I’ve wholesaled many hundreds of properties and developed many ways to find the best deals which I could get for the absolute lowest prices with minimal marketing expense. A wholesale deal is where you find an old, run down property, get an option contract on it, then sell your contract or the house to an investor who wants to rehab it. You don’t need to buy the house, get a loan, have good credit, or do any repairs when you do wholesale deals… yet you can make substantial profits quickly.
Following are my top 5 ways to find super cheap wholesale deals.
1. Word-of-Mouth – The very first wholesale deal I got was because I told everyone I knew that I was looking for old, run down houses. My son’s best friend’s Mom knew a guy at work who had inherited 13 run down rental properties. I got a contract on just one of them, made $8000 a few weeks later and never looked back. So, tell everyone you know what you are looking for and offer to pay a referral fee.
Besides telling everyone you know, you need to be a moving billboard to tell the world too. Get a set of magnetic signs made for your car, one for the driver’s side door and one for the passenger door. If you have a pick-up truck, get a sign made for the tailgate too. The signs might say We Buy Houses or Sell Your House Fast. I’ve bought many houses because I had the signs on my truck. Often, when I stopped to get gas or parked in the Walmart parking lot, people would stop me to tell me about a problem property they needed to sell fast.
2. Bird Dogs – When I first started wholesaling, I’d drive around looking for old run down houses, jot down the address, then send a postcard to the owner if the house was vacant (which it usually was). It was a lot of work but I consistently found deals this way.
My business doubled when I recruited the Mom’s at the Mother’s Day Out program at our local church to go out looking for properties for me. Instead of just me out looking for properties, all the sudden I had 50 people out looking for run down, vacant looking properties. I agreed to pay them at least $500 for each house I bought. Often, I gave them much more to encourage them to find more deals for me.
Then, when I ran an ad on Craigslist to recruit property-locators, my business doubled again.
The more eyeballs I could get out there looking for properties for me, the better. This also freed up my time tremendously.
3. Retiring Landlords – The older landlords get, it seems the less they care about keeping their properties rented or even in a habitable condition. I’ve bought many “package deals” of 5, 10, 20 houses or more from retiring landlords. Often, one property will show up on the Code Violation list, then I check the tax records to see if the owner has other properties.
I’ll simply get an Option on all properties then sell them one at a time or with a Magic Bus. A Magic Bus is where I invite 20-50 buyers to go riding around for a day to look at the properties I have available for sale. I’ll sell each house to the Highest Bidder. It’s a fun and great way to make a ton of money in 1-2 days. I’ve made as much as $120,000 doing a 2-day Magic Bus. (Get a free Special Report about doing a Magic Bus in the CashFlowDepot.com member’s area)
Retired landlords are often very open to selling with seller financing, usually with zero interest and great terms. This makes it possible for you to sell the property to your buyer with seller financing which will increase the price and your profits. If you don’t ASK the seller to sell with seller financing, you won’t get it. Just ask!
4. Code Violation Lists – Code violations have various degrees. What you’re looking for are properties which have been condemned or “red tagged”, this means that no one can live in the house until certain repairs are made to make the house safe again. This is where the absolute best wholesale deals can be found. Buying at 80-90% below market is common with red-tagged properties.
There are several different ways to get the Code Violation list. Many cities will sell the list for 10 cents a page. There are usually 50 addresses on each page. Many of these addresses will do you no good because they are not “Red-Tagged” properties. Ask Code Enforcement what the various codes are on the list. Only focus on red-tagged properties.
In Dallas, Code Enforcement sells a CD with 8500 “red-tagged”properties for $50.
You’ll only get an address from the Code Violation list, so you’ll need to look up the owner in the tax records. Then send a postcard. Be sure to include “do not forward, address correction requested” on the front of the postcard. This is so you can get the new address for the owner. Another way to find illusive owners is to talk to neighbors next to the situs property.
Some city’s publish the Code Violations in a local newspaper or online. Most all cities have a monthly hearing where they summon owner’s with Code Violations. Find out when the hearing is and go with a stack of Contracts.
5. Property Managers – Property managers sometimes know of landlords who want to liquidate their entire portfolio. Of perhaps the landlord died and the heirs don’t want the rentals. Find a list of property managers in your area by going to www.Narpm.org. Then, call, email, or send a letter to ask if they know any landlords who want to liquidate. Get an option on one or all of the properties so you can sell to investors on your Buyer’s List.
There are many other ways to find great wholesale deals but the five ways listed above are what has worked best for me. My book FLIP DEALS will give you more details about wholesaling properties
What’s your best source for wholesale deals??
Best of Success… and Freedom,
P.S. The BIGGEST Sale EVER at CashFlowDepot is November 23 to December 1. See details at BIGGEST SALE EVER