Wholesaling Real Estate - Finding Buyers (Part 1 of 3)
By Eric Medemar

Wholesaling real estate is one of the best ways to begin making money in real estate without the need for capital or credit. In part 1 of this series, I will start laying out some of the best ways that I have found to locate buyers for your potential wholesale deals. These strategies will also work for real estate bird dogging.

1. We Buy Houses Signs I call every single one of these signs that I see, I actually keep a note book full of numbers and info that I find out about these companies when I call.

I usually ask them whether they are still buying, what they are looking for, what percentage up FMV (fair market value) they are typically paying, and what areas of town they want to buy in.

While I have them on the phone I also ask them if they wholesale out any of their homes, if they do then I ask them to call me when they have something good. I tell them that if the deal is right I can close in less than 2 weeks with cash.(I can do this because I have other buyers already in place to buy their deals, sometimes these buyers could be other cash for your house buyers)

Here is a sample of a deal that I put together using this.
1. I called a we buy houses sign
2. Found out where they were looking
3. Put a home under contract for $52k in that area
4. Called them and let them know.
5. I signed a 6 month lease option with them for $64k
6. I closed the home.
7. The lease option started
8. He sold the home
9. We close this week, I make about $12,000 (I also made commission when I bought the house, because I am a realtor)
10. He makes around $12k.
11. Were all happy.

2. Call realtor's I call realtor's and find out if they have any cash buyers that are looking to buy some wholesale deals. It varies on what I offer to pay them but typically I offer 10%-20% of my profit, or a flat 2-3% fee, each time the buyer they have given me buys a home. It creates a win- win, I get a buyer and they get paid whenever their buyer buys a home.

I offer the continuous pay because a realtor's worst fear is that they give you a buyer and he buys from you, then when they have a good property to show their buyers they cannot buy because they have already purchased from you.

If the realtor's do not have cash buyers, I tell them that if they bump into any great deals, they should call me and if the deals good enough we can buy with cash and close in less than 2 weeks.( Often times you can use other realtor's buyers to buy another realtor's house and you can make money setting the two up)

An example of one of my clients deals that he ran this way.
1. I called my client about a great HUD deal
2. He liked the deal and put the home under contract for $115k (I made a $4800 commission on the home when it closed so I was happy)
3. We had 60 days to close the HUD home so he started calling realtors
4. He found a realtor with a cash buyer that was willing to pay $122,000
5. We assigned the contract (this is a secret)
6. We went to closing and his buyer brought $122,000 cashiers check.
7. My buyer left with a check for $7,000 ( he used none of his own money, and I found him the house so he was happy)
8. I left with my $4800 commission
9. The realtor who brought the buyer took no commission but got a commitment from his buyer that he would list the home with him when he sold it.

3. Newspaper ads I do not personally use this one, I have clients who have had great success with it though. They simply place a small classified ad that reads "Looking for buyers to purchase homes at 50-70% of true value"

I have picked up endless buyers with this ad though "Free List of 45 foreclosed/distressed homes" call or visit. The reason that I have had so much success with this ad is because anyone thinking of buying real estate would much rather get a free list of 45 then have to call each individual ad. You can have a local realtor put together a list of properties for you and email them to you if you cannot find your own. Then take the list that they send you and email it out to people that respond to your ad. Keep in mind you do not really care about the list that you send, you care about getting the name, phone number, and buying qualifications of responding buyers.

A real life example.
1. I placed my free list ad
2. I got about 30 responses for the month
3. Found one buyer who has paid me over $75,000 in commissions over the next 3 years on deals I brought him.

These were realtor commissions, but if you can find a buyer who is taking the kind of action he was you could seriously line your pockets wholesaling to him.

4. HUD homes this is my own technique that I started using to get buyers just for my realtor purposes. Watch for a great deal on a or any great deal for that matter, then park outside for a few hours and talk to the people going to check out the home. Most of the areas investors will find there way to the property and you can give them your card and be sure to get there info. Tell them that you run into alot of deals and ask them if they would like you to give them a call when you run into something decent.

A personal example.
1. I went to look at a good HUD home that I was going to buy myself.
2. The neighbor came over and wanted to see the home while I was there.
3. I showed him the home and he ended up buying it from me.
4. I ended up making $2500 in commission on it.

If I were not a realtor, I would have simply talked to him and found out what he was willing to pay, then wrote up a wholesale contract, then put the home under contract with HUD, then played the spread.

This was my most recent deal, but I have picked up endless buyers for other homes while parked outside of HUD homes. I call it hunting for buyers. Its kind of like deer hunting with a bait pile. The home is the bait pile and the buyers are all coming to eat.

5. Talk to your current buyers buyer typically know other buyers, ask your buyers if they know of anyone else who is buying (let them know you will only call the referral if they are passing on the property). You also might offer to pay your buyer for a referral fee if one of there people end up buying a house from you. This technique also works great if you have a buyer that only wants to buy in a certain area, then you can call their referral if you have a home outside that area.

Personal example.
1. One of my buyers had too many homes and could not buy.
2. I asked him if he knew anyone else who might be interested.
3. He gave me the number to a cousin who was an even bigger investor
4. I ended up selling 3 homes to his cousin this year, and paid him a referral for each one.

Eric Medemar is a Realtor/Real Estate Investor out of Grand Rapids, MI. Eric currently owns 30+ rental properties, and is the creator of The Ultimate Real Estate Wholesaling System, the program that enables you to duplicate his exact real estate system to begin making thousands real estate wholesaling. You can view Eric's Real Estate Wholesaling Blog at http://www.TheMillionairesBlog.com

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