How to Find Wholesale Real Estate 101 - Connecting With Successful Real Estate Wholesalers
There are many ways for Canadian real estate investors to find their next property. A lot of people choose to partner with realtors, or they might rely on the word of mouth from their networks of friends and family. Hearing about hot new properties, great bargains or even new areas that you hadn’t considered is all part of the information-gathering that goes along with real estate investing, so you should never neglect any of these sources.
One other source that many investors use is real estate wholesalers. These folks provide a unique service that many investors might not even know about but can be a major source of leads on hot new investment properties. The guide that follows will give you an introduction into what it is that wholesalers do, and how to find wholesale real estate by incorporating them into your real estate investing business.
However, before you get distracted trying to learn how to find wholesale real estate, it is important to take the time to talk with a mortgage professional first.
Then, by working with them you can learn how much you can afford and use that to guide which properties you may want to consider buying wholesale.
So, if you are ready to get started, we would like to offer you a free strategy call with us at LendCity. All you need to do is click the link below and schedule yours today.
What is a real estate wholesaler?
A real estate wholesaler is a part of the investing world unlike any other and their skills are you key to learning how to find wholesale real estate. Their job is to compile hot listings that they find or come across and then transfer these properties to interested buyers. They usually find these deals by mining their sources – typically information from networks that they’ve built up over years in the industry, or from direct marketing materials.
A lot of the time these directly marketed properties are actually off the market, so wholesalers have insight into properties that many other sources of real estate listings might not. In that sense, they provide a valuable compilation of information to help others learn how to wholesale real estate. So instead of worrying about how to find wholesale real estate database, your wholesaler will be the one to provide hassle-free wholesale real estate leads.
Essentially, they are the professionals who know how to find wholesale real estate and bring it to you as the investor.
How do wholesalers operate?
Typically, the process for a wholesaler follows a general pattern. They will be informed of a property that they find interesting and they will take control of it – sometimes only getting it under contract. Wholesalers can also find leads on properties by approaching property owners and offering private cash deals for their homes.
They then send this deal to their list of buyers or real estate investors across Canada, all of whom have shown interest in learning about flips or rentals in certain areas. Interested investors who receive these postings are then able to express their interest, and if they submit a winning bid then the contract is transferred to them by the wholesaler.
The wholesaler makes their money on these deals by marking up the properties for a certain amount when they ultimately flip it to the final real estate investor. The investor who purchased the property often has an eye on flipping the house and turning it around for a quick profit.
So, unless you are willing to pay that markup for the property, your goal may not truly be to learn how to find wholesale real estate and instead how to find off-market deals first.
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The advantages of working with wholesalers
Working with wholesalers can be an unorthodox way to dig up some great deals. You could also stand to benefit financially in many ways – the deals that you can stand to gain from can often represent significant savings and real benefits. The caveat to this is that every single deal is different, and the vast majority will not strike you as attractive for one reason or another. You both must trust your instincts and ensure that you’re doing the appropriate background work and research into every deal that you investigate.
Another pro of working with a wholesaler is time – you can stand to save a lot of it because often, the wholesaler has already done the hard part. They find a property that could represent a valuable investment opportunity, and at that point, it’s up to you to find out more information and determine if the deal is the right one for you.
Finally, wholesalers are all about relationships. They are almost clearinghouses for information about the real estate market, what’s about to go on and for how much, so they can be a great person to connect with. This type of networking and information exchange is a big part of any successful real estate investor’s modus operandi.
The drawbacks of working with wholesalers
You should know before you start looking that working with a wholesaler is far different than working with an aggregator like an MLS system. If you’re looking to purchase a property from a wholesaler, keep these points in mind. First of all, you will likely not have as much control over various administrative tasks and deadlines, like the deadline to close or other similar hurdles. You are, to some extent, at the mercy of the wholesaler when it comes to these issues, so you might not have as much flexibility as you would on a similar one-off deal.
Another way that working with a wholesaler costs you the flexibility is that they frequently require fairly stringent conditions. This usually means that you’ll be expected to provide a non-refundable deposit, and an inspection of the property is usually out of the picture. To some extent, it’s a leap of faith, which is not something that every real estate investor in Canada is comfortable with.
How to Find Wholesale Real Estate Professionals
Now I know what you are probably preparing to search at this point:
"How to Find Real Estate Wholesalers in My Area" or "How to Find Wholesale Real Estate Leads"
Finding a real estate wholesaler usually starts with looking for their advertising and marketing. You’ve likely seen their advertising and not even realized it – they’re usually the ads offering cash for houses on social media or out in public.
You can also get into the networking game by attending real estate investor meetups in your area, which is a great way to meet fellow pros. Finally, there’s nothing that can replace good old gossip and word of mouth. Don’t be shy about asking your connections whether they know of a good wholesaler and whether they’d be willing to put you in touch with them.
You’ll know you’ve found a good wholesaler when you’ve met one who has a great track record (ask them to prove it) and just gives you the right feeling. Working with a wholesaler can be a great way to track down deals you might otherwise not know about, but always be sure to do your legwork, use caution and trust your instincts.