Looking for a way to get into real estate investing but don’t have the money to buy a property?
Or maybe you’re looking for a way to get started without any risk? Wholesaling might be the answer for you!
Want to know how to find wholesale properties? In this blog post, we’ll discuss what wholesaling is and how to find houses to wholesale. So let’s get started!
What is wholesaling and how does it work?
When people think of buying real estate in today’s market, they imagine purchasing a property and either living in it or renting it out.
However, there is another option for those looking to make money in the real estate market: wholesaling houses.
In a nutshell, wholesaling involves finding properties that are being sold below market value and then selling them to another buyer for a higher price.
This can be a lucrative way to make money, but it requires some knowledge of the real estate market and the ability to find wholesale deals.
How to Be Successful
To be successful at wholesaling, you need to be able to spot properties that are being sold for less than they are worth.
This often happens when the owner is facing foreclosure or needs to sell quickly for other reasons, normally using an alternative way to sell a house.
Once you have found a property that meets these criteria, you need to find a buyer who is willing to pay more than the asking price.
This can be done by marketing the property to potential investors or working with a real estate agent who has access to such buyers.
Tactic for Success
Have a clean modern website. Having a website not only makes you look professional it allows you to market it to clients 24/7. Having a short video explaining what you do and how they can benefit from working with you is a great way to set yourself apart from the competition. Make sure it’s mobile friendly as well!
If all goes well, you will be able to sell the property for a profit and move on to your next deal.
How to Get Started in Wholesaling
If you’re interested in getting started in wholesaling, the first step is to educate yourself and have a good understanding of the real estate market in your area.
Once you have a firm grasp on how the market works, you can start looking for properties to wholesale.
You will want to look for motivated sellers, high ARV properties and those with a lot of equity.
And don’t forget to network with other investors; they can be a great source of leads on potential deals and connect you with real estate developers making money in the industry.
Tactic for Success
Use a CRM to manage your leads. A CRM (customer relationship management) will help you stay organized and on top of your leads. You can use a CRM to track your leads, follow up with them, and close deals. There are many CRMs on the market, so choose one that fits your needs.
How to Assess a Property’s Potential
Wholesale properties are a great way to make money in real estate. But how do you know if a property has potential to be a successful wholesale deal? There are three key factors to look for:
Motivated sellers are typically willing to sell their property at a discount in order to unload it quickly.
This could be due to financial difficulties, an impending foreclosure, or simply wanting to get rid of the property as soon as possible.
Look for motivated sellers by searching for properties that have been on the market for a long time or are listed at a significantly lower price than comparable properties in the area.
High After Repair Value
High after repair value (ARV) means that the property will be worth a lot more after you fix it up than it is currently.
This gives you room to negotiate a low purchase price with the seller and still make a profit when you sell it.
To find out the ARV of a property, research recent sales of similar properties in the area and estimate the cost of repairs.
Large Amount of Equity
Finally, you’ll want to look for properties with a large amount of equity. Equity is the difference between the market value of the property and the outstanding balance on the mortgage.
Properties with a lot of equity offer a great opportunity for wholesalers to make a profit.
Trend on the Rise
Bulk portfolio deals. Instead of focusing on just one deal, find a way to package multiple deals together and sell them as a portfolio. This will make you more money in the long run and free up your time so you can focus on other things.
How to Find Houses to Wholesale
Now that you know what to look for in a wholesale property, let’s discuss how to find them.
Search the MLS
The MLS (Multiple Listing Service) is a database of all the properties that are currently for sale by real estate agents.
You will find more motivated buyers by searching for houses that have been on the market for 90 days or more.
If you don’t have access to the MLS, you can search for properties on real estate websites like Zillow or Redfin. You could also check out specific sites for real estate investors like Mashvisor.
Drive Around Neighborhoods
Often called, drive for dollars, is a simple but effective technique for finding houses to wholesale. Basically, you just drive around looking for vacant, abandoned or distressed properties.
Once you find a property that looks like it might be a good candidate for wholesale, you can do some research to see if it’s owned by the bank or an individual.
If it’s owned by the bank, there’s a good chance you can get it at a discount. And if it’s owned by an individual, you can still try to negotiate a good price.
Either way, driving for dollars is a great way to find properties that could be profitable investments.
Advertise For It
You can also find wholesale deals by advertising that you’re looking to buy properties.
You can do this by putting up a sign in the yard of a vacant property or by placing ads online or in newspapers.
This method will take some time and effort, but if you’re persistent, it could pay off.
Trend on the Rise
Use social media for marketing. If you have a budget for advertising you can use social media to get ads directly in front of your target audience. Facebook, Instagram, YouTube and TikTok are the major ones to market on. If you don’t have money to spend on advertising, pick one or two of these platforms to consistently create content on.
Direct Mail Marketing
Another way to find wholesale deals is to direct mail marketing.
This involves sending a postcard or letter to homeowners in a specific area, letting them know that you’re interested in buying their property.
You can use public records to get the owner’s name and address, then send your marketing materials through the mail.
Lastly, Network with other investors. Other investors can be a great source of leads on potential deals.
Attend local investor meetups or join an online forum to get connected with other investors in your area.
Tips for Success in Wholesaling:
- Know the real estate market in your area – This is critical for finding properties with the potential to be profitable investments.
- Educate yourself on the process of wholesaling – There’s a lot to learn, so it’s important to have a good understanding of the process before you get started.
- Be patient – Don’t expect to find the perfect property right away. It may take some time and effort to find a deal that meets your criteria.
The Due Diligence Process
Once you’ve found a property that you think could be a good candidate for wholesale, it’s time to start the due diligence process.
This is when you’ll investigate the property to make sure it meets your criteria for a profitable investment. The first step is to order a title report.
This will show you who owns the property and whether there are any liens or encumbrances against it. You’ll also want a market analysis.
Once you have all of this information, you’ll be able to make an informed decision about whether or not to move forward with the deal.
Real Estate Terminology Every Wholesaler Should Know:
- After Repair Value – The value of a property after repairs have been made.
- Assignment of Contract – A contract that allows the buyer to assign their rights to another party.
- Due Diligence – The process of investigating a property before making an offer.
- Buy and Hold – A strategy where an investor buys a property and holds it
- Closing Costs – The costs associated with the purchase of a property, including loan origination fees, appraisal fees, title insurance, and other miscellaneous costs.
Wholesaling can be a great way to get started in real estate investing because it involves less risk than rehabbing or buying and holding.
Plus you will learn about the real estate market while you’re doing it and if done right you can make a profit in the process.