Wholesale Leads: 11 Strategies To Find Leads For WholesalingSep 01, 2022
Want to venture into the real estate business without using up all your savings or capital? Wholesaling real estate is the way to go.
Unlike other capital-intensive real estate investing ventures, wholesaling won’t have you dipping your hands into your savings jar, and you don’t need to own investment property either.
The real work lies in finding motivated seller leads for wholesaling, something this guide breaks down in eleven ways. It also explores the best lead sources, the number of wholesale leads it takes to land a good deal, and even ways to get free wholesale leads so you can fill up your sales pipeline.
- What Is Wholesaling In Real Estate?
- What Is A Wholesale Lead?
- How To Get Wholesale Real Estate Leads
- What’s The Best Lead Source For Wholesalers?
- How Can I Get Free Leads For Wholesaling Real Estate (4Tips)
- How Many Leads Does It Take To Get A Wholesale Deal?
- Final Thoughts On Wholesale Leads
What Is Wholesaling In Real Estate?
Wholesale real estate is a short-term investment strategy whereby an investor, typically referred to as the wholesaler, contracts and sells a property on behalf of the seller. Real estate wholesaling is often confused with brokering, but these are entirely different investment strategies.
While both involve being the middle man and aren’t capital intensive, a wholesaler must enter into a contract with the seller, agreeing to sell their property for a certain amount by a particular date. They then market it, assign the contract to a buyer at a higher price, and bag the spread, or difference between the seller’s contract-quoted price and the actual selling price, as their profit.
The goal is to sell the wholesale contract on the property before the initial purchase agreement contract with the motivated seller expires and at a higher price.
Wholesalers target absentee-owner, distressed, probate, or pre-foreclosure properties, but they may contract whatever property suits their target profile. Wholesale real estate is one of the best real estate investing strategies due to the lower financial risk and reduced time commitments.
What Is A Wholesale Lead?
A wholesale lead is a prospective motivated property seller. The wholesaler may or may not have contacted them, but depending on their lead generation strategy, they’ll have at least their name, contact, and property information.
Wholesale leads come from various avenues, and it’s up to the wholesaler to identify the most viable or practical lead generation strategy for them.
How To Get Wholesale Real Estate Leads
Now that you know what is real estate wholesaling and what a lead is, here are some lead sources to check out if planning to venture into this industry:
1. Multiple Listing Services
First created in the 18th century, a multiple listing service is a digital database of properties built by co-operating real estate professionals across different regions. It’s available to licensed agents and features listings with comprehensive, up-to-date property data such as:
- Private contact information such as phone numbers of sellers and their agents
- Property features, e.g., number of bedrooms and bathrooms
- Property condition, e.g., distressed
- Past upgrades
- Comps with other homes in the area
- Neighborhood information
The MLS lets users refine their search using filters such as property type, condition, and features such as the number of bedrooms. Instead of spending time on leads that may require a lot of nurturing, a wholesaler can use the data and the filters available to narrow their search and identify motivated sellers, thus speeding up the lead generation process.
Additionally, the MLS is updated with new home listings daily, creating a steady stream of fresh, quality leads for wholesalers. Even better, one can set up MLS to send listings directly to your inbox, further simplifying lead generation.
And because it attracts REI professionals across the region, and some of its listings reach third-party sites like Zillow and Redfin, an MLS also simplifies selling the same wholesaling properties you find on the platform by allowing you a wider reach. It also serves as a unified space where real estate investors, agents, and other REI professionals can network, proving beneficial, especially for newbie wholesalers.
More importantly, the MLS allows you to enjoy all these advantages for free as long as you’re licensed. To find quality wholesale leads using the MLS, start by identifying homes that match or fit your target wholesaling property profile.
Reach out to the listing agent and explain the perks of working with a wholesaler, craft a contract, and then market it to find buyers before the agreed period is over.
Read Also: How To Get MLS Access: The (Ultimate) Guide
2. HUD Offers
Don’t have a license to access the MLS? Consider checking out the HUD site for leads. It features homes originally bought using an FHA loan but reclaimed by the U.S Department of Housing and Urban Development as foreclosed properties when owners fail to keep up with their monthly mortgage payments.
These homes, sometimes known as REOs (real estate owned), are later put up for sale at foreclosure auctions at discounted prices. If they fail to sell at the foreclosure auctions, REOs are re-listed again at deeply discounted prices, allowing wholesalers an investment opportunity with great profits.
Access to the HUD site is free and available to all, presenting wholesalers an opportunity to generate qualified leads and enjoy significant profits from each deal.
3. Online And Offline Auctions
Online and offline auctions are a great source of motivated wholesale leads. They attract property owners looking to quickly sell their properties due to financial constraints, an impending move, foreclosure, or other personal reasons. They use these channels because selling to the highest bidder is usually fast and more effective than listing the house and waiting for buyers.
Besides being a great lead source, these auctions expand your buyer network for wholesale properties because they also attract investors and individual home buyers countrywide.
Before you scour an auction for leads or try to find a buyer for a wholesale property at one, note that not all auctions are the same. Some are classified as absolute, meaning the property is only sold to the highest bidder regardless of the property’s market value. Others are considered minimum bids, meaning the property owner sets the minimum amount at which bidding wars can begin.
Other wholesalers, real estate agents, and professionals in the industry are also a great source of information regarding potential leads. For instance, working with wholesalers in other areas means they’ll gladly tip you off about properties that don’t suit their target profile but fit your ideal wholesaling property.
So, make time to attend local real estate business networking meetings and industry events for a chance to meet like-minded wholesalers and REI investors. Leverage tools like the MLS and foreclosure auctions for networking as well.
Sometimes an excellent wholesaling deal is right outside your door, just waiting for you to seize it. So, start interacting with locals often, particularly property managers in your neighborhood. They’re usually well-aware of what’s happening in the local property market and will readily inform you whenever a home with wholesaling potential is on the market.
Besides property managers, drive or walk around different neighborhoods to see if you can spot wholesaling-worth properties.
As a free advertising website with no licensing requirements, Craigslist attracts thousands of property owners looking to sell their properties themselves. This makes it one of the best places for wholesalers to find for-sale-by-owner leads. It’s also one of the most visited advertising platforms today, with a monthly average of 50 billion page views.
As a result, it’s not just great for finding wholesale leads but also for marketing wholesale properties. To find great wholesale deals on Craiglist, narrow your search using filters like for-sale-by-owner, or search keywords like:
- Must sell
- Will sell on terms
- Seller financing available
- Will consider all offers
- Flexible seller
In addition to wholesalers, real estate agents, and property managers, builders and contractors are essential to your network if your goal is to land quality leads.
They’re often aware of and can tip you off about excellent pocket listings in your target neighborhood. As key industry players, builders will often know and inform you of properties where an owner or another investor had to drop a renovation or fresh-construction project due to financial constraints.
8. Facebook And Instagram Advertising
With Facebook, for instance, you can create lists specifically targeting property owners in a particular area instead of marketing to a general audience. Facebook also features retargeting, which lets you market your wholesaling venture to leads who once visited your site but didn’t act.
Additionally, you can build a reputation on both Facebook and Instagram as an expert wholesaler and have leads you can’t personally reach to contact you.
9. Lead Capture Form
A lead capture form is a landing page created purposely to collect a website’s visitor contact information, such as email addresses and phone numbers. Integrating one into your wholesaling website in exchange for access to an important document or demo allows you to capture leads that might require a little nurturing but may eventually end up offering you one of the best wholesaling deals.
However, lead capture forms work best for sites with high traffic. So, if you’re looking to generate leads using this strategy, you’ll need to put some effort into SEO and promoting your website.
10. Join Real Estate Investment Forums Online
Real estate investment forums like Bigger Pockets and RealEstateInvesting.com attract numerous seasoned real estate professionals and investors countrywide. Here you can ask questions and get answers from a community of seasoned, active REI professionals for everything real estate, including wholesaling leads.
For instance, you can ask about the best markets for wholesaling in a particular region and things to avoid when wholesaling in certain areas.
11. Subscribe To A Wholesaler’s Buyers List
Wholesaling involves finding a wholesaling property and then finding a buyer for it. A wholesalers buyers list offers both. It speeds up lead generation by allowing you access to the wholesaling properties recently listed by other investors and speeds up selling since you can also sell to them.
What’s The Best Lead Source For Wholesalers?
While there are endless lead generation sources for wholesalers today, none beat Multiple Listing Service platforms. The MLS database is so reliable that aggregator real estate listing sites like Trulia and Zillow use it as a primary data source. And while such sites may feature many of the listings you’ll find on MLS, it’s still the better option because it features incredibly comprehensive listings. They showcase property data you won’t find elsewhere, such as:
- Previous and recent property upgrades
- School districts near the potential investment property
- The seller’s preferred mode of financing
- Comps with similar properties
- Historical property data
- HOA paperwork
- Multiple contact information options
With such data at your fingertips, finding quality leads becomes a tad easier since you can seamlessly differentiate motivated sellers from leads that require more nurturing. You can also make unlimited offers, increasing the likelihood of getting responses.
Even better, you can automate your MLS and have leads sent to your inbox, saving time and effort significantly. And since MLS platforms attract hundreds of real estate agents, brokers, wholesalers, and other real estate investors, it allows for easier networking, making your future in wholesaling even smoother.
The best part? As long as you have a license, access to the MLS is entirely free, which technically means free leads. There are many excellent sources for leads, but the MLS is the best for wholesalers.
If you’re looking for a step-by-step process to help you start and grow your wholesaling business without spending a dollar in marketing, check out our brand-new free training on how to find and flip your next house in 45 days or less using the MLS!
How Can I Get Free Leads For Wholesaling Real Estate? (4 Tips)
With no experience and no previous lists to rely on, building your sales pipeline is the hardest part of wholesaling real estate when you’re just getting started. On the bright side, besides the MLS, there are plenty of free sources and tactics you could try for lead generation. Here are a few:
Maximize Pocket Listings And Off Market Property Deals
Off-market properties are exactly that; properties not on the market or any public listing yet. Reasons could vary, but most sellers often withhold listing to maintain privacy, test the market before they list, and avoid increasing its days on the market, thus reducing its selling potential. Real estate agents often have pocket listings that are excellent wholesale leads for investors.
But why go for such properties? Well, it’s a free way to find motivated sellers, and there’s less competition from other buyers, hence higher chances of getting a favorable deal. Additionally, most off-market property owners are usually not in a hurry to sell. This eliminates time pressure, allowing you to find qualified buyers smoothly and relaxedly.
To find quality off-market deals, look out for FSBO properties, consult other real estate agents, maximize tools like Craigslist, browse foreclosure lists, approach homeowners, or check out real estate auctions.
Use Social Media
The average internet user spends about two and a half hours on social media platforms like Facebook, Twitter, and Instagram. Besides entertainment, they use these platforms for other purposes, including selling and buying properties, making them a great source of free leads. The best part about generating motivated seller leads from social media is that they’re often motivated and looking to close quickly.
Even better, you don’t have to look for them. By actively using these platforms to market your wholesaling business, you can build your reputation as an expert, increasing your exposure, so motivated sellers come to you instead.
Drive For Dollars
Consider driving for dollars to get free leads. As the name implies, driving for dollars involves driving around neighborhoods for leads. As a wholesaler, you’ll essentially be on the lookout for properties with the potential to sell, such as:
- Distressed properties
- Homes on foreclosure
- For Sale by Owner
To ensure your efforts are fruitful, start by selecting a target neighborhood. Since wholesaling real estate is a business of finding sellers and then connecting them to a buyer, pick an area you would want to live in.
Consider factors like the crime rate, the education system, and how far the area is from main roads and other vital amenities, so it’s easier to find a buyer once you find a wholesaling property. Always plan your route to avoid driving through the same area twice or missing potential wholesale properties.
Bring your notebook and a pen to note down properties you might come across, and be sure to take pictures. While driving for dollars is a free way to generate leads, there are many subscription-based software with features such as route-tracking that you could maximize to make the task easier.
Put Up Bandit Signs
While being proactive in finding leads is critical to success, you cannot reach every seller. In that case, it’s better to let those sellers you couldn’t get to find you by putting yourself out there through conventional real estate marketing strategies like bandit signs.
Bandit signs, also known as yard or lawn signs, are poster-sized, often brightly-colored signs on stakes typically used by real estate agents to indicate an open house, homes for sale, or any other events related to their business. You’ve probably spotted one with a message like “we buy houses for sale, or sell your house fast.” They’re known as so because they’re illegal.
Although putting them up is a lot of legwork, it’ll be worth your while as they’re not only cost-effective, they draw attention to your business. They’re especially effective in attracting property owners who need to sell fast, such as foreclosure, distressed properties, and for sale by owner homeowners.
To create bandit signs that work, use a handwritten font, bright but straightforward colors like red and yellow, and ensure your message is clear and concise. Since they’re illegal, post your signs on trees or utility poles to avoid being caught and fined. You also want to put them up in areas with heavy traffic, such as highways and busy intersections, to get as many eyes as possible.
How Many Leads Does It Take To Get A Wholesale Deal?
Most wholesalers need at least 100 leads to get a single deal monthly. However, note that this figure isn’t written in stone and may vary based on:
Real Estate Market Conditions
For instance, during the pandemic, homeowners with expensive homes relocated to affordable properties to keep costs down. This meant they had to sell fast while simultaneously looking for a home, creating great wholesaling opportunities.
The Lead Source
Some sources produce leads that take more time to convert than others. For instance, bandit signs are more likely to attract motivated sellers, while lead capture forms attract sellers who might need a little nurturing.
Read Also: 7 Best CRM For Real Estate Wholesalers
A Wholesaler’s Lead Follow-up Strategy
Wholesalers with a good follow-up strategy are more likely to succeed at converting leads into sellers than those who lack one.
How much each lead costs you also varies depending on your lead generation strategy and the wholesaling tools you use. For instance, a wholesaler who solely relies on free lead sources like the MLS will pay nothing, while one who combines free sources with paid ones such as a wholesale buyer’s list will spend more.
Fortunately, the more effort you put in, the more leads you generate, meaning the second wholesaler’s efforts are usually significantly rewarded.
Final Thoughts On Wholesale Leads
Success in wholesaling is a game of numbers. The more leads you have, the higher your probability of getting a deal. And as shown above, for every 100 leads, you may only get two deals.
That is why you must evaluate traditional strategies like cold-calling and direct mailers while integrating digital marketing methods like the MLS into your lead generation strategy to ensure you get at least one profitable deal per month.
We’ve highlighted some great sources of wholesale leads above, including several free options you can use to get started.