As a wholesaler, how will an end buyer know if I have a good deal?

Question

I've heard of this a lot: If you find a good deal, the buyers will find you. How does that work? If I put a piece of property under contract for a "good wholesale deal" price, do the specifics of the deal somehow get on the internet to which end buyers can see or what? I just heard this again on the 1st BP podcast with Marty Boardman. He said he put one of his deals w/the specifics in the newspaper for 200 bucks,....which is marketing. I'm under the impression that "buyers finding you" requires no marketing at all. Thanks. Any insight would greatly appreciated.

Taqee

Ellis San Jose · Answer

@Derron Taqee you ask a terrific question. Two things I notice when I meet newbies that prevent them from making themselves valuable. 1) I don't know how to calculate the real numbers required to recognize what a sellable "deal" is. 2) They don't know how to control a deal and put a property under contract. I respectfully disagree with the "build you buyers list first approach". Unless what you are selling is an extremely unusual product or if what you are selling requires an extremely rare skill to understand. A house is a heavily traded commodity. I think that's the easy part. Finding, creating & controlling a good deal takes skill but once you have it, you are extremely valuable. It's easy to find out who the cash buyers/investors are in the area you are farming. They leave footprints. Ever go to a foreclosure auction? Real Estate Club meeting? Network with realtors in your farm area? Search Public Records? Put the property under contract have good solid numbers, Post it for free on Craigslist, go to RE Clubs, do all of the above AFTER you have a great deal. If your numbers are solid, you will have an investor buy it from you. If you help other people make money, then you will make money.

Bill Ham · Answer

Here is also a general tip for you all getting started in real estate as well as flipping. There is no advertising or "magic bullet" to bring in deals that beats relationships with agents and brokers. Having a relationship with top agents will produce more profitable deals than anything else. Its work to get to know them and to build that quality relationship but it pays off in the end. People will try and sell you on lead generating ideas and gimmicks but none replace brokers and agents. Its work but so is the rest of this business. I have been self-employed in real estate for over 8 years and I have built a 400 unit portfolio and a management company. Best deals came from agents...not magic.

Bill Ham · Answer

@Derron Advertising is a great place to start. You need to be advertising for buyers at the same time you are looking for deals. You can have the best deal in the world and if you don’t have buyers...who cares? You are not going to get paid. Your buyers list is gold! Build it and maintain it. Once you have a big list of buyers selling to them is easy. You don’t even have to really qualify them. The fact that they may want to buy is good enough to be on your list.

Bill Ham · Answer

The secret to making money by flipping or wholesaling is to have a list of buyers before you find property. Most people get that backwards by finding deals and thinking people will show up to buy. That is a sales pitch from someone wanting you to buy info from them. Use your advertising to build a list of buyers and then go find properties to sell. Once you have the list the marketing is nothing more than an email to the list with the property info on it.

Curt Davis · Answer

Derron, you are still going to have to market the property you have under contract for sale. When you get a home under contract the first place I tell new investors like yourself to bring them is to the experienced wholesalers in your area. If its a true good deal they will buy it from you. If your looking for end buyers who might be wanting to hold onto the property, that is going to take time and mostly money for marketing considering your new. Good luck

Bill Ham · Answer

@Ellis San Jose Your right. If you can’t identify a quality asset then there is nothing of value to sell. There is an old saying- "Money is made when the value of something is known and money is lost when the value is not known." Proper deal funneling and analysis is a big problem for new investors.

Derron Taqee · Answer

Alright thanks everyone. @Ellis San Jose I most definitely will!

Bill Ham · Answer

@Derron I would not bother becoming an agent unless you plan to make a living as an agent. Becoming one may actually hurt you when trying to find deals through agents. They may be concerned with you trying to split their commissions. You don’t need to become a lawyer but you do need to have a solid understanding of real estate law. You also need to know how to do these jobs too Banker, Accountant, Lawyer, Appraiser, Property Manager. You don’t need to become each of these but you need to able to tell them how to do their job as it relates to your business. Having an understanding of what they do will help you to communicate your needs and strategies to them properly. Real estate is a business like any other. The better you are at it the more money you will make!

Derron Taqee · Answer

@Bill Ham Thanks for the tip. You said, "Best deals comes from agents". I recently read and heard that so I am planning on becoming an agent because I feel what they do would be a huge learning experience and a nice chunk of what I'd be doing daily and I would hate leaving that up to someone else. One question....would you advocate learning an attorney's job or just having an attorney on payroll? It seems their profession intersects a lot w/ours. Thanks again. @Ellis San Jose My construction background helps me with #1 but #2 is what I am trying to get a grip on. I was going to talk to an attorney to get my head around that! That second BP podcast woke me up when Karen said, "last thing you want to do is have a lopsided agreement in court". Haha. No jail for me. @Jack Bobeck Thanks sir! Your insight has kind of helped me in construction.

Bill Ham · Answer

I also agree with what @Ellis said about finding good deals being the biggest part of the process but I don’t think anyone should ever under estimate the importance of the exit or sale of a property. A good investor always has an exit strategy before they go into a deal. You can go to REIAs and use Craig’s List to try and sell your product but there is no system in place there. You have to go through that process each and every time you get a new property to sell. Once you build a buyers list you have a system in place that cuts down on the work of selling. Real estate is a business like any other. The product just happens to be real estate. The faster you treat yourself like a business and set up business systems, the faster you will become successful. Systems minimize personal brain damage!