The real estate investing business may be full of opportunities, but unless you’re able to build your network, and gain access to deals, it doesn’t matter what exit strategy you choose…you won’t have success. And this is especially true when boosting your ability for finding wholesale deals.
Of course, some wholesale deals are better than others. And learning how to start wholesaling real estate — and developing a wholesale buyers list — can be vital to your success. But what are the wholesale real estate basics to guide you? Which real estate wholesale marketing strategies work best..and which should you avoid?
Here are five keys to finding wholesale deals and building a foundation for your career.
Keys to Finding Wholesale Deals
1.Scouring Your Network
The first part of working on wholesale deals is finding them. If you spend any time at real estate investing events or local networking meetings you should be able to find multiple wholesalers you can work with.
Wholesalers are only as good as the network they build, and they’ll want to work with you just as much as you may want to work with them. It will take time to develop a relationship and a feel for what each side has to offer, but it all starts with networking. If you rely on just one person for wholesale deals, you may not see a new deal for months. The more wholesale deals you have access to, the greater the chance you will find one to move forward with.
2. Do Your Homework
It is the job of a wholesaler to present their property in the best possible light. They’ll often make a property appear to be the deal of the century. Regardless of how nice it may appear, you need to mind your own due diligence. This means spending time, or money, to find out as much as you can about a property.
You need to fact-check the tax amount, repair estimates, estimated after repair value and everything else associated with a deal. If you are buying with the assumption of one value in mind, and it turns out that this number was off, you could be scrambling just to break even on a deal. You also need to look at the title to see if there are any liens and encumbrances. The wholesaler is getting a good deal and passing that along to you. In most cases, there is a reason for this. And if you do not find this information, you are asking for trouble.
3. Move Quickly
If you find a deal you like, you need to be prepared to act quickly on it. This means having funds and documents in place to make your offer. In most cases, you may be competing with other investors. Remember: those who can act quickest will often get the deal.
This doesn’t mean you should cut corners, but after you make a determination on a property you need to act. If you have to wait a few days or longer to get around to making an offer, the deal will probably not be there.
Whether it is a proof of funds letter, transferring money or getting your attorney in place, these tasks should all be done as soon as you are ready to act. If you show that you are serious, you will probably be put on the top of any wholesalers list and, in turn, get access to more deals.
4. Focus on the Personal
You can get emails from a wholesaler for months without finding a deal that may be a good fit, but all it takes is one to build a relationship. It is important to stay in contact with everyone that has deals for you. A simple return email or a list of what you are looking for in a property can get the ball rolling.
If you are ambitious enough, you can sit down for a cup of coffee or lunch to reinforce what you’re looking to do. If you quickly delete emails without looking at them, you’re missing a golden opportunity to find new deals. Not every deal will work, but you need to constantly grow each relationship and do the little things.
5. Follow Up
After you close a deal, it’s important to send a follow up email or message thanking the wholesaler for the opportunity. It can be hectic after you get a new property and you may spend weeks working on a rehab, but you need to show appreciation.
Before you get caught up with the next deal, you need to take a step back to consider how you got the last one. Regardless of whether the deal was a home run or not, it’s still a deal you probably made money on.
Sure, the wholesaler made money too, but if you reach out to them after you close they will consider you in the future. If you can slowly build trust and a solid relationship, you may get the first crack at future deals they have. Something as small as making a phone call can help do the trick.
Playing the Numbers
The more lead sources and access to deals you have, the more deals you can close. You may not get all your deals from wholesalers, but the ones you do can be very profitable — and this makes finding wholesale deals a whole lot more fun.
The key is to utilize your network, get good at building relationships, and do your best to focus on the big-picture, not the short-term.