In Part I of this series, we covered the basics of the wholesaling business. Your objective in this article is to compile a list of at least 10 investors to whom you can “flip” houses. The MORE the BETTER! It is very important that you get at least 10 investors on your list before my next blog article.
While you are speaking with all these investors, you will need to find an “investor friendly” title company.
Following are sources for finding all the investors you’ll need to whom to sell your houses:
Look in the daily and weekly newspapers for the “We Buy Houses” type ads. Call each of these ads and talk with the investor. Keep an information sheet on each investor. Be honest with them and advise them you are just starting out and would like to help them find houses that need to be rehabbed.
Ask if they would like to be contacted when you find a great deal. I assure you, they will all be very anxious for you to do the legwork for them. You also need to find out where they want to buy and in what price range. Some will only work in certain areas and price ranges.
Others will say “anywhere there is a deal!” Ask if they are cash buyers or if they will need to get financing. Find out which title company they prefer to use. Bottom line: Make friends with your local investors!
Yellow Pages or Google
You can search the Yellow Pages or Google for “Real Estate Investors” or for “We Buy Houses” ads in your city. Once you find an ad advertising to buy houses, you most likely have an investor who is your potential buyer. Contact them in the same way as described above.
Real Estate Investment (REI) Club Meetings
An excellent source of buyers for the houses you find will be your local real estate investment clubs. Most major metropolitan areas have at least one club that meets on a monthly basis. You need to join and attend every meeting.
The networking opportunities are endless.
When you go to the meetings, tell everyone what you are planning to do. Once again, collect names and information about people who are interested in buying houses. And remember to ask which title company or attorney they prefer to use.
Some investors hate to deal with emotional, distressed owners – they much prefer to buy properties at the foreclosure auction. At most auctions, the property must be paid for with cash or a cashier’s check within hours of the sale. What a wonderful way for you to meet CASH buyers for the houses you find.
Attend the foreclosure auction. Introduce yourself to the investors. Tell them you find houses just like the ones sold at the auction and ask if they would be interested in being contacted when you find something.
And just as you did with the “We Buy Houses” ads, you’ll need to find out where and what price range they buy in. Ask for their business cards and make notes on the back or take along a notepad. Make sure to do this either BEFORE or AFTER the auction, because the investors will be focused on bidding during the auction and will NOT appreciate any distractions.
Keep Telephone Logs
Once the word gets out that you sell wholesale houses, you should be getting regular phone calls from investors asking if you have anything. Keep a log of who calls. These will be the first investors you need to contact when you have a deal.
While you are working on getting at least 10 investors on your wholesale buyers list, keep your eyes open for any run down houses, perhaps even writing down the address, but do NOT start researching them just yet. This will get you in the “mindset” of getting the ball rolling.
Line ’em Up and Breath Easy
Knowing you have a list of potential buyers makes the job a whole lot easier and get you cash a whole lot FASTER. It may seem crazy to line up investors even before you even have a house, but believe me, it’s a necessary step!
Think about this for a moment – suppose you find a great deal with a huge profit potential. You know you can get a contract on it. Great. But you can’t make ANY money until you have someone to wholesale it to. If you don’t find someone FAST enough, you could lose the deal and all the potential profit.
Next, we’ll talk about finding a closing company and a real estate attorney to work with. But the first step is lining up the investors – so start now!