Real Estate Investing – How to Find Deals to WholesaleOctober 16, 2021
Are you finally ready to start finding great real estate deals that you can wholesale for a fast profit? Well, let’s get a big picture overview of some of the various ways that you can find deals as a real estate investor or real estate wholesaler, and in future articles I will break each one down in detail.
Before I get started, I want to point out that there are dozens, if not hundreds, of variations on these methods for finding deals. You may talk to another investor who is doing something similar (mailing a different list of people, using a different flyer method, and so on). So, to spare you the monotony of alternative to backpage endless variations, I will try to discuss some of the more common and/or more effective methods I know of for finding real estate deals from years of personal experience and the experience of the hundreds of wholesalers who I work with.
How Investors Find Deals
According to a survey of investors in Gary Keller’s book, “The Millionaire Real Estate Investor,” 32% of their deals came from networking, 28% came from real estate agents and the MLS, 10% from driving and walking neighborhoods, 9% from newspapers, 7% from foreclosure listings, 4% from For Sale By Owner (FSBO), 3% from Internet and Database research, 2% from targeted marketing and 5% from other sources. So, there are many ways to find wholesale deals, we will be focusing on locating motivated sellers.
These folks should be your main focus: finding sellers that need or want to sell their house. We will be trying to find sellers that are willing to sell their house at a discount so that we can wholesale it, at a discount, to make a profit. The challenge is that sellers don’t give away equity. What? I thought you just said that we are trying to buy houses at a discount. Now you are telling me that sellers don’t give away equity. Yes, that is correct. While a seller will not give away equity, they will trade their equity for a solution to a problem or challenge they are facing. So, as real estate investors and real estate wholesalers we are looking for problems to solve and ways to bring value to a transaction. That’s why we are looking for motivated sellers. Sellers that have a problem or challenge that we can solve.
What Motivates Sellers
Some sellers will be motivated by financial distress: they can’t make their payments anymore or need money for some urgent financial need like medical bills or to settle a divorce. They cannot wait to sell their house traditionally either for sale by owner or with an agent. They need an investor to buy it now – even if that speed means selling it for a lower price.
Some sellers are motivated for very positive reasons: they’ve been promoted to a much better job, are being transferred, and don’t want to deal with a vacant house to sell while they are focusing on their new job. Maybe they are getting married and need to liquidate one house. There are just as many positive reasons that people are motivated to sell as there are negative ones.