This article completes our series on “wholesaling” real estate. So, I’d like to give you a few more ways to get wholesaling prospects. In the last article, How to Find the Right Kind of House to Flip, we talked about the “driving & calling” method, and it’s a method that will produce some results. However, it takes a lot of energy and has a limited potential.
That’s okay when you’re just starting out. Here are a few more methods that cost some money, but do bring results faster.
Get some bandit signs made up and place them on busy intersections. I’m talking about “We Buy Houses” signs. Now you need to be strategic with your decision on where to put them. Knowing that the best wholesaling prospects are lower-end houses in need of repair, you would choose intersections close to those neighborhoods. As always, make sure you’re not breaking any local laws (called “sign ordinances”).
Placing an ad in a local paper will bring calls. The important thing here is to rotate a few different ads and track the response. You want to figure out which ad works the best over a course of a few months. Here are a few examples of the ads you can test for finding wholesaling prospects:
Call 24hrs Recording (333)444-5555
I LOVE UGLY HOUSES
QUICK CASH – CALL TODAY
Free Rec. Msg. (333)444-5555
Do You Have a Problem House?
We’ll BUY it “AS IS”
Call 4 Cash: (333)444-5555
This is my favorite! To perfect it takes a little more skill than we can cover here, but direct mail is definitely the most effective method and the most profitable one. In essence, you can target foreclosures, vacant houses, out-of-state owners, and any other list you think has the prospects you need.
The list needs to be filtered down by “wholesaling-specific” criteria, like “year built” (should be 15 to 20 years ago – remember, you’re looking for older houses) and “zip code,” which will determine the areas of your interest.
The key to making the direct mail work (besides having a targeted list) is having a good mailing piece (postcard or a letter) and having a SYSTEM to track and manage multiple mailings. We use ProfitGrabber Pro to do that.
Another effective method. We get a list of active listings that have “wholesaling-specific” keywords in their description, like: needs repairs; needs TLC; as-is; handyman special, etc. Once we have such a list of records, we blast them with a low-ball offer (40% – 60% of the listed price).
With this approach, You need to make 150 – 200 offers to generate some interest. We automated that process with ProfitGrabber PRO, so the whole process takes a few minutes of our time and the system faxes 150 – 200 personalized offers. Then we just sit back and wait to get 3 – 5 counter offers.
Then the negotiation starts, and at that point we may go out to see the house. Notice, we don’t see the properties we’re making offers on before there is more interest. That’s why they’re called “blind offers.”
What to Ask When They Call
Okay, so now that you started to get some calls from the sellers, let’s talk about the four most important questions you need to ask them.
The most important “ingredient” a seller needs to have in order for our creative real estate business to work is MOTIVATION. Therefore, the first important question to ask is “Why are you selling?” You ask this question after you spend a minute or two building rapport with them.
The next question is “What do you owe on the property?” You need to know that in order to determine if they have any equity.
You also want to know what they think the property is worth, so ask that.
Another important question you need to ask is about repairs. Ask them what they think the property needs in terms of repairs.
And the final question is “What do you want.” This will help you determine their motivation, in case you don’t find it sooner. If they want substantially less than what they told you the property is worth, then you know they are motivated.
And finally, it’s always good to ask “When do you want to close?” It shows motivation, and it’s one more opportunity to ask “Why so soon?” and find out more about their situation.
Over these six articles, you got some basic idea how the wholesaling business works, now the most important step for your success is to TAKE ACTION. So create your action plan and start TODAY. Go out and drive some neighborhoods and start dialing! Good luck, and if you have any questions, I’ll be on the Real Estate Investing Forum.