Before diving in below checkout what Zach has to say.
It seems counterproductive to find a buyer before you even have anything to sell. However, in wholesale real estate, you must have the buyers on file first. You need to know which sort of properties they want. This process is known as “reverse wholesale”, meaning that you don’t buy a property until you actually know that you have a buyer in place.
The best place to find these investors is through dedicated meetings. You can find your nearest one online if you don’t already know where they are. Most major cities have investor meetings that you can sign up to. If, however, you find there aren’t any, you may want to consider starting your own.
Some of the questions you need to ask the investors include what properties they want and which areas they are interested in. Once you get this information, you can ask the investors whether you can contact them if you find a property that they are interested in. Generally, they will be more than happy to give you their details.
Once you have spoken to your investors and know what they are looking for, you need to start finding sellers. You have to get to know what your local market is, know how much properties are retailing for, what the rent prices are, what the properties look like and so on. Make sure you only look at properties that actually fit what your buyers are interested in.
Once you have the property that you are interested in, and the seller is willing, it is time to find out how the seller can give you the best deal. Set yourself a maximum price, and if you play the game right, you may just end up paying far less than that. Negotiating is a skill that you have to learn about. Sometimes you have to walk away for a while, if a seller doesn’t want to meet your demands. It is possible that they will then contact you at a later stage to accept your offer after all. This is why you always have to leave negotiations on a friendly term, so that the seller knows they can contact you at a later stage.
Sealing the Deal
All being well, you now have an interested buyer, a property and a motivate seller. Now it is time to really seal the deal. You must offer a price that covers all the costs for cover and holding, covers any repairs that have to be done and your wholesale fee and still leave you with a profit. Once you have done this, you need to write a contract subject to inspection. Make sure you postpone the inspection as much as possible, because it is during this time that you will try to sell your deal to the investors you have picked before. Make sure you have an assignable contract, which makes the purchase far more interesting because it avoids the need for double closing.
Wholesales tend to use specific marketing systems, which means the investors may know what is happening even before you do. Try to get on one of these systems so you can show pictures of your pictures. All necessary details such as price, retail price, number of bedrooms, size of property, neighborhood and so on. Do not ever try to skew the price in your favor; investors know exactly how much properties in their neighborhoods are worth. They will be able to make a decision pretty quickly.