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Finding Wholesale Properties: 5 Ways To Search For Leads

Wholesale real estate investing, or “wholesaling” as it’s often called, is a fantastic way to jumpstart a budding residential redevelopment career. With its reduced financial risk and time commitment — you’re essentially collecting a finder’s fee for locating wholesale properties — this specialized strategy can give you a great primer on the ins-and-outs of real estate investing (all while possibly earning you some money in the process).

The trick, as any wholesale property investor will tell you, is finding those “magical” wholesale leads — the under-valued properties that you, as a wholesale investor, can package and turn over to a real estate investor who intends to rehab the property. And though finding wholesale properties through traditional means, such as the MLS (multiple listing service), can be an effective strategy, savvy wholesale investors know they may have to turn over a few non-traditional rocks to find the ideal property they’re looking for.

So, here are five sources (both traditional and non-traditional) for finding those juicy wholesale leads and boosting your wholesale investing IQ in no time.

How to Find Those (Hard-to-Find) Wholesale Properties

Wholesale leads

“To List or Not to List…That is the Question”

Before we jump into the sources for finding wholesale properties, it’s important we define two terms we’ll use throughout this column: listed properties and unlisted properties.

Listed Properties: These are properties listed on the MLS, and they usually come in one of three forms: Properties owned by private sellers, properties in pre-foreclosure and REO properties (bank-owned). Listed wholesale properties tend to be the easiest to find, but are often the most competitive to secure (and usually provide less profit potential than unlisted properties).

Unlisted Properties: These are just what they sound like, wholesale properties in which the seller has not listed the property on the MLS. These often represent the biggest profit potential of the many forms of wholesale properties, but require additional effort, and expense, to locate.

Now that you know a little bit about listed vs. unlisted wholesale properties, let’s jump into the following sources of leads you should account for in your search:

Private Sellers (MLS)

These are properties owned by sellers who have signed a listing agreement with a real estate agent. Though these are often the easiest (and most profitable) forms of listed wholesale properties you can find, it’s imperative you sift through plenty of listings to find the right property for your investing needs.

Your goal is to find undervalued, or “distressed” properties on the MLS. Not every listing on the MLS is distressed, or even a bargain. Be aware because these properties have a real estate agent attached, the actual wholesaling process can be challenging and may require more hoops to jump through than you might expect.

But with the right property, and a motivated seller, private sellers on the MLS can still be a good source of wholesale leads.

Pre-Foreclosure (MLS)

This is another form of listed wholesale properties. But unlike a private seller property, pre-foreclosures (or short sale) properties require the approval of the bank to complete the transaction.

And though one might think the bank would be sufficiently motivated to complete the sale, this isn’t always the case. In fact, many banks restrict buyers from reselling or assigning a short sale property within a specified period of time (usually longer than any real estate investor would be interested in).

It’s imperative, as a wholesale investor, you do your due diligence to examine a particular bank’s short sale contractual language to ensure wholesaling is an option. On that note, the importance of understanding a real estate wholesale contract are imperative. The many hurdles involved in a pre-foreclosure wholesaling deal can deter would-be competitors, and provide a relatively new investor access to wholesale leads they wouldn’t otherwise have.

Direct Mail (Unlisted)

Now we turn to unlisted wholesale properties. And one of the best ways to find these unlisted diamonds in the rough is through direct mail — which includes postcards, self-mailers (or brochures), letters and even catalogs.

Though the initial start-up cost of direct mail can be high — even with simple postcards — the possible lead-generation benefit can be staggeringly high. With direct mail you can target lists that include:

  • Properties in probate
  • Absentee owners
  • Owners in pre-foreclosure

Direct mail is a powerful tool, precisely because it allows you to “plant the seed” of a home sale long before a prospective seller has considered it.

Outdoor Signage (Unlisted)

Postcards and flyers in the mailbox aren’t the only way to find unlisted wholesale properties. Outdoor signage methods — such as banners, billboards, and vehicle magnets — can be a fantastic (and relatively inexpensive) method for finding untapped wholesale deals.

Which particular method of outdoor signage you find most effective will vary by neighborhood; one of the easiest (and most effective) strategies is to use signage at a property you or your partner are already rehabbing. But with a bit of trial and error — and a few extra miles on the odometer — you might just find a fruitful source of wholesale leads, just steps away from your front door.

Pay-Per-Click Advertising (Unlisted)

Pay-per-click advertising isn’t quite the gold rush it used to be; the days of one-cent clicks on Google have long faded into the sunset. But that doesn’t mean that online advertising platforms such as Google, Facebook, YouTube and even Pinterest aren’t still a great source of wholesale leads.

Each online platform has their own pros and cons. Google and YouTube are great at targeting “searchers,” people who are typing in specific phrases — such as “how to short sale” — and serving them ads that may help them be added to your marketing funnel. While Facebook has cornered the market on demographic data, letting you target very specific, targeted to ads to quality prospects in your local area.

The Final Word on Finding Wholesale Properties

The key to wholesaling success is to realize it’s a marketing funnel. And like any other business the key is to fill the top of the funnel with enough qualified and interested leads, in the hopes that a few of those leads will mature into completed transactions.

Not every strategy to find wholesale properties will be fool-proof or reap instant benefits. But if you stick with it, and vary up your methods to acquire wholesale leads, you might just find you’re better at wholesale investing than you ever imagined.

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