Wholesaling Real Estate: Effective Marketing Approaches
Wholesaling in real estate can be a profitable business opportunity for property investors looking to make a profit without becoming long-term homeowners. However, like other businesses, a successful real estate wholesaling business depends on marketing strategies.
Wholesale real estate marketing involves securing great deals, negotiating lucrative contracts, and building great relationships between sellers and buyers. Solid marketing plans will help you distinguish yourself and attract potential sellers and buyers in a highly competitive real estate market.
This article explores top marketing tips a real estate wholesaler can employ to grow their business and succeed in the wholesaling property industry. Read to the end!
What Is Real Estate Wholesaling?
Before diving into wholesale real estate tips, you need to understand the meaning of real estate wholesaling.
So what is real estate wholesaling?
Wholesaling real estate requires a real estate wholesaler to obtain a property contract with the seller and sell it to a real estate investor. The secret is to find off market properties with lower prices than their fair market value or distressed properties and sell them to interested real estate investors.
The wholesaler holds the property's earnest money. Once a wholesaler identifies wholesale real estate deals, they might execute either of the following strategies:
The Double Close Strategy
This wholesaling real estate strategy entails the real estate investor buying the property from the seller to sell it later to another investor at a higher price. Like house flipping, this strategy allows you to sell the property on your own time.
The Assignment of Contract Strategy
This wholesale real estate strategy doesn't require the investor to buy the home. Rather than purchasing the house, the real estate wholesaler will sign a wholesale real estate contract, giving the investor the right to buy the property solely.
Also called the purchase and sale agreement, the assignment of contract strategy might be sold to the end buyer for a profit.
The Real Estate Wholesaling Process
Since we've answered the question "What is house wholesaling?", it's time to explore the real estate wholesaling process, which entails:
1. Finding a Property
The first step is to find a motivated seller whose property price is lower than a similar property's fair market value. Then get the purchase contract from the seller to assign to a ready buyer after adding your wholesale fee.
You can find a distressed property from a motivated seller by exploring many options, including your local public directory and other marketing tactics like direct mail campaigns and word-of-mouth advertising.
2. Building a Buyers List
While finding a distressed property with a low market value is important, wholesale real estate transactions are only conclusive once you get an end buyer.
Successful wholesaling property investors build a solid buyers list to fast-track their real estate transactions. The buyers' list comprises real estate professionals actively purchasing off market properties.
You can generate buyers' lists through marketing campaigns and extensive networking, including attending events, meetings, and auctions.
3. Negotiating
After identifying property owners willing to offer you their homes for less than the market value, it's time to negotiate with them. Find out what the homeowner owes on the house, including any additional moving costs or outstanding liens.
Now, it's time to make an offer. You need to leave lots of room for negotiation while making your wholesale real estate deal offers. According to experts, it's best to make the first offer low, from 10%-25% below the asking price.
Distressed homeowners want to sell their properties, so coming up with a mutually beneficial wholesale contract isn't always hard.
4. Closing the Deal
After negotiations, it's time to sign a purchase contract with the seller. However, you need to explain to the seller that you aren't truly buying the house yourself but will transfer the agreement to a third-party buyer.
That way, the purchase contract will include an assignment clause allowing you to sell to potential cash buyers. However, the purchase contract will expire unless you find an interested buyer within the specified month.
Alternatively, once you find an interested buyer and collect a deposit, it's time to assign the purchase contract. After that, work with a reputable title company to prepare the necessary paperwork and order title insurance. Then, all parties will sign so you can close the property.
At this point, your wholesale real estate transaction is complete, and you'll likely get your part of the payment within 30-60 days.
How to Find Wholesale Property Deals
Wholesaling real estate deals are among the few real estate investing strategies for savvy investors due to their high return on investment (ROI) and risk mitigation.
Also, it requires low capital, making it attractive to every real estate investor with less experience and inadequate finances. If you're interested in wholesale real estate, the following are ways you can find motivated sellers:
Real Estate Meetings
One thing you won't find lacking at real estate meetings is fellow investors and brokers with crucial industry information. There's always an individual looking to invest, buy, or sell.
You might also stumble upon someone with a potential wholesale deal. Therefore, as an investor, you need to attend these meetings to see if you can find motivated sellers with rental properties for sale.
Direct Mail
Direct mail marketing, as its name suggests, entails targeting distressed sellers by mail, requesting them to sell their properties to you. A direct mail campaign can be highly effective, depending on your list of contacts.
Social Media
Thousands of people can learn about your wholesale real estate business with an effective social media campaign. Therefore, real estate investors must leverage social media to find property owners.
Create an effective social media campaign to increase your marketing efforts and find motivated sellers.
Local Marketing
Real estate investors can implement many inexpensive marketing campaigns tailored to their neighborhoods. For instance, you can use bandit signs to indicate you're wholesaling. Without even posting bandit signs, you can contact and network with fellow real estate investors through the numbers on the pre-existing signs to help with your search.
Website
A proper website can significantly increase your visibility as a real estate wholesaler. Hence, websites are a crucial part of real estate wholesaling. An online presence helps real estate investors generate leads without putting in additional work.
A responsive and user-friendly website is an effective real estate investing strategy every real estate agent needs to succeed in the real estate industry. Your website offers an avenue for a motivated seller to reach you for a wholesale real estate deal.
How to Market Your Real Estate Wholesale Business
While other real estate investments exist, wholesale real estate offers many benefits for several reasons. Besides wholesale deals requiring minimal capital investment, the purchase price is always lower than the sale price, meaning real estate wholesalers enjoy higher profits.
Since most motivated sellers use the internet to reach interested investors, consider creating a digital marketing strategy that positions your business in places your target audience will easily find you, such as Facebook and Google.
The following are ways to market your wholesaling real estate business:
1. Create a Compelling Real Estate Wholesaling Website
The website is the first place most people check when searching for a product or service. Therefore, ensure your site is responsive and has modern features. A compelling website is easy to navigate, mobile-friendly, and well-designed.
Without these components, your wholesaling real estate company can't compete with competitors in your local market, affecting your chances of converting potential buyers into new clients.
If your website isn't user-friendly or responsive, or you're still considering getting a high-quality wholesale real estate site, consider working with Ardor SEO to design a website your site visitors will fall in love with.
Ardor SEO is a leading web design and digital marketing company catering to real estate agents throughout North America.
2. Run Google and Bing Search Ads
Most real estate wholesalers focus on shotgun marketing strategies like sending direct mailers or putting up bandit signs while hoping to catch the attention of property owners looking to sell.
While these are relatively cheap ways of getting leads, pay-per-click (PPC) is more effective and inexpensive.
Unlike direct mailers and bandit signs where you're actively searching for sellers, PPC advertising like Google Ads helps position your website to where home sellers can easily find you.
3. Utilize SEO
After building a befitting wholesale real estate website, the next step is to incorporate search engine optimization (SEO) best practices to make it easily discoverable on Yahoo, Bing, and Google. Your chances of a potential cash buyer and seller seeing your website are low if you don't rank on the first search engine result page.
According to Forbes, 75% of people only move past the first search results page if the result isn't relevant to their query (a rare occurrence). Therefore, you need a detailed and effective SEO strategy to enjoy more visibility on Google.
If you're inexperienced with SEO best practices, working with a leading digital marketing company like Ardor SEO is best. Ardor SEO specializes in off-page, on-page, technical, and local SEO for real estate agents.
If your wholesale real estate business revolves around a specific location, a strong local real estate SEO will help you become more visible to property buyers and sellers in that location.
4. Generate Reviews and Testimonials
Most people look at reviews and testimonials before purchasing or subscribing to a service. Thus, testimonials and reviews can mar or make your wholesale real estate business.
Whether running PPC ads, using Google My Business, or focusing on your website, generate reviews and utilize testimonials to build trust. Building your brand reputation offers many immediate and long-term benefits for your business.
5. Explore Social Media
Social media platforms like Instagram, Facebook, and LinkedIn offer you the opportunity and digital tools to reach your target customer easily.
It's best to research the platforms your local competitors are actively using. Then, find out their marketing strategies on sites like Facebook and LinkedIn and the language they use in reaching their customers.
If most of them use the same marketing language on all their pages, consider adopting the language but add a little twist to yours to make your business stand out.
High-quality content will help you stand out on social media while keeping your followers engaged. With time, people will see you as an industry expert and refer you to their friends and families.
Data shows that about 4.76 billion people use social media, so you'll miss out on many prospects if you don't effectively utilize social media.
FAQs
Wholesaling real estate marketing materials include online listings, brochures, flyers, and professional business cards. Also, creating a social media presence and responsive website will help your business reach a wider audience.
Some common mistakes every real estate wholesaler should avoid are neglecting online presence, using generic marketing materials, delaying following up leads, inability to define the target audience, and non-compliance to relevant regulations and wholesaling laws.
Key Takeaways
Hopefully, you've gotten an answer to your question, wholesaling real estate, what is it?
Effective marketing is essential for a successful wholesale real estate business. You can generate profitable leads, establish valuable relationships, and build a strong reputation with the right strategies.
However, prioritize creating compelling marketing materials, understanding your target audience, and utilizing different marketing channels to reach prospective sellers and buyers. Remember to leverage social media and build a strong online presence to help you increase your brand visibility.
By implementing these tips, your wholesale real estate business is on its way to achieving long-term success.
If you're a new real estate wholesaler looking to succeed in the investment property world, you need to listen to expert wholesalers share their success stories and tips on reputable platforms like the Icons of Real Estate.
The Icons of Real Estate podcast is where successful real estate professionals share their stories and expert advice with aspiring real estate brokers and investors.