Starting my wholesaling business

[Taronda Ransom]

Hi everyone. I am staring my wholesale business in the Chicago area. And I have a few questions.

1. What are the best marketing tools for finding deals?

2. What are some of the best practices for building a strong buyers list? How do you find potential buyers?

[Maurice Smith]

@Taronda Ransom 

1. What are the best marketing tools for finding deals?

There are many options when it comes to marketing and the reality is it all boils down to your ethics, capital on-hand, local laws.

Capital on-hand: Starting with the basics and in order of expense (least to greatest); 1. Word-of-mouth (on the ground in the community), 2. Cold-calling, 3. Ringless Voicemail, 4. Text Messaging, 5. Bandit Signs, 6. Direct Mail Marketing, 7. Search Engine Optimized Website.

Ethics: We don’t use all of the above in our business because of the legalities and ethical implications. Every business owner has to make these decisions for themselves about their operations. We use Word-of-mouth, Cold-calling (but strictly numbers that are not on the DNC), Direct Mail Marketing (targeted to highly motivated properties), and an SEO Website (mostly warm leads that want to talk to you).

Laws: As it pertains to local laws, do your due diligence and be aware of what you can and cannot do as far as marketing is concerned in your target market.

2. What are some of the best practices for building a strong buyers list? How do you find potential buyers?

Best Practices:

• Start attending your local REIA meeting, get to know everyone; including, lenders, investors, and other wholesalers.
• Ask the investors what they primarily focus on fix and flip or buy-and-hold. There are other types but these are two to start with. Ask them what is in their buy box? Take note.
• Get Propstream, if someone says they are a cash buyer, qualify them by looking at other recent purchases, ask for an address, or search the register of deeds (then use Propstream to examine linked properties). You can see the frequency at which they buy and hold properties by examining the sale history of the property (you could also do this on the register of deeds site).
• When you have the funds invest in a good CRM/database and have a module or app to keep track of your cash buyers. Group them by investment strategies, preferences, etc. This allows you to be surgical with your deals.
• Learn how your cash buyers view the numbers or develop a strategy to quickly gauge where they need to be on rehab, ARV, neighborhoods, etc. (this decreases your time to dispo and builds confidence).
• You only need a handful of consistent (very liquid buyers) to keep your pipeline moving.

Finding Cash Buyers:

• If you get a subscription to Propstream, you can type in any City and State, or Zipcode and click the cash buyers filter. It will pull back properties purchased using cash. I like to filter the owner type by “corporate.” Most cash buyers that regularly purchase, flip, or buy-and-hold will normally have an entity or entities that they use to conduct business. From there, grab the entity name, do a search of the Secretary of State’s corporation site, retrieve the filing documents; some will have a phone number listed, others just an address. Use this info to reach out and add them to your buyers' list. If you can’t find “members” or owners of the entity, try contacting the Registered Agent, they may potentially be able to assist (not in all cases).
• As mentioned before, the REIA.
• Network with wholesaler-friendly agents. There are many out there, but not so much on the internet, I’ve met plenty at the REIAs and in other investor circles.
• Visit the next real estate tax auction at the county courthouse. The folks bidding on properties, more often than not are cash buyers or their surrogates. Introduce yourself, get a business card if they have one. See how you can contact them if and when you have a deal.
• Partner with an established wholesaler, JV a deal and learn who is who (cash buyers) in the area.
• If you see an active flip going on at a property, stop by, introduce yourself to the GC or other contractors. See if they can share with you who is flipping the house. Network.
• Many times, you’ll find GCs looking for a flip here and there as well.