Buying real estate from a wholesaler can be a great opportunity to purchase an undervalued property, fix it up, and reap profits later. Finding a good wholesale property, though, isn’t as easy as buying a property on the regular real estate market. Wholesalers are often on the clock – they have binding contracts with closing dates, and they have to sell the property by then, or else they lose it.
Undervalued properties in relatively good condition are highly sought after by flippers and other investors as high-potential investments. They go fast. So if you’re looking for property to buy from a real estate wholesaler, you have to cast a wide net and be ready to act fast. At the same time, do your due diligence – you don’t want to rush into buying a lemon. Here is a guide to choosing a good wholesaler and buying wholesale real estate.
What Makes a Good Wholesaler?
There are a few important things that make a good real estate wholesaler. The main thing to look for is transparency. Wholesaling, unfortunately, can sometimes be a murky business. Some unscrupulous people try to make a quick buck at the cost of ethical dealing. If you want to buy from a real estate wholesaler, make sure that they don’t avoid your questions and are open about the deal and the property. If they try to pressure you to make a decision fast, be careful. It might be that the closing date is coming up for the contract they’re trying to sell you, but they might also just be trying to prevent you from asking too many questions and doing your due diligence.
Another thing to ask about to sort the wheat from the chaff is their track record. A good real estate wholesaler will tell you about past deals they’ve done. Not all good wholesalers will want to get into details about past deals,
How Do I Find a Great Real Estate Wholesaler?
The best approach to find and buy from a real estate wholesaler is to build a network of them and then whittle them down to find the best one for you. The problem is that wholesalers aren’t like traditional real estate brokers. They don’t usually have a large number of properties on tap to offer interested buyers. The nature of wholesaling is finding undervalued outlier properties, spending the time to set up a deal, and selling them on (assigning the contract) as quickly as possible. Here are a few ways to build a network of wholesale contacts that you can then narrow down:
Searching online
This is the easiest and fastest way to find wholesalers. Just Google something like “wholesale properties for sale in X,” where X is the state you’re interested in. You can also search for “discounted properties for sale in X” or “distressed properties” and find wholesalers that look reputable. They’ll often have the option to sign up for their mailing lists. Another place to look online for wholesale properties is Craigslist and other classified ad directories.
Ask around
If you know any investors or flippers with whom you are on good terms, you can ask them for wholesaler recommendations. Of course, they may not be interested in giving your their sources for good deals. A good bet is to ask other people in the business. You can first ask real estate agents (as wholesalers often email agents to find buyers). Second, you can inquire with title companies and others involved in the industry.
Real estate investor groups and meetups
There are always some real estate investor groups (professional or amateur) around, and these are some of the best places to meet other investors and wholesalers. If you don’t find a wholesaler through these groups directly, you can always build relationships with other investors and ask them to put you in touch with good wholesalers if they come across them.
Keep an eye out for wholesaler marketing
You might receive offers to buy your house in the mail – it was spam before, but if you’re looking for a wholesaler, don’t throw it away. Instead, call the number and ask them to put you on the buyer’s list. Look out for billboards, signs, ads in the local paper. Often the wording is along the lines of “buying houses for cash,” so if you see something along those lines, take a deeper look.
How Do I Buy Wholesale Real Estate?
Buying wholesale real estate means going through a middleman – the wholesaler. They don’t own the property; they have a purchase contract with the title owner and assign (sell) that contract to you. Wholesalers will send out an offer to their buyer’s list, and the investor who agrees to the asking price first will most likely get it. If you are able, visit the property – whether individually or as part of a group viewing. If you decide to buy and your offer is accepted, the wholesaler will often ask for a non-refundable earnest money deposit. The sum varies from wholesaler to wholesaler and property to property. Before paying the earnest money, ask to see the wholesaler’s contract with the seller to ensure that everything is above board. They will assign that contract to you, so make sure that there are no surprises in it.
How to Find Wholesale Properties for Sale
Finding properties to buy from real estate wholesalers is pretty straightforward. The most accessible way is by searching online. Search for terms such as “wholesale/distressed/discount properties for sale in X.”
You will also find wholesale properties listed on Craigslist and other classified ad sites. Facebook has plenty of real estate groups that allow listings and offers.
You can use the same methods for finding real estate wholesalers to find wholesale properties. If you see any wholesaler marketing material, call them up and ask them to inform you when they are marketing a property – you want them to put you on their buyer’s list. Local real estate interest groups are a decent place to look for property offers, as people are always networking there. Good luck finding the right property for you!