The key to successful wholesaling is finding deals where nobody else is looking. Many new wholesale investors are tempted by the low hanging fruit that is foreclosures. While the right foreclosure deal can be a home run they are also filled with competition. By wasting all of your time searching for the same deals that everyone else is you are missing out on other opportunities in your market. You want to create your own niche and find deals where other investors aren’t looking. Regardless of the competition in your market there are always deals to be found. Here are six ways to find wholesale deals.
- Vacant Properties. If you hop in your car and drive around for thirty minutes the odds are you will come across at least a handful of vacant properties. These are properties that have been abandoned by the homeowner and could be weeks away from foreclosure or bank possession. To capture these properties you need to do a little legwork. After writing down the address take a trip to tax office and find out who the owner is. Once you have a name and address there is multiple ways to reach out to the owner. For every ten vacant properties you may only talk to one homeowner who is willing to sell. Fortunately all it takes is one deal to make it worth your time.
- FSBO Signs. While you are in your car searching for vacant properties you should also keep an eye out for fsbo properties. You can identify a fsbo property by the bandit sign in the front yard. With fsbo properties you never know what they homeowner is looking for out of the transaction. They may be looking for a quick, cash offer that can close as quickly as possible. Much like with vacant property owners you need to reach out to them and start a dialogue. It is important that you attempt to learn their motivation within the first few minutes. Once you discover their motivation you will know what kind of potential deal you have.
- Craigslist. There are still deals to be found on craigslist, if you know where to look. Instead of looking at property listings your focus should be on landlords. There are many landlords who have grown tired of the process and would strongly consider selling if the right offer came along. Just like the other options listed you need to treat reaching out to landlords like a numbers game. You can probably email twenty to thirty different landlords every week. The message you send is critical. You need to stress the drawbacks of owning a rental property and how you may be able to help. If you don’t get an immediate response you need to keep reaching out for weeks, if not months. With enough persistence you may catch a disgruntled landlord at the right time.
- Newspaper Classified Ads. Reliance on newspapers for information has been greatly reduced over the past ten years. It wasn’t that long ago where many people get their news based on what they read in the paper. While many people have turned to the internet there are still a handful of people who look at the classified section, especially on the weekend. The cost of a three day ad is very affordable and can plant your flag in a market. You can also reach out to people who are looking to buy properties and see if there is a way to potentially work together. The newspaper may be in decline but it is not extinct yet.
- Divorce Attorney. There are many important contacts you should make if you want to grow your wholesale business. One of the most underrated is a good divorce attorney. In a divorce situation dividing up the property is often the biggest issue. If property ownership cannot be settled the parties are left with exploring refinancing options or a quick sale. Many times the parties will accept a quick, cash closing rather than wait for a traditional offer to come in. A divorce attorney can pass your name along as a reputable local investor and if they call you can start the negotiating process.
- Network. A good majority of wholesale deals go to those investors who are willing to put themselves out there. This means showing up at local networking meetings when you don’t want to. It means driving to the local REIA groups after a long day of work. It means talking to local real estate agents, mortgage brokers, builders, accountants and contractors in an attempt to generate business. All it takes is one or two solid contacts to greatly improve the number of leads that come your way. The more time you spend in networking and meeting new people the better your wholesale business will be.
The greater number of options you have for finding deals the more consistent your business will be. It is important that you fight the urge to put all your eggs in one basket. If one area is working you can give it more attention but you should never dedicate all your resources to it. Even the slightest shift in the market could cause your lead source to be become less attractive.
If you start by focusing on just these six options for a few hours a day after two weeks you should see a tremendous jump in your pipeline. Wholesale deals are out there but they won’t just fall on your lap.
