The real estate investing business is full of opportunities. As perhaps the greatest thing about investing in real estate, investors can realize success no matter which exit strategy they choose. Essentially, two people can have success doing two completely different things. However, regardless of your exit strategy, the ability to network and gain access to deals is critical. One of the ways to do this is by working with wholesalers. Of course, some wholesale deals are better than others. But if you give yourself enough opportunity, you will eventually find one that works for you. A strong base of wholesalers can help quickly grow your business. Just consider that not every deal may be as good as it appears.
The first part of working on wholesale deals is finding them. If you spend any time at real estate investing events or local networking meetings you should be able to find multiple wholesalers. People that wholesale are only as good as the network they build to get rid of their deals. They want to work with you just as much as you may want to work with them. It will take some time to develop a relationship and a feel for what each side has to offer, but it all starts with networking. If you rely on just one person for wholesale deals, you may not see a new deal for months. The more wholesale deals you have access to, the greater the chance you will find one to move forward with.
It is the job of a wholesaler to present their property in the best possible light. They will often make the property appear to be the deal of the century. Regardless of how nice it may appear, you need to mind your own due diligence. This means spending the time, or money, to find out as much as you can about the property. You need to fact check the tax amount, repair estimates, estimated after repair value and everything else associated with the deal. If you are buying with the assumption of one value in mind and it turns out that this number was off, you could be scrambling just to break even on the deal. You also need to look at the title to see if there are any liens and encumbrances. The wholesaler is getting a good deal and passing that along to you. In most cases, there is a reason for this. If you do not find this information, you are asking for trouble.
If you find a deal that you like, you need to be prepared to act quickly on it. This means having funds and documents in place to make your offer. In most cases, you may be competing with other investors. Remember: those who can act quickest will get the deal. This doesn’t mean you should cut corners, but after you make a determination on the property you need to act. If you have to wait a few days or longer to get around to making an offer, the deal will probably not be there. Whether it is a proof of funds letter, transferring money or getting your attorney in place, these tasks should all be done as soon as you are ready to act. A wholesaler will often work with investors that they know will close if they like the property. If you show that you are serious, you will probably be put on the top of any wholesalers list and in turn get access to more deals.
You can get emails from a wholesaler for months without finding a deal that may be a good fit, but all it takes is one to build a relationship. It is important to stay in contact with everyone that has deals for you. A simple return email or a list of what you are looking for in a property can get the ball rolling. If you are ambitious enough, you can sit down for a cup of coffee or lunch to reinforce what you are looking to do. If you quickly delete the emails without looking at them, you are not taking advantage of a golden opportunity to find new deals. Not every deal will work for you, but you need to constantly grow each relationship and do the little things.
After you close a deal, it is important to send a follow up email or message thanking the wholesaler for the opportunity. It can be hectic after you get a new property and you may spend weeks working on a rehab, but you need to show your appreciation. Before you get caught up with the next deal, you need to take a step back to consider how you got the last one. Regardless of whether the deal was a home run or not, it is still a deal that you made money on. Sure, the wholesaler made money too, but if you reach out to them after you close they will consider you in the future. If you can slowly build trust and a solid relationship, you may get the first crack at the deals they have. Something as small as making a phone call can help do the trick.
The more lead sources and access to deals you have, the more deals you can close. You may not get all your deals from wholesalers, but the ones you do can be very profitable.