A great fear that people who are venturing into the Wholesaling business have is whether or not they are going to be able to sell the homes that they put under contract. Consequently some Wholesalers refuse to get started until they have the buyers and the money lined up. Then they want to know how to put together a wholesale buyers list without anything to sell.

The first thing a Wholesaler should consider when building a Buyers List is how he or she is going to get a wide array of buyers. You should have someone lined up for every scenario of property.

How do you put your list together? Start out by running ads in the local classifieds. I started out by running ads such as the following:

Fixer Uppers- Deep Discounts- Financing Available XXX-555-1214.

An ad like this will get the phone ringing. Then talk to the investors who called about their experiences, where they like to invest, how they pay for their homes, what their exit plans are, and so on. I always want to know the investor I am dealing with. I did not want to talk about property because I had nothing to offer. When our discussion finished, I told them that I did not have anything available for them at the moment, but I would call them when I found something that suited their needs.

As I built up my buyers list, I had a potential buyer for every property that I put under contract.

Another very successful method that I have used to find buyers is to call “for sale” ads; particularly ads that say “newly renovated”. In most cases this will be an investor who has just purchased a home and fixed it up. I call the ad and ask the seller if he or she is an investor. If so, I begin the same rapport as if he or she called on one of my ads. The fact that he or she has a home that is newly renovated, lets you know that you have a real buyer to ad to your list for the area that he or she is selling in.

I frequently teach my students that they can learn more from the “for sale” ads then they can anywhere else. If you study the ads and get to know the players in your area, then you can see the trends and the areas they invest in. If you investigate further you can find out what they pay for homes and what they sell them for.

There are buyers everywhere, in every market. You just need to dig them up, and with a little effort you can have The Ultimate Wholesale Buyers List.

The article shown above is a condensed version of the article “Building the Ultimate Wholesale Buyer’s List” by Steve Cook.  We most gratefully thank the author and Real Estate Investment Club for the courtesy of permitting RentaVenta.com to republish this work.

It surprises many beginning real estate investors when I recommend they get started investing without using their own money.

You’ll never regret learning to buy with no money. It will make you a much more savvy investor for those times you do decide to use your own money or conventional financing.

Money Is Never the Issue When Buying a Property

Many investors think that money (or lack of money) is what stops them from closing a deal. This myth is one of the most limiting things that holds some investors back. Understand that money is never an issue if the deal is right. Say the following words to yourself over and over: If the deal is right, I will find the money!

How Do I Get the Money to Fund the Deals?

Okay, so you’ve got yourself a signed contract on a great cash deal. Now you need to find the funding. Again, the key is that the deal is conservatively very profitable (i.e. will make you money even if you made a few mistakes estimating repairs, etc.) Here are several sources you can use to make that deal a go:

• Use the seller’s existing financing for part of the purchase price. Buying “subject to” you only have to fund the money for the seller’s equity!

• Get a cash buyer at 90% of value and do a simultaneous close or flip your deal to the buyer for a cash assignment fee.

• Sell your contract to another investor, again for a cash assignment fee.

• Borrow the money from a private party lender at an interest rate 3-5% higher than a bank CD and secured by a first mortgage.

• Borrow the money from a hard money lender.

• Tap into a home equity or other line of credit.

• Refinance another property to get your down payment and borrow the balance from a lender.

Bring in money partners to fund the deal. (They get depreciation and you control deal. They secure themselves with a first mortgage for the amount they have in, or if they finance it, they can lock in a second mortgage to protect themselves. You agree they get their entire principal back plus 15% before you split any profits from the resale of the property. You split profit 25-50% to them, the rest you.)

I think you get the idea here. The key is that if the deal is right, you will find the money. Never lose sight of that. The only two reasons why this wouldn’t be the case are fear and ignorance.