5
CHAPTERS

8 Best Ways How to Find Houses to Wholesale

Share With Friends:

In this article, I will suggest the best ways of finding properties to wholesale to help you streamline your business.

I personally use these methods to help my real estate investor clients.

Before answering the question “how do real estate wholesalers find deals?” let’s determine what exactly to look for.

1
CHAPTER

What to Look for When Wholesaling Real Estate?

Before asking yourself “how to find properties to wholesale?” you should understand how to evaluate a property’s suitability for a wholesale deal.

The two factors you should look at are the seller’s equity in a property and seller’s motivation.

 

Equity

The more equity the seller has in a property, the better.

Higher equity gives the seller more room for giving you a discount. It’s crucial that the house be sold for under market price.

A wholesale contract price has to be low enough to allow the contract buyer to pay the wholesaler’s fee, make repairs or improvements, and sell the property at market value for a profit.

If a property has little equity, a workable contract price will be lower than the amount owed to the lender.

Most lenders won’t accept that payoff amount unless the deal is a short sale.

To qualify for a short sale, the homeowner must be behind on mortgage payments, owe more than the current market value of the property, and have a valid financial hardship.

Also, in a short sale, the lender can hold the borrower accountable for the remaining loan balance. This will squash many deals.

If the lender allows a short sale, the deal will depend on an “as-is” value that is agreeable to the lender and the investor.

Legal liability can be created for the investor if the lender decides later that the “as-is” value was improperly calculated. They can even claim deception.

Although doable, wholesaling short sale properties is either completely illegal in some states or requires complicated legal arrangements to make it safe.

The process of buying a short sale home also takes a lot more time to accomplish than most real estate investors and wholesalers can accept. It’s easier, however, with the help of experienced short sale processors.

To sum up, look for properties with high equity to ensure enough discount for your end buyer.

 

Motivation

Those willing to sell for below market value are people who are motivated to get rid of the property and the sooner the better.

Typically, this motivation comes from difficult circumstances that are beyond the seller’s control. Below are the most common examples of such situations.

 

Mortgage or Tax Pre-Foreclosure

Financial difficulties are the primary reason for selling at a discount. Homeowners having trouble making their mortgage payments would rather sell cheap than lose the house to foreclosure.

Since most owners pay their property taxes with their mortgage payments, defaulting borrowers may also face a tax lien.

 

Disrepair

Home sellers with run down properties may not have the cash, time, or patience to repair the house. They frequently accept an under market offer for their property sold as is.

Landlords whose property has fallen into disrepair and is no longer rentable may also be motivated to sell.

 

Vacant Properties

Vacant property can also be the result of the owner passing away or leaving their home for an assisted living arrangement. Vacant properties draw vandalism, which makes them hard to sell.

 

Inheritance

A deceased owner’s heirs may live elsewhere which makes oversight of the property difficult. This can lead to physical deterioration and a reduction in value.

For this and other reasons, heirs are often willing to sell the unwanted inherited property cheaply.

 

Divorce

In a divorce, the house is usually the largest asset that the couple owns. There may be no choice but to sell the home in order to access the equity for distribution.

The divorce process is stressful, and selling the marital home is only one part of it. The couple may want to sell the house at a discount but quickly.

 

Relocation

A lot of people are relocating within the US from one region to another. Many homeowners can’t afford to pay housing expenses in two locations, and will sell their house quickly for a lower price.

These are just a few types of motivated sellers. Below, we will go over the ways to find them. Now let’s discuss how to find homes to wholesale.

Now that you know what kind of sellers real estate investors are looking for when trying to find wholesale properties to buy from you, let’s talk about the ways to find motivated sellers.

2
CHAPTER

Where to Find Properties to Wholesale?

The most straightforward way I can recommend is using the HouseCashin investment property marketplace.

HouseCashin is a unique all-in-one online platform for real estate investors and wholesalers. The investment property marketplace is just one of its many useful features.

To find investment properties for sale near you, select your target location in the filters section. You will get a list of properties to choose from.

Look at the listings that have the label “Motivated Seller” — they are the ones listed directly by owners.

Disregard the listings with the “Wholesale Deal” label — they are properties already under contract listed by other wholesalers looking to find investors to assign the contract to.

By clicking on a property, you’ll see the information you need for an accurate initial evaluation of its investment potential.

The listings specify the reason why the owner is selling their property. It is very convenient for you as this gives you insight into the seller’s motivation.

If you are looking for a specific type of seller, choose the deal type in the filters section: “delinquent property taxes”, “requires rehab”, “inheritance” etc.

HouseCashin is a robust resource that, depending on your location, could become your main source of motivated real estate investor leads.

But how do wholesalers find properties in other ways? Read on to find out.

3
CHAPTER

How to Find Distressed Properties for Wholesaling?

Now, let’s look at the ways of finding distressed properties for sale. Distressed real estate means properties that are either in tax or mortgage pre-foreclosure or already repossessed.

 

#1 Check County and Courthouse Records

When learning how to find distressed properties to wholesale, a good place to start is your county courthouse. Look for the County Recorder, Register of Deeds, or Tax Assessor’s office.

There you will find information on any parcel in that government’s jurisdiction. In your market, the city may maintain these records.

Most such records include the transaction and tax value history, ownership details, and whether or not the owner is current with all property taxes and assessments.

If the contact details in the records are outdated, use real estate skip tracing tools or other property investment apps with a skip tracing feature to find current contacts.

Additionally, we have a guide on how to find tax delinquent properties in your area.

 

#2 Visit Banks’ Websites

In a foreclosure auction, the lender protects themselves by making a bid that covers their loan and costs. This is called a “credit bid”.

If no one matches or beats that bid, the bank owns the property. These are Real Estate Owned or REO properties.

Lenders sell REO properties for themselves, usually with the help of real estate agents.

REO properties can be found on lenders’ websites. To find them, perform a search with the lender’s name followed by REO (Ex: Wells Fargo REO).

REO properties can be put under contract by real estate wholesalers similarly to other listed properties.

Once you get in touch with their REO department, follow the experts’ tips on how to get REO listings from banks.

4
CHAPTER

How to Find Vacant Houses to Wholesale?

#3 Drive for Dollars

A classic way that real estate bird dogs and wholesalers often use is to drive through the target neighborhoods regularly. This old school strategy is taught at most real estate wholesaling courses.

This will help you keep up with overall trends as well as individual opportunities. To find houses to flip for your clients, look at homes that look abandoned.

The possible signs are overfilled mailboxes, unmaintained lawns, and other indicators showing that the property is unattended.

A property in physical distress can indicate financial distress as well. Homes that aren’t being taken care of can indicate a potential wholesaling deal.

To streamline the process, there are driving for dollars apps and other wholesale real estate software tools helping you quickly save the addresses, take pictures, and make notes about homes that caught your eye.

A review of public records will give you the owner’s name. A search for that name in the grantor records will show any liens on the property. This will help you estimate the amount of equity in the property.

Use skip tracing software for real estate investors to find homeowners’ contacts easier.

 

#4 Ask the Local Postal Office

When tenants or owners vacate a property, they usually stop their mail from coming to that address.

In addition, postal carriers drive your market regularly and know which properties are vacant or unattended.

Rather than hanging around the post office to meet carriers, approach the postmaster during business hours and talk to them.

If you explain who you are and that what you are doing is a legitimate business enterprise, they may be willing to share information on vacant homes to help you find motivated sellers.

 

#5 Attend Estate Sales

In an estate sale, a person or family’s personal property is sold on the premises. The complete liquidation of someone’s property can indicate a difficult or distressed situation.

The real estate may go on the market after everything is off the property. Attending estate sales gives you the chance to view the property thoroughly.

If it fits the description of a distressed property (deferred maintenance, out-of-date or dysfunctional features, etc.), approach the owners for a possible sale.

 

#6 Look for Rentals

Many small local landlords don’t hold adequate reserves for maintenance. When maintenance is neglected, the landlord doesn’t have the funds to catch up.

When a neglected property can’t be rented, the landlord is cash strapped to keep up with utilities, home insurance, and possibly loan payments. This is a good wholesaling opportunity.

An owner dealing with evictions may also be ready to get rid of the property. Other than those posted on the property’s door, eviction notices aren’t public knowledge.

You should have a relationship with a local real estate attorney. Ask them if they can give you information on local evictions.

Make a list of rentals in your market and keep an eye on them. When you see them start to deteriorate or see a notice posted on the property, step in ahead of your competition with an offer.

5
CHAPTER

How to Find Run Down Houses to Wholesale?

#7 Look for FSBO Listings Online

A FSBO (For Sale By Owner) property may be a chance for a wholesaling deal, but the property needs to be available at a below-market price.

The owner must be a motivated seller. Otherwise, you can expect that by going FSBO, they hope to get the highest amount from the sale of the property by avoiding realtor commission.

Another reason for selling “by owner” is not having cash to pay the closing costs for home sellers or repair the property to bring it to a marketable condition, which is requested by agents.

A FSBO owner has to be ready to pay at least a buyer’s agent commission which in most markets is about 3%. That’s a saving you should mention when presenting your offer.

 

#8 Ask the Municipality About Condemned Properties

If your list of investor clients includes someone who can do a major rehab project or real estate developers, condemned properties can be a good addition to your pipeline.

When a property is condemned, the owner is usually on the way to losing it. You could be the answer to their prayers.

Make sure that you thoroughly check for liens. This includes liens placed by the municipality for any work they’ve done.

Add the local Code Enforcement office to your networking list. They may keep you updated on new condemnations.

 

Finally, if you are reading this article, chances are you’d be interested in other ways of self education on the subject matter.

If you would, we have review and comparison guides on the top real estate wholesaling books to choose from.

___

If you want to contribute your expert advice on a topic of your expertise, feel free to apply to our Expert Contributor Program.

___

About the Author

Kristina Morales is a REALTOR® with over 20 years of professional experience. She actively practices real estate in Ohio but also has practiced real estate in California and Texas. Conducting her real estate business in three states has allowed her to gain unique experiences that make her a well-rounded realtor. She obtained her Bachelor of Arts in Business Management and her MBA with a concentration in Banking and Finance. Prior to real estate, Kristina had an extensive corporate career in banking and treasury. She ended her finance career as an Assistant Treasurer at a publicly traded oil & gas company in Houston, TX.

Never Miss a Post
Recent Posts
7 Best Dialers for Real Estate Investors Compared
7 Best CRMs for Real Estate Wholesalers Compared
How Long Does It Take to Get a Real Estate License in Louisiana?
Categories
Popular Posts
How Hard Is It to Pass the New York Real Estate Exam for the First Time in 2022?
How Hard Is the California Real Estate Exam and How to Pass It the First Time?
How to Pass Oklahoma Real Estate Exam the First Time in 2022?
Our Partners