Market Research for Wholesalers

[Russell Ponce]

What is the best way for a wholesaler to size up a market? My general feel is if there's a lot of run down housing mixed with some well taken care of properties that makes a good market and if there's hardly any run down properties that makes a thin market. However, there has to be some data I can crunch, would love to hear what some of you look at. Thanks

[Anson Young]

When dropping into a new market, I always do the same exact thing. First, you will need MLS access, or MLS data, or the BEST raw data you can get. I really dont know any other way to do this.

I'll look up cash sales in a wide area in the last 6 months under $100k. You will immediately see hot spots where there are large clusters of properties on the map. This is where cash investors are buying. Who is your TARGET customer as a wholesaler? Cash investors! I look in 2-3 HOT areas, and really study what is being bought. Bed/bath/garage/SF/type (ranch, etc). Price per square foot, etc. I go one step further and feed this all to an excel spreadsheet (RAW data, remember...).

I will then look up FINANCED sales in the same exact areas in the last 6 months. I should find lots of flipped properties in there. I feed my excel monster the same data for fixed up properties on another page.

Based on this alone, I should know where investors are buying, and where their flips should be selling. Thanks to my excel spreadsheet, I'll know by square footage, or type, or bed/bath count the desired price range I'm looking for. I know where to look, I know where to market. If investors are buying at $50k a 3/2, I absolutely know anything around that number that comes up or calls me based on my marketing, I have a deal. I will of course do more accurate comps, but this blanket method for small pockets gives me a great idea on activity in these areas.