Difficulty Finding Properties to Wholesale in Sacramento, CA

[Harry Case]

I am a wholesaler in the greater Sacramento, CA Market and I'm finding it difficult to locate deals for wholesale. Forget the MLS. Properties there are being snapped up at near ARV prices. I don't even know how the flippers buying them are making money. Foreclosures are way down in our market too. Even driving the neighborhoods yields little. Are there any other wholesalers in this market who are finding enough deals? I'm open to any suggestions.

[Wes Blackwell]

Hey @Harry Case! Great question!

The internet and TV has lead to the massive spread of information regarding real estate investing in the last 5-10 years. With TV shows like Flip or Flop, Flip This House, and Property Brothers more and more people are convincing themselves that they can rehab a property. This has lead to increased competition for deals, naturally for higher prices. Looking for deals on the MLS as a wholesaler is going to be a complete waste of your time. Even as a rehabber.

In order to find success nowadays, you have to be willing to go the extra mile and do what other wholesalers won't. That's the only way to spread yourself from the pack. Here are a few examples that I can think of:

1. Preforeclosures: There are roughly 200 preforeclosures per month in Sacramento County. This gives you more leads than you can likely handle, especially if you go back and pull all the people who defaulted last month and the month before that. Go straight to the owner's house and knock on the door. Foreclosure usually happens because of death, illness, job loss or divorce and cripples the homeowner's ability to make mortgage payments. They might be in a tight bind and be willing to sell the property below market value, and you can make your money in between.
2. Vacant/Non-Owner Occupied: If a home is sitting vacant the owner may be willing to sell it quickly just to get rid of it. They could have moved away, inherited, or just not care about it anymore or aren't willing to rent it. You can door knock with these too (but you'll have to do it at the tax mailing address) or you could simply send a letter. At that point it's merely a numbers game. Talk to enough homeowners and you'll soon find someone willing to sell at a wholesale price, especially if the owner lives out of state.
3. Driving for Dollars: The last method is to simply drive around and look for homes in disrepair... things like uncut grass, broken down cars in the driveway, or properties that could really use a fresh coat of paint. These indicate that the owner doesn't have the money to fix these problems, and that might mean they are in a situation where selling their home might solve a lot of money problems for them. You can either send them a letter, or go up and knock.

Now, you may or may not have been aware of all these strategies, but what's really important is that the point I'm emphasizing is HUSTLE. Not that you aren't doing that already, I don't know, but what I do know is that doing the above activities 40 hours a week will practically guarantee you success. 

While other wholesalers are relaxing at home and waiting for a deal to fall into their lap, you'll be out making things happen. I'm a firm believer that if you want success, you have to go out and get it, and the only real way I see having success with wholesaling nowadays is to get out their and meet property seller's face-to-face.