I'm going to start a series of blogs to let you, the readers, follow me along as I experiment with real estate wholesaling. Hopefully this gives you some inspiration to try this experiment on your own!
I pointed out that one of my goals for 2010 is to make 50k in extra income from real estate wholesaling. It's an ambitious goal. A little scary to think about it MORE exciting to think about completing the goal. Who doesn't want and extra 50k?
I think the quickest way to success with any endeavor is modeling. I'm a big fan of modeling. No, not the magazine or runway modeling. Well, ok, I'm a fan of that but that's not what I'm talking about here. I'm talking about succeeding by modeling the success of others. There is a quote that I heard once that said "Do what a person that makes 100k does and you will make 100k". So, I'm going to do what other wholesalers do. More specifically, I'm going to follow success model of Eric Medemar. The very down to earth real estate investor / teacher / mentor. I'm ONLY going to use his Ultimate Wholesaling Course. At $97 bucks it's pretty cheap compared to the money I've spent on other courses. The reason I'm using his is it's very easy to understand and I figure if anyone else wants to experiment with wholesaling properties, $97 is a relatively low risk investment for them.
Eric says one of the first steps to wholesaling is to build a buyers list. This is a list of people who will potentially buy properties you find for them. This goes against everything that I learned from other courses. Most courses teach "Find the property, and the buyers will come". For some reason that logic, to me, sounds flawed. Maybe that's why building the buyers list first sounds like a better plan to me. It's not because the philosophy of "find the property, get the buyers" doesn't work (it does) but it's not my preferred way to going into wholesaling. I hate the thought of getting a property under contract and then running around scrambling for a buyer.
The first thing I did was contact a real estate agent friend of mine and asked him to send me a list of homes that sold in the last few months that were cash sales, foreclosure sales and short sales. If you don't have a real estate friend, open the phone book and call some and ask for a list of sold foreclosures. Eventually someone will give it to you. There is more information in the course. In any case, I was expecting a list of 20-25 properties. Man was I wrong. I already have a combination of 75 names and properties! That's crazy! Now, I won't find all of the numbers to these people so I'm going to send them a post card and direct them to my "bargain properties" website.
My process of finding who bought the property goes like this:
1) Get the address from the MLS listing (the list I got from the real estate agent)
2) Lookup the address on the property appraisers website to find out who owns it. The county I live in makes it REALLY easy to do this. In fact, if you live anywhere in Florida it's really easy to find out who owns the property by visiting the property appraisers website for the county the property resides in.
For instance, here is one example for volusia county florida. Go to http://webserver.vcgov.org/index.html and click on Parcel Record Search. Next, click on the "Search by Location Address". Next enter an address. I just used "123 Howland" because Howland Blvd is a major road in the biggest city in Volusia county. You now have a list of properties that match that address search. If you click the "Alternate Key" button you'll see all the details about the property. Pretty easy right?
3) Find out if that person owns any other properties. This, again, is VERY easy. Rather than doing an address search I do an owner name search. This provides me a list of all of the properties that the owner has. Occasionally the property is registered to a corporation. Again, it's really easy to find out who owns the corporation. Simply go to the site that has the names of all of the corporations in your state (sunbiz.org for Florida) and look up who the owners are. I've also looked up corporation owners in California very easily as well.
4) Do a google / bing / yahoo search for a phone number for the owner. I have found phone numbers for people on business websites (where they work), sales sites for other properties
they own, reunion sites, etc. However, there are times when the number can't be found. Like I said before, I'm going to send them direct mail ads until they respond by signing up as a buyer or call to tell me to stop sending them letters.
The properties that didn't have the information about who bought the property are ones that I'll drive to to see if I find any 'For Rent' signs in the yard. If they don't have for rent signs I'll wait a few more weeks and look at the property appraisers site again to find out who bought it.
Coming up, step 2. Contacting the buyers. What I plan on doing is recording some of the calls to let you hear what I say to them. Even if they aren't interested I'll still put them up here. Maybe someone can give me some tips on how to close them.