How To Find The Right Deals
A Brief Overview of How to Find Real Estate Deals
People who are interested in finding out about real estate wholesaling typically have three major questions. They want to know:
• Is this really something I can do without any affiliation with a bank or major funding organization?
• Where do I find deals?
• Where do I find buyers?
Breaking Down the Deal Types
In our real estate investment course, we cover all three of these topics in depth. For now, let’s take a look at where you can find deals. There are four major types of real estate transactions; these are sales of land, commercial properties, single-family residences and multi-unit residential complexes.
Single-family residences, obviously, would include buildings that provide a home for one family, but this category also includes duplexes, triplexes and even 4-plexes. The single-family residence category provides properties that are the simplest to buy and sell and are overall the easiest transactions to conduct so, if you’re just starting out, we recommend that you do at least your first couple of deals exclusively with these type properties.
Get in That Low Cost Bulk Shop Mentality
As with any other kind of wholesale business, you want to be dealing in bulk transactions which are available below market price. Typically, if you’re going to get a property at well below market price, it’s going to be because the property or the property’s owner is distressed. A distressed physical property often results from the financial distress of the owner.
There is some wholesaling that goes on with upscale single-family homes, but this is by far the exception rather than the rule. In general, a nice house in a good neighborhood that has been well maintained, is going to sell for market price. Homeowners either have a mortgage to satisfy or consider the property a significant investment and are not willing to take a loss. These properties will not be what you’re looking for when setting out to find property for your wholesale transactions.
Stay in Town for a While
One of the most common types of property that we have had wholesale success with is abandoned units in urban areas. As a wholesaler, you will need to be dealing with multiple properties at any given time and you do not want to waste your days driving all over the countryside, or even all over the county, in search of properties. By focusing on an urban area you will have more properties to pick from, and they will be in closer proximity to one another.
If you think you are ready to start real estate investing, you have probably noticed that there are certain areas that seem to have a lot more property for sale, for rent or abandoned than you see in other areas. While it’s not good news for homeowners in those neighborhoods of high sales and low occupancy, it is very good news for real estate wholesalers.
You will need to find the owners of those properties. This can be accomplished with a bit of online research as well as by asking around the neighborhood. Find a way to directly communicate with the owner to find out if he or she is interested in selling the property at a reduced rate to get out of it quickly. While many owners will perceive this as an unacceptable loss on their part, others will be only too eager to be divested of responsibility for their distressed property.
Sensei Gilliland is a husband, father, real estate investor and entrepreneur. He is also the founder and CEO for Black Belt Investors and the co-founder of Riches In Niches, a real estate company that offers investments, education and consulting. To learn more about Sensei Gilliland or to sign up for his free Newsletter, visit www.realestaterichesinniches.com .