To be a successful wholesaler you need to master the art of finding motivated sellers and getting properties under contract. Then you need to know how to find quality buyers who you can assign these deals to.
When it comes to the part about finding motivated sellers I highly recommend a combination of letters, postcards, craigslist ads, networking and bandit signs. You need to be doing all of these things at the same time and you need to do them without fail, month after month after month.
A solid marketing plan would be to send out 2,000 letters a month, put up 200 bandit signs, email 5 landlords on craigslist every single day and attend at least one networking event per week. If you did all of these things consistently you should not have any problem finding plenty of motivated sellers.
But once you find these motivated sellers and have gotten a solid deal under contract, you’re only half way there. Now you need to find a buyer to assign the deal to so that you can get paid. And in today’s economy finding buyers is a lot more difficult than it was five years ago.
Heck, five years ago banks would lend anyone money and finding buyers was like shooting fish in a barrel. But now you need to thoroughly screen your buyers and make sure that they not only talk the talk, but that they also walk the walk.
It doesn’t matter if this person has attended your REIA meetings for the last three years…
It doesn’t matter if other people vouch for them, all that matters is if they have the money to close the deal. That’s why my favorite way to screen buyers and to save myself a lot of time from dealing with “tire kickers” is to have every rehabber/buyer fax me a proof of funds letter before anything else takes place.
In other words, after I have shown them all of the numbers on the deal, before they get to see the property or doing anything else I must see that proof of funds letter. If they tell me that they’re good for the money or that they’ll have the money in a week or any other excuse comes out of their month then I don’t waste my time on them anymore and I tell them they can see more of the deal once I get the proof of funds.
If you follow this same plan that I do, I promise you it will save a lot of headaches on your part and a lot of wasted time driving to properties. I know you want to find buyers for your property badly, but the person who keeps telling you the money is going to come is likely lying, but you already know that.
So from now on, if you want to be a successful and productive wholesaler make the proof of funds letter the first thing you see before assigning a deal.