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Top 7 Tips: How To Find Wholesale Properties [Investor’s Guide]

The popularity of real estate wholesaling is a tribute to its viability and potential profitability as a real estate investment strategy. And while it is essential to understand how to complete a wholesale real estate deal, your knowledge of this investment technique remains theoretical until you have a property to wholesale.

In this guide, you'll learn exactly what wholesale properties are and how to find wholesale properties - whether you're a retail buyer, seasoned investor, or new wholesaler. Let's dive right in. 

                                                                      

What Are Wholesale Properties?

Wholesale properties share several common elements. They are often distressed properties

  • That may include single-family dwellings, multi-units, rental properties, and even commercial properties.
  • With a seller that is unusually motivated to sell quickly.

Sources Of Real Estate Wholesale Properties

Listed Properties

A property that is “listed” has been added to a database of available properties. This database is more commonly known as a Multiple Listing Service. The MLS is a database that can only be accessed by licensed real estate professionals as it requires membership and fees.

However, the MLS, as you would expect, will get the most exposure. As a result, you are likely to buck some stiff (and experienced) competition. Working with a real estate agent or licensee may provide a smart path and opportunity to pool talents.


Read Also: How To Get MLS Access: The (Ultimate) Guide


Unlisted Or Off-Market Properties

Unlisted wholesale real estate is the opposite of a listed property. Unlisted wholesale real estate could not be found on an MLS database. When identified, an unlisted property has the potential for the biggest payoff, but not without some extra legwork and effort. Unlisted properties will tend to have less competition for obvious reasons.

                                                                      

How To Find Wholesale Properties (7 Tips)

7 tips how to find wholesale properties

When a wholesaler finds a property that meets their wholesale investment criteria, they enter a contract with the seller for an agreed-upon price. A small earnest money deposit is typically provided in good faith.

However, before the “purchase and sale” deal closes, the wholesaler locates another buyer and assigns their equitable interest (their right to purchase awarded under the Principle of Equitable Conversion) to the property to another end-buyer – at a higher price.

It all begins with finding a property to wholesale. Consider these tips for finding wholesale properties and their motivated sellers -

1. Foreclosures

A foreclosed property is the result of a borrower’s failure to keep up with their mortgage obligations. Each state’s foreclosure laws may differ, but most will commence a foreclosure filing when a mortgage goes 90 days delinquent.

There are free websites dedicated to listings of foreclosures and properties in various states of ownership. Consider these options –


Read Also: Foreclosure.com Review


2. Auctions

A real estate auction is the way in which a seller (homeowner, lender, government agency, homebuilder, etc.) can sell their property in a public forum. Auctions represent great opportunities for real estate wholesalers because the investment property is generally distressed, well-priced, and in disrepair.

Auctions prices typically start at a price that covers the remaining balance on the defaulted loan, but very often, the final sale price exceeds an opening bid.

Be prepared, as this will help you to avoid jumping into a wholesale deal that you might have the smarter judgment to have passed on. And most winning auction bids require a cash payment! The Treasury Department’s website is a great place to get acquainted with auctions and check out some available wholesale investment properties.

Other federal and quasi-federal agencies offer these auctions –

3. Local Marketing

A local marketing effort can often be a great way to start and develop a database of properties to utilize for current or future wholesale real estate market deals. There are affordable marketing options to catch the attention of homeowners or sellers who are looking to unload a property off-market properties. 

Marketing can take on many forms – from local T.V. advertising to simple bandit signs; there are many cost-effective ways to attract potential new business. Bulk order bandit signs of getting the best price per sign.

Note: however, the key to a successful bandit sign is the placement or positioning of the message.

The reality is that a sign placed at the right intersection may be more effective than some of the more traditional ways to find wholesale properties. Other options include a magnetic car sign or door hangers, to name a few.

4. Family & Probate Attorneys

Visiting local attorneys who specialize in family or probate law is a smart way to find wholesale properties because these legal professionals are often facilitating the sale of a property that is due to a death, divorce, or separation. These property sales are often last minute and defined by a sense of urgency. There are online opportunities as follows –

  • USprobateleads.com -the price of these probate leads depends on the quantity but is generally several hundred dollars to obtain 50-100 leads.
  • Successorsdata.com – which is available for $99 per month.
  • Batch Leads – base plans are offered monthly or yearly or batch tracing paying for each lead. There are higher-level plans for serious investors.

5. Direct Mail

Direct mail – through the U.S. Post Office has been a real estate marketing staple for decades because it offers the recipient a higher trust factor. Many people dismiss direct mail as a marketing technique of a bygone era; however, recently, a research survey revealed that direct mail had a higher Return-on-Investment (ROI) than both online display ads and paid research.

Sending direct mail, sometimes known as admail, requires creativity but often has less competition than digital alternatives. Fortunately, the modern marketplace offers many choices (postcards or brochures, etc.) of eye-catching ways of delivering your message. Consider offering a promotion, and always include a memorable call-to-action (CTA).

The cost of direct mail is contingent on the type, size, and amount of direct mail included in the campaign. Be sure to define a target market accurately and do a few test runs before committing to a larger investment.

6. Using Paid Data Resources

Some companies specialize in compiling and customizing lead generation lists. These lists can be used to locate a motivated owner who wants to sell their wholesale investment or rental property. Examples of these paid data resources include –

  • AgentPro247– offers data through a subscription or simply in $20 increments.
  • CoreLogic’s RealQuest & Property Data Solutions – a database that covers nearly all of the nation, offers a free seven-day trial and then several levels of subscription.
  • CoreLogic’s ReboGateway – offers lists that target tax defaults, FSBOs, divorce or default notice, etc. The cost is about $400 per year, with multiple zip codes adding to the yearly fee.

7. Search For Pre-Foreclosure Homes

A pre-foreclosure home is one in which the final foreclosure proceeding is in a pending status. It is a time that begins when the lender files a lis pendens (for a judicial foreclosure) or notice-of-default (for a nonjudicial foreclosure).

Property deals that fall within this status are also considered a potential short-sale. Note, though, that this phase does not offer a lot of time for property owners who want to save whatever equity may be left. This is the reason sellers facing a pending foreclosure are highly motivated, with plans and hopes to sell quickly before the foreclosure is finalized. Pre-foreclosures are available across many websites that include –

                                                                      

How To Find Wholesale Properties Online?

The digital landscape offers many resources that can be used to access potential wholesale properties –

  • Expired Listings – expired listings offer an excellent opportunity to access motivated sellers with the potential to generate revenue quickly. Simply googling an address can offer tremendous and valuable property data and, therefore, opportunity.
  • Create a Wholesale Real Estate Website – be creative and make sure your website is appealing, easy to use, and easy to find.
  • U.S. Department of Veterans AffairsVendor Resource Management offers available properties that can be filtered by state or city, etc.

                                                                      

How To Find Wholesale Houses Near Me?

Most wholesalers begin their careers with properties in local neighborhoods, mostly because of the property’s proximity and the familiarity these neighborhoods offer. Consider these options that can be used to find wholesale houses in your preferred neighborhood -

how to find wholesale properties near me

Hold A For-Sale-By-Owners (FSBO) Workshop

FSBOs have long been an excellent resource for real estate investors. FSBOs are typically looking to avoid pricey realtor fees, so they are usually ready to deal.

Consider developing a workshop that offers actionable and valuable advice to FSBOs. This workshop can be held in a hotel, local public facility, or even a restaurant. Advertise locally or target homeowners who might benefit from participating in the workshop. The next deal may be sitting in your next seminar.

Driving For Dollars

Although somewhat counterintuitive in the modern digital age, the age-old driving for dollars technique has been used by many successful real estate wholesalers and investors. It simply involves driving around a defined area, noting those properties in disrepair.

The fundamental principle in this regard is to find those homes that are unkept, which are indicative of overburdened homeowners who may be interested in selling at a price below market value. 

 These are classic signs of distress -

  • Windows that are broken or boarded up.
  • A home damaged by fire or water.
  • Unsightly Trash.
  • Overgrown bushes & weeds.

Plus, any other signs that reveal a purposefully neglected property. Chat with the neighbors who may have a personal interest in making sure the distressed property is sold to another owner – someone who will take care of the current eyesore.

It is important to keep data organized and current. Organizing potential properties can be done in a simple spreadsheet or with software like PropStream – which offers a free trial period. The costs associated with Propstream depend on the size of the wholesaler’s operation and intended objectives.


Read Also: PropStream Review | Real Estate Skills


Networking Events

Part of finding a local wholesale property means becoming a part of the fabric of the community and this gives you an advantage if you manage to build up your real estate network. In addition to meeting potential wholesalers and real estate professionals, there is a lot to learn from other more experienced wholesalers attending these events.

Check out local real estate meetups, social media events, local networking events, or investment clubs, among others. Proactively engage real estate licensees who may become future colleagues.

Connect With Local Banks

A smaller lender may be willing to share their foreclosure lists with trusted professionals. These properties offer great opportunities to grab a wholesale property before they hit the real estate market and strong competition from other investors.

Cold Calling

Although not a technique for everyone, if you have an affable nature, try cold calling a private money lender or potential seller. The thing about wholesaling houses is that a potentially profitable deal can show up at any point in time!


Read Also: Wholesaling Cold Calling Script: The (ULTIMATE) Guide


                                                                      

How To Find Distressed Properties To Wholesale With No Money?

To maintain a consistent flow of wholesale property opportunities, a real estate wholesaler should have several deals working at various stages – from lead generation to assignment to closing. There are two primary ways to ensure a steady stream of leads –

  • Working with a real estate agent who is a real estate licensee. This professional is privy to property sales information through the MLS.
  • Building a network of real estate professionals, investors, end buyers, or cash buyers.

The internet has various free marketing channels, like Craigslist, that may offer a golden opportunity for a wholesaler.

If you are creative and have the skills, put together a short video (there are free services like Animoto) explaining how you can help a seller with an urgent need to sell.

You can also check out this quick video below on how to find cash buyers online for free!

                                                                      

How To Find Wholesale Deals That Will Turn A Profit?

how to find wholesale properties profit

Real estate wholesaling is a low-risk strategy compared to other real estate investment techniques. This does not mean that wholesaling houses is a slam-dunk and done without effort. On the contrary, wholesalers with the ability to appropriately evaluate potential wholesale properties are the ones that tend to be most successful.

Before a wholesaler makes an offer, they must first understand the laws and regulations that govern the area in which they work. Then, a wholesaler must “crunch the numbers” to calculate potential profits and return on investment.

The profit a wholesale deal generates equals the difference between the original purchase price and the price of the home denoted in an assignment of contract - or the price delineated in a completely new real estate contract.

Wholesalers and flippers tend to follow industry-standard investment criteria – known as the 70% Rule.

For example, a wholesaler contracts a home priced at $300,000 with an After Repair Value (ARV) (future market value) of $600,000.

Assigning or selling this rental investment property at a price above the $300,000 contracted purchase price would fall within the established investment criteria. House flipping experts look for distressed properties priced with a price tag that is no more than 70% of the ARV. So, in this example, the maximum price (@70% of ARV) would be $420,000.

As a result, a wholesaler would likely have the opportunity to assign their equitable interest to an alternative buyer at any price above the contracted $300,000 but below $420,000 – which provides impressive profit wiggle-room. 

The above analysis is critical to understanding the maximum allowable offer (MAO) for any particular property.  This analysis is not as simple as it sounds. While it is imperative to check similar properties in the neighborhood (called real estate comps), this is not the only applicable factor because specific properties –

  • Will need renovations or repairs for the wholesaler’s end buyer (a fix and flip buyer), who will need to make a profit when making the property saleable at the retail level.
  • Require a few carrying and closing costs (like real estate property taxes and insurance) until an Assignment of Contract is issued or a double closing occurs.
  • Will have resistant sellers, so learning how to approach a home seller is essential.

                                                                      

Final Thoughts On Finding Wholesale Properties

Finding suitable properties is a critical part of closing a successful real estate wholesale deal. Once you find a property that meets your investment criteria, you must be ready to move quickly to avoid losing the deal to another wholesaler waiting in the wings.

Wholesaling offers these benefits –

  • Properties can be found in most markets across the country.
  • A reduced investment timeline and, therefore, reduced risk.
  • No credit is involved in closing the deal with an assignment of contract.

Be Transparent & Do Due Diligence

Real estate wholesaling requires transparency, which builds professional trust. 

Every month will be different. Some months may provide a viable investment with ten leads; other months may require twice the amount. But note, once a wholesale deal is located, the effort becomes completely worthwhile.

Before taking a leap of faith, new investors should take some time to learn about how to wholesale and flip houses from the MLS. By staying on top of market metrics and developing a strong potential buyers list, you can begin to generate a steady stream of profit-making wholesale deals.

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