How To Find Wholesale Properties In Your Area

Several real estate exit strategies exist in this industry, all of which offer a unique perspective and their own way of going about things. However, few are more attractive to new entrepreneurs than learning how to find wholesale properties. While profits may not be as large as a rehab, there is significantly less risk involved and the turnaround period is dramatically shorter. More importantly, finding wholesale deals isn’t nearly as hard as many people make it out. If you want to find wholesale properties in your area, I recommend trying the four strategies outlined below.

4 Proven Strategies For How To Find Wholesale Properties

Investors need to learn something in the early stages of their careers: one of the easiest ways to find wholesale properties is to borrow strategies from those who have already mastered the art of wholesaling. There is absolutely no reason a new investor can’t learn from their predecessors. After all, investors have known how to find wholesale houses for quite some time; there’s no reason to do things differently. Therefore, the best way to find wholesale properties is to exercise the strategies already working for investors around the globe. It is worth noting, however, that there are four ways to find wholesale properties that have proven they belong in a real estate investor’s arsenal more than any other:

1. Seek out foreclosures and pre-foreclosures
2. Attend real estate auctions
3. Talk to banks about repossessed inventory
4. Drive for dollars

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1. Foreclosures

Those that want to find wholesale properties could do a lot worse than the typical foreclosure. In fact, few opportunities are more worth pursuing than those that witness homeowners fall behind on mortgage payments. If for nothing else, homes at risk of being repossessed by the bank have proven—time and time again—to be a viable source of deals.

It’s worth noting that the nature of a foreclosure is particularly attractive to those that want to find wholesale real estate properties. But to understand why you must first have a firm grasp on the foreclosure process itself. In their simplest form, foreclosures are the result of a failure to keep up with mortgage obligations. Those owners that aren’t able to pay their mortgage on time are at risk of losing their home to the very bank that provided the loan in the first place. While each state has its own guidelines, it’s safe to assume the foreclosure process will start 90 days after the first missed payment. At that point, the owner is faced with a big decision: default on the loan and lose the home to the bank or conduct a short sale.

It’s worth noting that short sales typically result in discounted prices, as time is of the essence for the property owner; they need to sell in a timely fashion to fulfill their obligations to the bank. More often than not, selling at a significant markdown is the only way to do so. And as an investor hoping to find wholesale real estate properties, there is no reason you can’t be the one to acquire such a deal. Mind due diligence and familiarize yourself with the foreclosure process, and you may find some of the best deals out there.

2. Auctions

In trying to find real estate wholesale properties, foreclosures are often your best bet, but they are far from your only option. Anyone with the ability to navigate property auctions could find themselves in the presence of some great deals. In fact, some make a killing on acquiring properties solely from https://transparentpharmacy.net auctions. Not unlike their foreclosure counterparts, properties bought at auction can often be had for an attractive discount. It’s not uncommon for houses placed on the auction block to be priced at a value equal to or less than the remaining balance on the mortgage. More often than not, that represents a fantastic deal.

Like foreclosures, understanding the discounts that may be had at auction stems from familiarizing yourself with the process. First and foremost, there are two ways a house can be placed up for auction: Either the homeowner has neglected to pay property taxes, or the property itself has gone into foreclosure. Regardless of the reason, each of these scenarios represents a great opportunity to procure a deal. That said, those that want to find wholesale real estate properties should consider taking a look at auctions.

I recommend doing your homework upfront in the event you want to attend an auction. Remember, not unlike any other acquisition strategy, there is risk involved in attending an auction. Mitigate your chances of running into complications by minding due diligence. It’s also worth noting that most auctions will require a cash payment. Above all else, know what to expect the next time you look for wholesale real estate properties at an auction.

3. Bank-Owned REOs

This next trick to help you find wholesale real estate properties is contingent on whether or not the previous two acquisition strategies result in the sale of a property. Subsequently, to acquire a bank-owned property (or real estate owned REO), the property mustn’t find its way to an end-buyer. As the name suggests, bank-owned REOs have been repossessed by the banks and failed to either sell at auction or result in a short sale.

It’s worth noting, however, that banks aren’t in the business of holding on to nonperforming loans; that’s why they will take the short sale option when the opportunity presents itself. If for nothing else, banks don’t want to hold on to properties that aren’t making them any money and are (more often than not) happy to sell them for even a slight profit.

Just because it is an underperforming loan does not mean the bank will seemingly give it away. After all, they are in the business of making money too. For this reason, investors are advised to hire an inspector. While not required, the critical eye of an inspector will let you know exactly what you are looking at. Conducting an inspection may even reveal “characteristics” that allow you to lower the bank’s asking price.

4. Drive For Dollars

Sometimes understanding how to find wholesale deals requires investors to go against their own intuition. In particular, one of the most effective ways to find wholesale deals is to avoid the internet, the one place capable of warehousing all of the wholesale data in the country. That’s not to say investors should avoid the internet altogether, but rather that it’s not the only place to be looking for wholesales.

In addition to the internet, investors should take a step outside and drive the neighborhoods that interest them the most. Doing so could result in the discovery of some potential wholesale candidates. Consequently, investors who identify homes that appear distressed may increase their odds of finding a wholesale deal. Of course, not all “distressed-looking” homes are potential wholesale candidates, but focusing solely on distressed homes could increase one’s odds of finding a deal. The idea is that unkept homes that clearly require more attention than they are getting are a burden on the homeowner. Therefore, the owner may be more willing to part ways if they are in some form of distress.

To increase the odds of finding a distressed home, keep an eye out for:

• Boarded up or broken windows
• Water or fire damage
• Unsightly piles of trash
• Overgrown weeds and bushes
• Any other signs which suggest the property may be vacant or purposefully neglected

Listed Vs Unlisted Wholesale Property Leads

Wholesale real estate properties are a great way for investors to get started in the investing industry. However, there are a few things investors need to know before jumping in, in particular, the difference between listed vs. unlisted wholesale property leads. As their names suggest, there are differences between the two, as noted below:

• Listed Properties: These are properties that can be found on the Multiple Listings Service (MLS) and are typically represented in one of three ways: Properties owned by private sellers, properties in pre-foreclosure, and REO properties (bank-owned). Since they are listed on the MLS, it shouldn’t surprise anyone to learn that these leads will come with the most competition; however, there are also more of them. These will make up the majority of most investors’ wholesale real estate property leads.
• Unlisted Properties: As their name suggests, unlisted wholesale real estate properties can not be found on the MLS. These often represent the biggest profit potential of the many wholesale listings but require additional effort and expense to locate. Since they aren’t on the MLS, they will have less competition, but they will prove harder to find, which is why investors will need to follow a trusted system for learning how to find wholesale properties.

Summary

If you want to find wholesale properties, I recommend trying as many outlets as possible. After all, what is wholesale real estate, if not for a numbers game? However, I have had tremendous luck with the outlets I mentioned above. Each offers investors the unique opportunity—provided they mind due diligence—to find discounted properties that fit the criteria to wholesale.

Key Takeaways

• There are four strategies, in particular, that will help investors find wholesale properties.
• Understanding how to wholesale real estate starts with learning from those who came before you.
• Wholesale real estate for sale can be found in just about any market across the country.