Building the Ultimate Wholesale Buyer's List
|A great fear that people who are venturing into the Wholesaling business have is whether or not they are going to be able to sell the homes that they put under contract. "Find the Deals and the Money will Come" is a popular phrase amongst investors. But when you have never done a wholesale deal, it is a very difficult phrase to grasp and to put faith into. Consequently some Wholesalers refuse to get started until they have the buyers and the money lined up. Then they want to know how to put together a wholesale buyers list without anything to sell.|
The first thing a Wholesaler should consider when building a Buyers List is how he or she is going to get a wide array of buyers. By this I mean, you want to have low-end property landlords, high-end property landlords, multi unit buyers, contractor/rehabbers, newbies, seasoned cash buyers etc… You should have someone lined up for every scenario of property. It does not do you any good to have a list of seasoned cash buyers who all like high end rehabs if you are not able to locate properties that suit their criteria. What are you going to do with all of the other opportunities that you find?
How do you put your list together? Start out by running ads in the local classifieds. I started out by running ads such as the following:
Fixer Uppers- Deep Discounts- Financing Available XXX-555-1214.
An ad like this will get the phone ringing. Then talk to the investors who called about their experiences, where they like to invest, how they pay for their homes, what their exit plans are, and so on. I always want to know the investor I am dealing with. I did not want to talk about property because I had nothing to offer. When our discussion finished, I told them that I did not have anything available for them at the moment, but I would call them when I found something that suited their needs.
As I built up my buyers list, I had a potential buyer for every property that I put under contract. I never bought in the war zones when I first started Wholesaling; I did not know to whom I would sell them. However, once I found a few buyers who were experienced in the war zones and who were interested in buying more if I found the right deal, I started making offers on war zone properties as I learned about them. NOTE: I did so, only because I had buyers lined up to take them from me.
"Bread and butter" properties are never a problem to move if you get a good deal. A majority of your buyers will be interested in most of the properties that you find in these neighborhoods. They are typically very easy to sell.
YOU DON'T NEED ALL CASH BUYERS!
By locating hard-money lenders in your area, you can turn newbies and contractors into your best buyers. Bring the deals that need a lot of work to a contractor, get them the loan to do the deal, and they will keep coming back. Show newbies how to get their first deal done, line them up with the property and the money, and most likely you will have earned a customer for life.
I talk about Contractors and Newbies as your best buyers simply because this is where I have had my most success. A hard-money lender, a good deal, and a newbie that needs your guidance is a payday just waiting for you to put it together.
Another very successful method that I have used to find buyers is to call "for sale" ads; particularly ads that say "newly renovated". In most cases this will be an investor who has just purchased a home and fixed it up. I call the ad and ask the seller if he or she is an investor. If so, I begin the same rapport as if he or she called on one of my ads. The fact that he or she has a home that is newly renovated, lets you know that you have a real buyer to ad to your list for the area that he or she is selling in.
I frequently teach my students that they can learn more from the "for sale" ads then they can anywhere else. If you study the ads and get to know the players in your area, then you can see the trends and the areas they invest in. If you investigate further you can find out what they pay for homes and what they sell them for.
There are buyers everywhere, in every market. You just need to dig them up, and with a little effort you can have The Ultimate Wholesale Buyers List.
|Since 1998 Steve Cook has flipped many hundreds of houses as an active Baltimore-area real estate investor. Steve's unique specialty is the "flipping homes 1-2 punch", a proven system of real estate investing that powerfully combines wholesaling and rehabbing houses. Steve Cook is dedicated to helping others succeed through understanding and aggressively applying his time-tested, step-by-step approach to flipping real estate. |
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