (or any other amount) in earnest money.

We suggest you collect the earnest money before they check out the property so you have some leverage in the deal and lessen the chances of them backing out. However, this isn’t always possible and may only work if the buyer already trusts you as a wholesaler.

Once that’s done, you’ll have a buyer locked into the deal. Of course, you’ll need to ensure that they have the funds to purchase. So we recommend that you get in touch with fellow wholesalers, check their backgrounds, and directly ask them to know their situation.

5. Wait for the Deal to Close

Here comes the easy part: Waiting for the deal to close.

Stay in touch with both the seller, the buyer, and the title company to assure all parties that everything is going smoothly. If anybody needs anything, you’ll also be able to get them the information right away. You’ll also have to connect the buyer to the title company so they can set up the closing process.

Now, if the buyer ghosts you and becomes unresponsive (or takes too long to deposit the money),  then you’ve got a problem. We suggest that you move on and find a new buyer, because they might waste your time and give you the runaround, killing time and the deal in the process. You only have a certain amount of time to get the property sold—exit before it’s too late.

Keep Moving Forward, Keep Closing Deals

Ultimately, your goal as a real estate wholesaler is to find a property, vet the buyer, and sell the deal. The process we’ve outlined should give you a good idea of how to go about doing that.

Of course, there will be bumps in the road. But if you have a solid system in place, you’ll overcome them easily. Also keep in mind that this is a fast paced business, so it’s important to always be moving forward.

Don’t hesitate to join as a REIA member today! We have regular meetings and newsletter publications to give you all the help you need to become a successful real estate wholesaler today.

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Wholesale Wholesaling

How Much Should Real Estate Wholesalers Offer on a House?

Source: Photo by Medienstürmer on Unsplash

As a real estate wholesaler, you always look for the best deals to offer your clients. But how do you know how much to offer on a wholesaling agreement? And what factors should you take into account when negotiating with the motivated seller before they lose interest?

Let’s discuss what you should consider when deciding how much to offer on a property.

Cost Considerations for Real Estate Wholesalers

In general, wholesale real estate investors should aim to offer around 50-70% of the property’s “After Repair Value” (ARV). By doing so, you leave room for them to make a decent profit after necessary repairs and improvements.

However, you also have to consider:

  • The market conditions in your area
  • The condition of the property
  • Your own investment goals and objectives

The costs of repairs and improvements can vary widely depending on the scope of work required. In some cases, getting away with a lower offer may be possible if you are confident that you can complete the repairs yourself at a low cost. Conversely, if the property requires significant work, you may need to increase your offer accordingly.

Ultimately, the amount you offer on a property will come down to your risk tolerance and goals.

For example, if you’re looking to make a quick profit, you may need to offer less than 50% of the ARV. However, if you’re willing to take on more risk (and potentially hold the property for a more extended period), you can offer a bit less. It’s up to you to decide what works best for your business.

4 Tips on Wholesale Real Estate Investing

To wholesale a house, you need to find a property worth more than what you offer to pay for it. Here are 4 tips to go about wholesale real estate investing:

  1. Do your research. As we mentioned, it’s essential to know the local market conditions and the estimated ARV of the property before making an offer. This will give you a good starting point for negotiation with the motivated seller.
  2. Don’t get emotionally attached. It can be easy to get emotionally attached to a property, especially if it’s your first deal. However, it’s important to remember that this is a business transaction and you should approach it as such.
  3. Know your numbers. To make a smart offer, you must know your numbers. Have a clear understanding of the estimated costs of repairs and improvements, as well as your expected return on investment (ROI). Once you have all of this information, you can start to play around with different offer prices until you find one that makes sense for your business.
  4. Be prepared to walk away. If the sellers are not willing to budge on price, be prepared to walk away from the deal. There’s no point in overpaying for a property, even if it started as a potential opportunity to reap great returns.

Making an offer on a house can be a tricky business, but if you follow these tips, you should be able to negotiate a fair price that works for both parties involved.

Offer the Right Price for the Right Real Estate Wholesaling Business

When wholesaling a house, it’s key to find the balance between offering too much and not enough. You want to make sure that you are making a profit on the property, but you also don’t want to scare off potential sellers with an unreasonably high offer. By doing your research and understanding the market conditions in your area, you should be able to come up with a fair offer that leaves everyone happy.

Become a REIA member today! Join our upcoming meeting and sign up to our newsletter to stay ahead of the real estate wholesaling game in your area. Equip yourself with the knowledge that’ll bring you to wholesaling success—one property at a time.

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Wholesale

How to Get Your First Wholesale Deal in 30 Days

Man handing keys and a toy home to another person
Source: Fortune Builders

Are you interested in real estate wholesaling? Great!

But are you ready to start now?

Many would-be real estate wholesalers are afraid of the risks that this industry is notorious for. After all, who would want to pour their time, money, and effort into a project that’ll take months or even years to see returns?

Well, you’ve come to the right place because, in this article, we’ll walk you through the whole process of how to get your first wholesale deal in just 30 days. From finding the property to negotiating its price and closing the sale, we’ll give you the exact steps you need to take so you don’t waste any time committing rookie mistakes.

Ready? Let’s dive in!

1. Find a Property: 8 Days

The first step to landing a wholesale deal is to find a property you can acquire at a discount. This stage of the process will usually mean finding distressed properties that have motivated sellers, which you can easily find via the following techniques:

  • “Driving for dollars” or going around your area to spot vacant and abandoned properties
  • Checking tax lien or foreclosure records to find homeowners that are desperate to sell
  • Placing bandit signs in high-traffic areas that contain a short message and your contact details
  • Direct mailing or sending out postcards and flyers to potential sellers
  • Leveraging your network by joining real estate investment clubs and associations
  • Checking expired listings for properties that weren’t sold by the date specified in the contract 

Finding distressed properties and motivated sellers will take some time but don’t let this challenge stop you from trying to succeed in this industry. Keep in mind that real estate wholesaling is all about generating leads––the better and faster you get at doing so, the more you’ll become successful.

2. Negotiate for the Right Price: 5 Days

Once you’ve found potential properties, negotiate with the seller to determine a good price.

As a real estate wholesaler, the money you make will depend on how well you negotiate. Moreover, you can’t be too selfish while negotiating. Instead, you have to create and reframe the situation for the seller to see the benefits of agreeing to a lower price.

Your goal is to find the sweet spot price that’s low enough for the seller to approve, but high enough for you to generate a hefty fee without struggling to find a buyer.

If you aren’t confident in your negotiation skills, consider taking a seminar, reading books on the subject, or working with a trusted friend who has experience in real estate wholesaling.

Pro tip: Pay close attention to your tone of voice, body language, and behavior throughout the entire transaction, as it’ll indirectly affect the property’s selling and a purchase price as well—tampering with your potential profit. 

3. Find Buyers for Your Property: 10 Days

Once you’ve got a good price with the seller, it’s time to find potential buyers. Doing this may seem like an insurmountable challenge, but thanks to the Internet, it’s now easier than ever. Here are a few tips:

  • Create a website: Showcase your past work and customer testimonials so it’s easy to get new sellers and buyers to trust you. You can create simple websites with WiX or WordPress, or get in touch with a web developer friend to help you out.
  • Scan forums and social media: Online forums, wholesaling Facebook groups, and social media platforms are also rich sources of potential buyers. So join groups dedicated to helping people find their next home, and establish your trustworthiness and expertise as a real estate wholesaler there.
  • Work with agents: Ideally, you want cash buyers that wouldn’t need a loan to purchase a home, so the transaction is quicker and easier for you. The best way to find them is by working with real estate agents, as they’ll usually have a list of financially capable buyers.
  • Cold calling: In the real estate industry, cold calling is one of the most effective ways to find potential buyers. Reach out to your current connections and find out if they know someone on the market for a new property. Then, give those prospects a call to explain your deal.
  • Put up bandit signs: Another popular method of lead generation, bandit signs are poster-sized signs that contain an attention-grabbing message and your contact details. For a better shot at success, place them in high-traffic areas, like shopping malls and busy streets.

As challenging as this stage may be, know that there are many tried-and-tested strategies that will help you out. By leveraging your existing network and being creative with your methods, you’ll have a list of potential buyers in no time at all.

4. Close the Deal: 7 Days

After receiving confirmation from your buyer, you can now officially start closing the deal. Now, real estate wholesaling relies on short-term funding and compressed timelines, which means you’ll have to pay close attention to every part of this process to make sure that nothing goes wrong.

There are two types of contracts in real estate wholesaling. The type of contract you choose should largely depend on your risk tolerance and how fast you want to close the deal:

  • Assignment Contracts: Find a buyer and sell them the contract without buying the property yourself, so you won’t have to put down any of your own money. This entire process can take as long as a week to complete.
  • Double Close Contracts: Buying the property and immediately selling it off to a buyer will give you bigger profits as the two parties won’t know what you bought and sold the property for. This process usually takes longer and can even last a few weeks.

Each type of contract has its own set of advantages and disadvantages so evaluate your situation before picking which one to go with. For instance, assignment contracts may be simpler and quicker but they also mean that both parties will know how much you’re making on the deal, which doesn’t give you a lot of negotiating power.

On the other hand, double-close contracts may mean more anonymity and privacy, in terms of the profits you’ll potentially walk away with. However, the process takes longer, is more complicated, and involves financial risks. With this type of contract, you’ll have to pay closing costs two different times—-when you buy the property and when you sell it off.

There isn’t a right or wrong type of contract to execute. Rather, the best option will depend on your risk appetite, financial assets, and how much you ultimately want to earn on the sale.

One Month Richer with Real Estate Wholesaling

Real estate wholesaling relies on short-term funding and compressed timelines, which means you’ll have to pay close attention to every part of this process so nothing takes too long. Ultimately, your goal is to have strong negotiation skills and the determination to find people looking to purchase the property.

If you can do these things fast and effectively, you’ll be reaping significant wholesaling profits within 30 days—we guarantee!

If you want more tips on navigating the world of real estate wholesaling, subscribe to our email newsletter. You can also check out our website, where you’ll find the date of our next meeting and an application form to become a member of REIA.

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Wholesale Wholesaling

Real Estate Wholesaling: How to Assure Sellers and Buyers That You’re Not a Scam

For sale properties on the west side of Detroit
Source: Crain’s Detroit Business

If you’re a real estate wholesaler, then you’re already aware that your success depends on the trust you build with potential sellers and buyers. Unfortunately, many scammers try to take advantage of people by misrepresenting their intentions or promising impossibly high profits.

As they’re on the way to the bank, the unfortunate wholesaler must deal with the fallout, which frequently involves unhappy clients and a ruined reputation. Nevertheless, there are things you can do to gain their trust, seal deals, and earn wholesale profits.

Here are 3 few things you can do to assure sellers and buyers that you’re a legitimate real estate wholesaler with their best interests at heart.

1. Know the common types of real estate scams.

Apart from posing as agents or homebuyers, some con artists go the extra mile by pretending to be home inspectors, lenders, or landlords. To protect your customers from fraud, familiarize yourself with common real estate wholesaling scams.

Besides protecting yourself and the people you’re working with, in-depth knowledge of common scams shows that you really know the ins-and-outs of the industry. Without a doubt, this will help build your reputation, where buyers and sellers will feel more confident partnering with an expert.

The Foreign Buyer Scam

In this real estate scam, the seller will usually receive an email from someone claiming to be a prospective buyer living abroad. Then they’ll say that they’re planning to move to the United States.

They’ll send a check for the down payment only to say that they accidentally paid too much and ask the seller to wire back the difference. Only later will the seller realize that the check is fake—they’ve received no money. By that time, the buyer will have vanished along with the cash that was “returned” to them.

The “Bait and Switch” Scam

This scam occurs when a prospective buyer makes an offer that’s above the property’s market value, its sale price, or both. The seller then excitedly accepts the deal, only to learn that the buyer isn’t signing the contract yet because of “delays”.

They eventually come back; although, this time with a much lower price and a list of demands. Unfortunately, the seller will have paid thousands in ongoing taxes, insurance, and utility bills by this time, and feel they have to honor the sale regardless.   

The Duplicated Listing Scam

Scouring through websites like Craigslist may lead you to great properties with incredibly low prices—but be warned! Some scammers copy legitimate rental listings and re-publish them with altered contact details and price tags. Unfortunately, some innocent buyers are so excited to grab the deal that they immediately wire a down payment to secure the purchase.

Needless to say, the scammer disappears upon receiving the payment, leaving the poor buyer with thousands of dollars lost and no property to show for it. They can try approaching the authorities for help but sadly, they often never get their money back.

2. Cultivate a robust online presence.

On the flip side, you want to show buyers that you’re not like the scammers we listed already. So, as a seller, you should establish a strong online presence is to convince buyers that you’re legitimate. After all, real estate scammers use fake names and likely won’t be as active on social media platforms.

Here are two ways to have an online presence:

  • Social Media: Create social media profiles on popular platforms like Facebook, Instagram, Twitter, and more to help prove your credibility and trustworthiness.
  • Website: Go the extra mile and build a website. Other than giving you a platform to display the properties you’re currently holding, you’ll also have a place to show past client testimonials, success stories, and positive reviews.

The more you cultivate your online presence, the more you can establish a strong brand and reputation. You also look more professional and differentiate yourself from scam websites that are often unorganized and hard to understand.

3. Avoid dominating the conversation.

As a real estate wholesaler, you’re probably aiming to grab all the opportunities you come across. There’s nothing wrong with this goal, but being too fixated on it could lead to being pushy or too eager when talking with buyers and sellers.

Instead, when speaking with buyers and sellers, stick to the basic facts—who you are, the name of your business, and how exactly you can help them. It’s completely alright to dig deeper and discuss their current situation and the property in more detail, but the key is to let them lead the conversation.

Constantly interrupting or talking over them will make you appear unprofessional and untrustworthy.

Build Trust, Land Sales, Earn Fortunes

Given how valuable an asset property is, buyers and sellers alike will only work with someone they trust. Therefore, if you want to land wholesale deals, you must focus on strengthening your brand and credibility. Only then will you find success in the real estate industry—one that’s largely built on trust.

Struggling to build trust with sellers and buyers? Our team of experts at Logical Property Management is ready to help!

We’ve been serving the Metro Detroit real estate market for more than two decades now and have everything you need to succeed in the area. We can help you with anything, from building an online presence to keeping track of your buyers and sellers.

Categories
Wholesaling

Where to Find the Best Real Estate Wholesaling Deals

Like plenty of new investors, you may have decided to try out real estate wholesaling.

Using this investment method, the turnaround period is short, and you don’t need a lot of money (if any) to start—this is why a lot of first-time investors gravitate towards wholesaling.

However, to be successful at it, you do need to find the best properties for wholesaling. After all, not all deals have an equal potential for giving you the returns you desire. You’ll need to source houses significantly (ideally around 50%) under market value, and for that, you’ll also need to be dealing with motivated sellers. 

Finding these kinds of properties isn’t easy – that’s why not everyone and their mother is out there working as a successful wholesale. But to get you started, here’s a guide to help you source profitable wholesaling deals.

Offline Methods

There are two main kinds of wholesale deal sources: offline and online. Though many will consider online methods to be more efficient—especially in today’s digitally driven world—offline techniques also have their benefits.

Those who were successful at real estate wholesaling started their careers with these old-fashioned methods. Though these methods often require more time and resources to set up, you have a good chance of sealing your first deal with the help of these proven techniques:

Driving for Dollars

Before the internet, driving for dollars was one of the most popular ways to hunt for wholesale leads. If you’re tight on budget, this old-fashioned way can still work wonders.

You simply hop into your car and drive through target neighborhoods (i.e. places where buyers actually want to live or invest), looking for properties that show signs of neglect. Some signs to look for are the following:

  • Abandonment or vacancy
  • Overgrown lawn and plants
  • Boarded-up windows
  • Visible damages
  • Uncollected trash

Once you spot a potential property, use public records to find the name of the registered owner, and contact them to make an offer. Often, an unused property could be more of a burden to the owner than a boon – like the unwanted home of a deceased relative, for example – and they’ll be fairly motivated to consider letting someone take it off their hands.

Bandit Signs

Bandit signs are another low-cost and effective way to find deals in your local housing market. Often spotted on random street corners or busy traffic areas, these signs say things like “We Buy Houses” or “Sell Your House for Cash”. Place them in the neighborhoods you want to target for your real estate wholesaling deals.

However, before you start putting up your own, just make sure that these signs aren’t illegal in your area!

Direct Mail Campaigns

This involves sending out postcards or letters to potential sellers, expressing your interest in buying their property. Direct mail campaigns can be effective, though they’re a bit pricier and slower to generate leads than their equivalent online methods.

You’ll need to secure mailing lists and be persistent with getting a response. To increase your success rate, only target owners of pre-foreclosure properties, high equity or delinquent mortgages, probates, and other types of motivated sellers.

Networking

Joining local real estate investment clubs is a great way to find deals. There may be sellers that just haven’t listed their properties yet, which a network of agents, investors, and attorneys can inform you about. Making connections in the industry will also grow your buyers’ list, increasing your chances of closing deals on both ends.

Newspapers

Old-fashioned newspaper advertising can help you reach sellers who aren’t online. After all, 10% of all Americans aren’t online—equating to nearly 33 million Americans!

To avoid missing an opportunity for a real estate wholesaling deal, you can reach more people by posting “I Buy Houses!” ads in local newspapers.

Online methods

Online methods are often more convenient and faster at producing results, though they may not always be as effective as offline methods—and there’s plenty of competition online that you have to contend with, too! Nevertheless, you can still discover a lot of good deals online that you wouldn’t find otherwise.

Here’s how:

Wholesaling Website

Creating a website allows you to target a larger customer audience. With a single click, you can reach thousands more people—a lot more than you can reach with local signages.

Your website should sell yourself as a willing and capable real estate wholesaler, convincing people to trust you with their property. You should optimize your website with SEO, PPC advertising, and social media marketing (as well as retargeting ads) to generate leads and seal more deals.

Expired MLS listings

Expired MLS (Multiple Listing Service) listings are properties that weren’t sold by the date specified in the listing contract between the seller and the listing agent. There aren’t a lot of properties that get this far, but a real estate agent or broker should be able to help you find these deals.

To do this, focus on a particular city or neighborhood, check the properties within, and get in touch with the owners of the expired listings to show your interest in their property. Usually, they’re pretty motivated to sell, since the property has already sat on the market for a long time with no buyers coming forward.

Online Forum and Auction Sites

Craigslist, Hubzu, ForSaleByOwner, and Auction.com are places where people often post to sell quickly. This makes them potential gold mines for real estate investors, and wholesalers in particular. If you move faster than your competition, you can snag some great deals from these websites.

Final Thoughts

For you to be successful in real estate wholesaling, you have to make numerous offers to seal enough deals—both online and offline.

Once you find a motivated seller with a distressed property, make sure to move fast to get them under contract. Then, follow through with assigning the rights to your buyer and collecting your fee, before beginning your search anew!

Any other sources we’ve missed? Which one’s your go-to strategy to find deals?

Image Courtesy of PhotoMIX

Categories
Wholesaling

How To Market Wholesale Deals.

How to market deals without large adcertising budgets?

The two most important skills that real estate wholesalers can have are sourcing great deals on properties for sale and finding solid buyers for their purchase contracts. In order to maximize the number of potential buyers you reach, it’s therefore crucial to know how to advertise contracts for sale in an efficient way (without running into any legal issues).

Wholesaling itself is legal, but keep in mind when marketing your deals that selling someone else’s property without a license is not permitted in many states. You should always make it clear in all marketing materials that you are selling a purchase contract, not the home itself, otherwise you could run into legal issues. If you’re unsure, talk to a specialist real estate lawyer to make sure you are doing everything above-board.

With that in mind, here are some of the best ways to market wholesale deals to potential buyers without the need for a large advertizsing budget:

Networking Events

One of the best tools a wholesaler can have is a great network of potential sellers and buyers. When you have an extensive network, you open up greater possibilities for word-of-mouth advertizsing. Up to 50% of word-of-mouth referrals lead to a successful sale, which makes it the most powerful kind of marketing, and what’s more, it costs basically nothing.

Going to local networking events is a great way to meet people in your area who could one day become your customers, or help bring you potential leads. You can find networking events taking place in your city on Eventbrite.com or Meetup.com.

You could also consider joining industry-specific groups, like your local REIA, or a business club, such as Business Network International (BNI). Alternatively, there are also one-off real estate industry events which you could attend to find buyers and sellers in your area.

Linkedin

Linkedin has become an essential online marketing tool for sourcing leads and generating sales across a variety of industries. Its free version allows you to filter searches based on a person’s type of job, position, location, company size, and more, meaning you can target your marketing messages at potential buyers in your area.

Linkedin allows you to send a connection request with a message to those who fit your target customer profile. If you don’t have enough time to sift through hundreds of professional profiles and contact them individually, don’t worry – there are many tools, such as Scrab.in, which you can use to automate your marketing efforts through Linkedin.

Cold calls

You may think cold calling sounds fairly last century, but the truth is that cold calls are still an effective marketing technique – although less effective than referrals, cold calls still have a 2% successful closing rate.

If you’re nervous about the idea of calling up strangers, there are tools you can use to send potential customers a ringless voicemail instead, meaning you won’t have to speak to leads one-on-one until they call you back and express interest in the property. You can find contact details for your target market by using paid tools, like Skip Trace Lists.

Social Media

Social media is one of the best options for marketing wholesale deals, because it provides a huge potential reach and requires less time and effort than other forms of advertizsing. You can upload a description of the deal and pictures of the house to attract buyers, while also helping you build visibility for your company or personal brand. Having a dedicated Facebook, Instagram or other social media page to promote your wholesale deals will also make you easier to find for buyers searching for homes in your area.

In wholesale deals, communication is key when dealing with both the seller and the buyer, so always communicate clearly and honestly about the fact that you intend to market the property deal. When advertizsing deals, you should disclose the current state of the property, and provide an estimate on any necessary renovation costs, as well as the estimated property value after repairs.

Image Courtesy of Martine Savard

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