It’s no surprise that real estate wholesaling is skyrocketing in popularity right now. House flipping has been in the public eye for a long time, but for people in the industry wholesaling is faster, cleaner, and has a better return. So how do you wholesale properties in competitive markets? In our last article we gave you 10 expert pieces of advice from wholesale professionals. Now let’s do a deep dive into the best strategies to wholesale properties in competitive markets!
How Competitive is Too Competitive?
As a real estate investor you don’t want to be in a market that’s so competitive that your business is doomed to fail. According to a 2017 study by Lending Tree, the most competitive real estate markets are:
- Denver, Colorado
- Colorado Springs, Colorado
- Portland, Oregon
- Fresno, California
- Sacramento, California
What makes these markets so competitive? There are a few explanations for what makes a real estate market competitive such as land availability, population density, and zoning. Because you’re a cash buyer, you need to be keeping an eye out for different signs of a highly competitive market than a traditional homebuyer.
In fact, cash purchases are one of the leading factors in making a market super competitive. If you’re in a city like San Fransisco, Orlando, Baltimore, and so on then you’re probably dealing with a lot of other real estate investors going after the same exact thing you are. That’s not necessarily a problem, after all best part of wholesaling is having a large buyers list in your area. The trouble comes in when you’re in such a heavy target area that no one can find you. If you’re trying to wholesale properties in competitive markets the things you need to look out for are:
- Abnormal amount of cash house purchases
- Quick sales
- Multiple offers
- Escalation Clauses
While all of these factors are signs that you’re in a highly competitive real estate market, it’s not all bad news. Remember, wholesaling houses thrives off of other active investors. The large amount of competition to buy the houses is there, which makes the houses you have to sell a commodity. As long as you’re a good supplier, you’ll always have buyers ready.
Competitive Marketing Strategies for Wholesalers
Like we said above, the amount of other investors in a competitive market isn’t a bad thing for business. It is, however, a bad thing for marketing. We’ve talked about online and offline marketing strategies for real estate investors in the past, but the game changes when you’re wholesaling in a competitive market. Not only do you have to market your services to motivated sellers and cash buyers, but you have to compete on both ends with a swarm of other real estate investors. What’s the best way to handle that?
1. Offline Marketing
If you’re trying to wholesale properties in competitive markets then bandit signs and flyers aren’t going to cut it. Postcards and direct mail will get you so far, but the real killer strategy is networking, networking, networking.
Being in a large market means that there is definitely a REIA in your area, if not multiple. Join them. Plain and simple. Go to as many meetings as you can and build your cash buyers list through the connections you make there. Is sounds simple, right? Well…that’s because it’s a no-brainer. That being said, once you make those connections you need to keep up with them. That’s the difficult part.
Just like any business relationship, the connections you make at your local REIA events are crucial for the longevity of your business. You need to be the top property supplier in your area to compete with other real estate wholesalers, which means you need to have an active buyers list and an active inventory.
Networking at REIA events isn’t just about building your buyers list. Look for birddogers or acquisitions managers who are looking to get started in the business and team up. The more properties they bring you, the more properties you have to sell to cash buyers.
2. Online Marketing
We’ve talked about online marketing a lot (I mean, c’mon, we’re all about online marketing here). The reason we go over it so much is because that’s what’s going to make you stand out if you want to wholesale properties in competitive markets.
Think about what you do online everyday. Chances are you do lots of searches for local businesses. Everything from food, to furniture, to events and activities. If you’re conducting local searches every day, so are motivated sellers and other real estate investors.
In fact, some of the most searched terms by other investors in competitive markets are:
- local real estate wholesalers
- house wholesalers in my area
- local cash buyers
- local house sellers
- real estate investors in my area
Let’s do a quick experiment. Pull up Google right now and type in “real estate wholesaler” and your city’s name. Does your business show up? What rank is it? Are you above or below the 5th search result? Who shows up instead of you?
If you either can’t answer those question, or find yourself on the bottom of page 1 or even on page 2, then your competitors are beating you. The most important part of online marketing in a competitive area is SEO (search engine optimization). We’ve had lots of articles about how to best optimize your website for Google and Bing. Check them out here!
3. Paid Placement
Just like organic online marketing, the stop strategy to wholesale properties in competitive markets is paid advertising online. This means Google AdWords, Bing Ads, and FaceBook ads. Despite the controversy around Facebook and the changes to the algorithm, paid ads are not going anywhere.
Take a look back at your search results after our experiment. You’ll notice there are at least four links at the top of the result that have a green box that says “ad” under the title. Those aren’t organic results, those are AdWords placed links. Again, we’ve talked about AdWords before, so we’ll just do a brief run down here.
Essentially when you run an AdWords campaign you’re paying to be placed above organic search results. Meaning, when someone types in a search like “real estate wholesalers in Chicago“, your business will show up as the first, second, or third result. That’s definitely where you need to be if you’re in a competitive market.
SEO is a great long-term solution to a competitive market. As long as you’re building backlinks and establishing your online presence, you’ll eventually get to the top of page one in a search result. But…SEO takes time. Like…lots of time. That’s why a lot of real estate investors that wholesale properties in competitive markets go with PPC (pay per click) marketing like AdWords and Facebook Ads.
Wholesale Properties in Competitive Markets Like a Pro
The key to having a successful wholesale business in a competitive market is all about marketing. The best offline strategy is networking, but that doesn’t just have to be limited to REIA meetings. There are a lot of ways to build connections with active local investors without even needing to leave your house.
Joining groups online is a great, simple way to find local cash buyers. Check out the Flip Pilot Group on Facebook to get connected with active investors in your area!
When it comes to really competing with the competition, you need to be online. No if’s, and’s, or but’s. With the way business is shaping up, if you don’t have a strong online presence you’re just not going to make it. Getting a website is one thing, but knowing how to use it and market it is another thing altogether.
That’s why we offer free training to real estate investors just like you. Learn how to dominate your local market from a successful house flipper and wholesaler, Danny Johnson, in our free webinars! (Psst, I promise it’s worth it).
Click the button above to reserve your seat. Again, it’s totally free and totally worth it.