Find buyers first or sellers first? I was looking through different books and one may say look for motivated sellers first to market the house. Then one will say it is easier to find a buyer first then locate a seller with what the buyer is looking for.
chicken or the egg question. i recommend doing them both at the same time.
Go for egg after that switch on to the chicken.It would be more beneficial.
Ok heres what I did. I ran around town in my car looking for those FSBO signs got about 20 numbers and addresses. Then called them up asking how much they were asking and a few short details about the property. Next day I looked on our local news papers website to find buyers. ( if anyone wants to know how I do that feel free to ask.) Personally I think it’s better to have something for an investor to go and look at after you get done explaining to him that your a wholesaler. It just seems more professional than say “well I don’t have any property right now, but I will later mister investor I promis!” You see that just doesn’t flow right at all.
How-ever I would say that having buyers is equally important as having properties to sell to them.
So for you I would say, just get atleast one property that might be of interest to an investor and take the stance of a “bird dog” with them. Keep atleast one property to offer to investors. The rest of the calls you should be making is building your team, buyers, RE agent, cpa, attorney in that order.
Sorry guys. You need to be more specific. What do you consider the chicken and what is the egg? I never had the chicken or the egg talk, nor do I know anyone else who have.
always always always find your buyers first…to properly wholesale a deal you have to know what the buyer is looking for…cause if you go out and find a house first how do you know if its at a good enough discount for the buyers of that area without talking to them first… it will save you alot of trouble and stress :biggrin
I think ACES gave you really good advice. Just get a deal first. Then all the rest of the peices will fall into place.
What is a deal? That depends on your market. In Southern California, a deal would be 70% of after repaired value, period (or less). Find that, and it’s easy to find a buyer.
In fly over country, you might find that a deal might represent 25% of ARV (or less).
If you get a deal, but nobody wants it? It isn’t a deal. Deals have to be obvious. Don’t create a reputation of offering iffy deals and calling them “good.”
Meantime, it will take you less than a week to sell a true deal. If after a week, you still haven’t found a buyer yet… Walk. Find a better deal.
Stay away from 2 bed houses and ALL condos. Nobody wants those.
You will NOT get these huge discounts on newer, pretty houses. Forget chasing that froth.
Focus on fixer/dumps in C-grade, bread and butter neighborhoods.
Buyers are a dime a dozen if you have a true deal.
That’s what I was feeling at first. All the other wholesale experts say differently. The say it in the books and on their videos that you should find a motivated seller first, put house under contract, find end buyer, then flip that contract to the end buyer and get paid. That’s how they put it in simple terms. Everyone here is not quite on the same page which is confusing to me.
Perhaps what is confusing is that there is not ONE way of doing anything in real estate. What works for one guy in California may not work for the gal in New Mexico. Real estate varies a great deal regionally…ther is no one cookie-cutter, ‘one size fits a gorilla’ way to do business.
I think in general terms, it is an excellent idea to have a preset list of ‘go-to’ buyers in advance…that save time and aggrevation. If you start producing good deals, other buyers will follow. Being in a position of having a house under contract with a motivated buyer and then not being able to flip it to an end buyer relatively quickly will be ‘awkward’ and very uncomfortable.
But, FLEXIBILITY is a HUGE deal in the REI world…it is not all set in stone.
i agree with kdhastedt think about this you get a house under contract but nobody wants the deal so then you have to cancel the contract with the seller(uses one of your contingency clauses) which is a sour feeling cause you didnt find out what the buying rate in your area is with investors… because the 70% rule does not work in all areas… some areas the deal isnt a deal until you hit the 60% range. because you have to know what the investor wants to do with the property if he’s rehab and flip then ofcourse he wants a deeper discount if he’s just rehab and renting then most causes 70% is cool…it all depends on what the investor wants to do with the property…
Definitely a buyers’ list and cash buyers only (or with access to line of credits.)
It is like the old saying about sharpening the ax before cutting the tree … if you have your buyers’ list in place first, then you know what properties they are looking for and your effort will be straightforward and easier in finding properties and making the deal a success.
My suggestion is to build a buyers’ list, and set up an autoresponder service, where you send weekly newsletters with relevant information about local real estate and eventually photos and information about available properties. Also send a survey through the autoresponder to your buyers periodically asking what properties they are looking for (areas, type, price), so that you keep a live feedback going and your list remains fresh.
Buyer’s list it is. I am not familiar with what an auto responder service is. Where do you get that?
Are you lost?