There are few better ways to make money from real estate than establishing a wholesale real estate business. Wholesaling requires no money down, no credit, and no licensing. A real estate wholesaler’s success is predicated almost entirely upon hard work like backpage, good judgment, and a reliable network of buyers. But where to begin?
You Need Buyers
Unlike traditional real estate investing, where an individual or a business takes physical ownership of a property, improves it, then sells it for a profit (a practice more commonly referred to as “flipping”), a wholesaler merely enters into a contract to purchase a property that for any number of reasons (foreclosure, in need or repair, motivated seller) is selling below what it is worth.
The wholesaler then finds a buyer who is willing to take over the contract (and pay for the privilege). The real estate wholesaler is paid a small percentage of the spread between the asking price and true value of the property. Thus, the wholesaler makes some cash while the buyer is still able to secure a very good deal on the transaction. The key to real estate wholesaling success is being able to quickly locate and secure those buyers.
How Do You Get Your Buyers?
There are several ways to build your buyer list. Networking with local and national real estate investing organizations is a very good place to start. By joining these organizations, you not only have access to potential buyers, but also can draw upon the expertise of those who have been in the business much longer than you. There’s no sense in trying to reinvent the wheel. Wholesalers should also network with local contractors, real estate developers, and property management companies, all of whom would likely be interested in taking advantage of a good deal.
Another valuable resource is classified advertisements, both print and online. Real estate investors peruse their local newspapers for certain keywords in the ads, such as “motivated seller,” “great deal,” and “fixer-upper.”
If you want to avoid even the small costs associated with placing newspaper classifieds, real estate investors commonly turn to free electronic classified services, such as craigslist.com and backpage.com. These services will also open up your property to a nationwide network of potential buyers. Effective text for an ad could read, “Selling Houses at HUGE discounts – Investors Needed for Amazing Opportunities.” It would be lunacy to neglect such a powerful advertising tool.
If you have a real estate website, you can gather potential buyers via an opt-in newsletter. A newsletter can help you build a relationship with and eventually sell to a group of targeted real estate buyers. You can also try email marketing and PPC campaigns.
This is by no means an exhaustive list of the ways one can build a client buyer list – the only limitation is in the imagination of the entrepreneur. And when building your buyer list, be sure to secure the name, email address, fax number, and address of potential investors. Build an email contact list you can use to quickly spread the word once you have a property to sell.