How to Get Started in Real Estate Wholesaling
By Duncan Wierman
One of the best opportunities in today in real estate is
wholesaling. It's a great opportunity because it allows investors to
build an income with little or no capital and credit. Wholesaling is
when a middleman puts a property under contract and assigns / resells it
to a buyer. The wholesaler then makes a profit based on how much the
property was on contract for and how much it was sold for.
So how
do you get started wholesaling real estate? The first step of the
process is getting set up. You'll need to put together your team. Find a
good REO realtor, Birddogs, inspector, escrow company, loan officer,
and attorney. Every state has different laws when it comes to real
estate so getting in touch with your local Real Estate Investor
Association (REIA) is a good idea to help you out and tap into
everything you need in order to make things move smoothly when you get a
deal set up.
The next step is to start building your buyer's list. Most beginners make the mistake of trying to look for motivated sellers but it's a better idea to find investors first. The reason why it's better to find buyers first is because you can get an idea of what they are looking for and when you do find a great property, you can move it quickly. There are many wholesalers that find the right property but cannot get it sold. The owner of the property usually moves on to somebody that can help sell the property.
In order to build a buyer's list, you have to go where the buyers are. Post an ad looking for investors in classified sites like Craigslist. You may even want to run some Google or Facebook display ads to start building your list. Another great way is to network with people in the real estate industry by going to club meetings, seminars, and events.
Even better, you
can go to local foreclosure auctions and network with the people there.
There are many investors and homebuyers in the crowd so you are bound to
make a lot of connections by talking to people. Remember that your job
there is to add value rather than try to sell them on something. Keep in
mind that everyone there is attending for the sole reason of finding a
great deal.
The next step is to actually find the properties. There are many ways to get great deals on properties. The first way I would suggest is to look for properties from probate estate. Talk to the owners to see if you can take the duty of helping them sell their property so they can get cash they need quick to pay estate taxes.
Other opportunities include bank owned properties. You may even try going to real estate auctions to see what's available. Remember that some of these methods will involve an some research and time to establish yourself. You have to figure out what is involved and educate yourself so you know what to do.
The final step is to set up a marketing system. At the end of the day, this is a real business and you should treat it as such. After your first deal or after you get a few deals finished, you should set up systems so that you can find more properties and increase your chances of selling the properties you have on hand.
For
example, you may want to create a marketing campaign to target probate
attornies, or personal representative. You may even want to setup a
birddog team, and teach them how to find you the type of deals you are
looking for. You may want to do a targeted geographic Facebook Advert.
You can also regularly contact your buyer's list to let them know about
the latest properties.
A final tip is that you should be in charge of everything. It's your responsibility to understand all legal matters, handle the business and marketing processed and making sure everybody on your team knows how to interact and when. The whole purpose of being a wholesaler is to be the middleman so you need to be the one getting everything moving smoothly.
Real estate wholesaling is the perfect way to get your foot in the door in real estate investing because you don't have to invest a lot of money to get started. There is less risk compared to other real estate investing strategies. A lot of wholesaling is all about being prepared, doing your research, and connecting the right people. If you've always wanted to get into real estate, this is the strategy you should do first if you have limited time or money, and don't want any risk. It's one of the best ways to raise cash quickly and get real world experience.
The next step is to start building your buyer's list. Most beginners make the mistake of trying to look for motivated sellers but it's a better idea to find investors first. The reason why it's better to find buyers first is because you can get an idea of what they are looking for and when you do find a great property, you can move it quickly. There are many wholesalers that find the right property but cannot get it sold. The owner of the property usually moves on to somebody that can help sell the property.
In order to build a buyer's list, you have to go where the buyers are. Post an ad looking for investors in classified sites like Craigslist. You may even want to run some Google or Facebook display ads to start building your list. Another great way is to network with people in the real estate industry by going to club meetings, seminars, and events.
The next step is to actually find the properties. There are many ways to get great deals on properties. The first way I would suggest is to look for properties from probate estate. Talk to the owners to see if you can take the duty of helping them sell their property so they can get cash they need quick to pay estate taxes.
Other opportunities include bank owned properties. You may even try going to real estate auctions to see what's available. Remember that some of these methods will involve an some research and time to establish yourself. You have to figure out what is involved and educate yourself so you know what to do.
The final step is to set up a marketing system. At the end of the day, this is a real business and you should treat it as such. After your first deal or after you get a few deals finished, you should set up systems so that you can find more properties and increase your chances of selling the properties you have on hand.
A final tip is that you should be in charge of everything. It's your responsibility to understand all legal matters, handle the business and marketing processed and making sure everybody on your team knows how to interact and when. The whole purpose of being a wholesaler is to be the middleman so you need to be the one getting everything moving smoothly.
Real estate wholesaling is the perfect way to get your foot in the door in real estate investing because you don't have to invest a lot of money to get started. There is less risk compared to other real estate investing strategies. A lot of wholesaling is all about being prepared, doing your research, and connecting the right people. If you've always wanted to get into real estate, this is the strategy you should do first if you have limited time or money, and don't want any risk. It's one of the best ways to raise cash quickly and get real world experience.
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