Finding buyers lesson (part 1)

Bird Dogs, Wholesaling
1

I get email virtually every day from people who want to know where to find buyers for their wholesale deals. I see countless posts on here of people asking where to find buyers. So I figured I would put together most of the ideas that I have used or have seen used for finding buyers into a single post.

I am sure there are countless other places and ways to find buyers beyond what I am mentioning, so I will leave it up to other people to fill in the blanks that I have missed.

Keep in mind these are ways that I or my clients have actually used, so I know that they work because I have done it.

  1. We Buy Houses Signs I call every single one of these signs that I see, I actually keep a note book full of numbers and info that I find out about these companies when I call.

I usually ask them whether they are still buying, what they are looking for, what percentage up FMV they are typically paying, and what areas of town they want to buy in.

While I have them on the phone I also ask them if they wholesale out any of their homes, if they do then I ask them to call me when they have something good. I tell them that if the deal is right I can close in less than 2 weeks with cash.(I can do this because I have other buyers already in place to buy their deals, sometimes these buyers could be other cash for your house buyers)

Here is a sample of a deal that I put together using this.

  1. I called a we buy houses sign

  2. Found out where they were looking

  3. Put a home under contract for $52k in that area

  4. Called them and let them know.

  5. I signed a 6 month lease option with them for $64k

  6. I closed the home.

  7. The lease option started

  8. He sold the home

  9. We close this week, I make about $12,000 (I also made commission when I bought the house, because im a realtor)

  10. He makes around $12k.

  11. Were all happy.

  12. Call realtors I call realtors and find out if they have any cash buyers that are looking to buy some wholesale deals. It varies on what I offer to pay them but typically I offer 10%-20% of my profit, or a flat 2-3% fee, each time the buyer they have given me buys a home. It creates a win- win, I get a buyer and they get paid whenever their buyer buys a home.

I offer the continuous pay because a realtors worst fear is that they give you a buyer and he buys from you, then when they have a good property to show their buyers they cant buy because they have already purchased from you.

If the realtors dont have cash buyers, I tell them that if they bump into any great deals, they should call me and if the deals good enough we can buy with cash and close in less than 2 weeks.( Often times you can use other realtors buyers to buy another realtors house and you can make money setting the two up)

An example of one of my clients deals that he ran this way.

  1. I called my client about a great HUD deal

  2. He liked the deal and put the home under contract for $115k (I made a $4800 commission on the home when it closed so I was happy)

  3. We had 60 days to close the HUD home so he started calling realtors

  4. He found a realtor with a cash buyer that was willing to pay $122,000

  5. We assigned the contract (this is a secret)

  6. We went to closing and his buyer brought $122,000 cashiers check.

  7. My buyer left with a check for $7,000 ( he used none of his own money, and I found him the house so he was happy)

  8. I left with my $4800 commission

  9. The realtor who brought the buyer took no commission but got a commitment from his buyer that he would list the home with him when he sold it.

  10. Newspaper ads I dont personally use this one, I have clients who have had great success with it though. They simply place a small classified ad that reads “Looking for buyers to purchase homes at 50-70% of true value”

I have picked up endless buyers with this ad though “Free List of 45 foreclosed/distressed homes” call or visit www.$$$.com. The reason that I have had so much success with this ad is because anyone thinking of buying real estate would much rather get a free list of 45 then have to call each individual ad. You can have a local realtor put together a list of properties for you and email them to you if you cant find your own. Then take the list that they send you and email it out to people that respond to your ad. Keep in mind you dont really care about the list that you send, you care about getting the name, phone number, and buying qualifications of responding buyers.

A real life example.

  1. I placed my free list ad
  2. I got about 30 responses for the month
  3. Found one buyer who has paid me over $75,000 in commisions over the next 3 years on deals I brought him.

These were realtor commissions, but if you can find a buyer who is taking the kind of action he was you could seriously line your pockets wholesaling to him.

  1. HUD homes this is my own technique that I started using to get buyers just for my realtor purposes. Watch for a great deal on a HUD home or any great deal for that matter, then park outside for a few hours and talk to the people going to check out the home. Most of the areas investors will find there way to the property and you can give them your card and be sure to get there info. Tell them that you run into alot of deals and ask them if they would like you to give them a call when you run into something decent.

A personal example.

  1. I went to look at a good HUD home that I was going to buy myself.
  2. The neighbor came over and wanted to see the home while I was there.
  3. I showed him the home and he ended up buying it from me.
  4. I ended up making $2500 in commission on it.

If I were not a realtor, I would have simply talked to him and found out what he was willing to pay, then wrote up a wholesale contract, then put the home under contract with HUD, then played the spread.

This was my most recent deal, but I have picked up endless buyers for other homes while parked outside of HUD homes. I call it hunting for buyers. Its kind of like deer hunting with a bait pile. The home is the bait pile and the buyers are all coming to eat.

  1. Talk to your current buyers buyer typically know other buyers, ask your buyers if they know of anyone else who is buying (let them know you will only call the referal if they are passing on the property). You also might offer to pay your buyer for a referall fee if one of there people end up buying a house from you. This technique also works great if you have a buyer that only wants to buy in a certain area, then you can call their referall if you have a home outside that area.

Personal example.

  1. One of my buyers had too many homes and could not buy.
  2. I asked him if he knew anyone else who might be interested.
  3. He gave me the number to a cousin who was an even bigger investor
  4. I ended up selling 3 homes to his cousin this year, and paid him a referal for each one.

5. Local REI meetings If you have a local investor club join it, if you dont then start one. It kind of speaks for itself that this is where many great buyers will be. Just be sure you know a fair bit about what you are doing before talking to very many people about potential deals. The last thing you want to do is burn alot of bridges by showing your new found buyers a bunch of crap.

  1. Birddogs for buyers Outside of having bird dogs look for homes for you, you can also have them look for buyers for you. Give them your cards and have them hand them out to people they might meet that are looking to get into real estate investing.

  2. Brochure Boxes Just like realtors use brochure boxes you can use them to. If you have a property to move leave a brochure box that talks minimally about the property that it is left at, always be sure to leave out pertitant info like price, sqft, or bed/baths. If you give all the info away then people will never call you about the property. Focus the brochure mainly on other potential deals in the area or say that you are looking for buyers for properties at 50-70%FMV.

  3. Out of towner and landlords Many people sell themselves short when they are dialing for dollars. Typically people call or mail out of town owners and other landlords to see if they want to sell. The funny part is if they dont want to sell then there is a chance that they want to buy, so ask them if they arent selling, then would they like to buy some more, or if your mailing then include buying info on your mailer as well.

I gotta go now, the wifes ready for shopping, I will add to the post with some of my other ways but this should be a start. Hopefully the big dogs can come in and fill in the blanks.

Eric Medemar

2

Watch the HUD solds and find out who is buying them, then call them down the road and find out if they are looking for more deals. A great way to pick up buyers that are actually doing something.

Eric Medemar

3

Thanks for all the info all info helps. I am new to this site and must say I do thank it is great. This is like another one for home inspectors that I get on as well. All keep up the great work.

4

I am on the other side of the coin from you. I am an active investor, a cash buyer, and I have multiple business LOCs ready to pull the trigger on good deals. The problem I am facing is finding those honest and ethical people (like your seem to be) that are capable of brining me the deals. Do you have any suggestions for going in the opposite direction?? It seems much harder to find the wholesalers (or bird dogs) than the buyers. Now, there are plenty of people that can bring me underestimated repair numbers and over inflated ARVs and claim they are great deals

5

I am just in the infant stages of my wholesaling RE venture and I was wondering about pr they whoesalers them selvesoperties that I have aquired through assingment contracts

I dont think they have a franchise in Reno/Tahoe/Carson City, but if I called a place like Home Vestors, do the work with wholesalers or are they also in the same business.

If I do contact a realator…who should I call? Assis2Sell, GMAC, Ferarri-Lund, ERA, etc.

How long do you have to flip the property to a cash buyer on average? and what do others tell the current home residents about the process.

Thanks for any assistance you may provide

6

I have worked with Homevestors on a couple of deals that I have bought from them, they are in the wholesale business, but they do offer deals that would be good enough to wholesale onto somebody else. I ended up buying 2 from them and then doing flips with them. If you find any great deals you might also think about wholesaling over to them.

Eric medemar

7

look for recent sells of homes papers. look thru them each week, watch names are repeted often. also llc. inc. co & sign’s may be investers make the calls

8

I have had great success this sunday running a wanted to buy ad with a specific timeline.

9

I am an investor as well. You can also call the “We Buy Houses” numbers and they often have good deals for me. Call a few Hard Money Lenders. They deal with all kinds of investors. I found an incredibly good Wholesaler that way and as a wholesaler, you can find out from the HML’s which investors are the most active.

10

Eric, is it possible to assign a Hud Contract, for I thought not…

11

It is, I have been to quite a few closings where the buyer has walked away with 6k-12k using the assign a HUD technique.

I am sure some of the experts in here could teach you how

12

How about yourself, could you give me a brief description how?

Thanks in Advance.

13

Finding real buyers is the problem. We deal with luxury homeowners who want to sell their estates quickly, at 20-40% below appraisal. We order current appraisals and title searches to make sure the deal is golden.

There are so many imposters out there pretending to be buyers. All they want to do is to take the property, mark it up significantly and send it out all over the internet. While I know networking is important, adding $400,000 onto a good deal is greedy and slows the rate to which the house can be purchased–which doesn’t serve the homeowner.

Or they will sign a NDNC and then go straight to the homeowner and try to haggle them down even more. If a homeowner is willing to sell their 3 million dollar estate for 1.6 and it is in a hot area and needs no repairs, why would you want to beat them down even more, when the numbers are good?

Oh the stories I get from “serious” buyers. They always say they can make a decision quickly, but after you release the details of the property, they vanish. I’ve now had to become an investigator when first contacted by a “high-end buyer”. If they refuse to give me their telephone number, or their number is a cheaper cell phone service (ie: cricket) they probably can’t afford to buy a 2 million dollar home. We tell them they need earnest money, just to weed out the fakes. I’ve had them put fake names and numbers on the NDNC, so their contact with the homeowner won’t be traced.

The funniest was the other day when a “buyer” with a Metro PCS phone emailed and wanted his in-house counsel to review “any and all appraisals we had on current properties”. When I told him I wanted to chat with him first over the phone, he told me he was on a film production site and wasn’t available to talk! LOL Sorry if that was you, Steven Spielberg!

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woops screwed that one up. Ive been dealing with reo asset managers for many of the large banking establishments and have found home sthrough them on average 60% below retail all the way down to 8%. I actually purchased a home valued at 90K for 2500 becasue they didnt want to deal with the home anymore. Either way a good reo asset amanager can do wonders for you, the ones i dela with find me these delas on average every few days and can have info across the USA in the same amount of time. They work above and beyond any real estate salesman ive ever dealt with. Going to courthouse steps can work but i prefer getting information about homes that have dropped in price considerably.

16

Two of the three homes I bought last week were from realtors who let me know that the asset managers wanted the properties off of their books. I didnt do as well as $2500 on 90k, but I did get one that got foreclosed on at $108k for $29,500.

Eric Medemar

17

Would it be a violation if we paid a realtor a certain amount to find a client?

I’m a bit confused about that. As a loan officer/asipiring investor I find your post very intriging, but I want to be sure I’m not violating any RESPA laws or anything.

Can I find a property, line up a buyer, and give a comission to a realtor for helping in between? Am I able to write up their loans as well?

I don’t mean to pick at your knowledge, but I’m starting out as a loan officer and want to make sure everything is okay. Thansk.

18

Where do you find the asset managers who can tell you of the deals? Newbie here. :-\

19

Hi, I dont really have trouble finding buyers, I just post an ad on different forums and I get a nice amount of PB(potential buyers), then I send out my preference sheet and add them to my files. My thing is finding the deals to take to the buyers.

20

There is an investor up here in the Sonoma county area of Ca. that pays about a 5K finders fee to realtors for houses they close on. But does not always list with them.