It’s time you learned what finding wholesale buyers in today’s competitive landscape means for investors.
Wholesaling has become synonymous with today’s most popular real estate exit strategies, and for good reason: few opportunities offer a faster turn around period and less risk with a comparable return on investment. That said, more and more investors are turning to wholesaling strategies to reap the rewards so many before them have already realized. The validity of wholesaling as a pronounced real estate exit strategy has captured the attention of more investors than ever before.
It’s worth noting, however, that today’s competitive wholesaling environment isn’t something to fear, but rather embrace. While you may find yourself confronted with more competition than you expected, it’s entirely possible to give yourself an edge. As far as I am concerned, nothing helps wholesale investors more than preemptively finding wholesale buyers. I maintain that the best thing you can do as a wholesaler is to compile a list of dependable wholesale buyers before you even set out to find a property.
Otherwise known as a wholesale buyers list, your list of contacts should consist of willing and able buyers that will be more than happy to take a property off your hands in the event you present them with an opportunity that meets their criteria.
Finding wholesale buyers is the single most important task wholesale investors need to account for. If for nothing else, a proper wholesale deal isn’t complete until the property finds its way to an end buyer. No end buyer; no wholesale deal.
On the surface, finding wholesale buyers is about as obvious as a task as they come. However, you can’t truly understand the benefits of having wholesale buyers lined up before you even have a property under contract until you have experienced it first-hand.
Before you set out to land your first wholesale deal, consider finding wholesale buyers first. Only once you have a list of investors that will be willing to buy any properties you come across can I recommend wholesaling. And while it’s completely possible to wholesale a property without an established buyers list, I don’t recommend it. If for nothing else, having a buyers list to reference in the heat of the moment is pivotal to wholesaling success. You should already know which buyers you have waiting in the wings and what they are looking for. In fact, think of the list as a way of reverse engineering a deal. If you know what your buyers want, it will be a lot easier to find properties they desire.
Building a buyers list is pivotal to the success of wholesalers, which begs the question: How do you build a buyers list in the first place?
Today’s most successful investors are more than aware that, just like any other exit strategy, building a buyers list requires a marketing funnel. You aren’t simply marketing properties; you are marketing yourself. As an investor finding wholesale buyers, it’s in your best interest to build relationships with professionals in the industry. Only then will you truly get to know likeminded investors and understand what it is they are looking for. With a little due diligence, there is no reason you shouldn’t know the buyer of every one of your wholesale properties before you even get the contract.
If you are intent on finding wholesale buyers, I recommend using the following outlets:
The idea behind targeting these outlets is to identify individuals within your own industry. And these are far from the only sources of buyers you will encounter. Mind due diligence and seek out those in your industry; it’s the best place to start.
Finding wholesale buyers is either as simple or as complex as you want to make it. However, finding them is only half the battle; you need to make sure they are the right fit for your wholesaling endeavors.
It’s worth noting that finding wholesale buyers isn’t relegated to the search alone; you have to vet them. And while it’s easy to assume everyone you come across will be a great addition to your wholesale buyers list, it’s not always that simple. In reality, you will need to screen those you come into contact with to see if they are a good fit for what you are trying to accomplish. With that in mind, I highly recommend drafting a wholesale buyer pre-qualification form.
Not surprisingly, a proper pre-qualification form will include an entire section dedicated to contact information. Remember, a great pre-qualification form will inquire about every means of contact, not the least of which include:
In addition to collecting the respective individual’s contact information, don’t hesitate to to vet their personal needs, and even their own experience. The more you know about a prospective wholesale buyer, the more valuable they become. It’s in your best interest to determine their level of experience by asking them questions that will highlight their past transactions. Generally speaking, you should have a good idea of their experience and/or how many projects they have completed. Once you have an idea of where they stand, find out which types of properties they are most interested in. Do they prefer simple, cosmetic rehabs? Perhaps they covet homes that are more inclined to become rental properties?
Don’t stop there; you need to know as much about their interests as possible. In addition to learning the type of property they are interested in, ask them the areas they would prefer to invest in and the price range they are comfortable in dealing with. Whatever the case may be, find out what interests them the most and take note. Only once you are fully aware of what each buyer is interested in will they become a valuable member on your wholesale buyers list.
Once you know what they want, find out how they intend to fund any deals that come their way. Understanding their preferred financing method will help facilitate a smoother transaction in the future. Ask for their money source and which method they will use to finance a future transaction. It helps to know whether the buyer will be using cash, hard money, traditional financing or an alternative form of capital.
Now that you have just about everything you need to know about the individual you intend to add to your wholesale buyers list, there is one simple question I recommend closing out the form with: How did you hear about us?
While such a question may seem trite, I can assure you it’s as valid as the rest of the questions on the form. If for nothing else, it will offer you a way to track your buyers list leads. Take note of people’s responses and you will be able to uncover the source of most of your leads. In doing so, you will know which marketing strategies to put more money into, and which ones to abandon.
Finding wholesale buyers is vital to any wholesale investor. In securing a list of individuals that have specific needs, it’s entirely possible to cater to exactly what they want. In discovering what they would need to purchase a property, you can rest assured someone will want to take control of the contract in your next wholesale deal.