Building a buyers list is a critical component of real estate wholesaling. Some argue it’s the most important component, we disagree. In this article, you will learn how to build a buyer's list and why seller development is actually more important if you want to be a successful real estate wholesaler.
A buyers list is a list of buyers to whom wholesalers market their deals. In traditional wholesaling, this is a cash buyers list, as the buyers on the list are able to close fast using cash in as-is condition.
Building a buyers list is not difficult but it can be incredibly time consuming. Here is the playbook to successfully build your buyers list:
Create a spreadsheet with the following columns:
This living, breathing document is important and valuable. Keep it updated as if your livelihood depends on it. We'll add more columns in the steps below. Contrary to popular belief, you don't need a customer relationship management system (CRM).
Sources of buyers:
Facebook Groups: There is probably a real estate investors Facebook Group in your market. If there is not, stop what you're doing right now and create one. In these groups, other wholesalers will post their deals and buyers will leave their email addresses in the comments section. Grab those email addresses and add them to your buyer's list spreadsheet.
Public records: Look at who has been buying properties in the neighborhood. You can comb through your local and state property tax records online.
BiggerPockets: See which members are investing in your market, read their bios and connect with them.
Craigslist: Post a classified in the housing sections that you're looking for fix and flip and rental property buyers. You might get a few investors looking through Craigslist for deals that reply with their contact information.
Referrals: Buyers develop relationships with other members of the real estate ecosystem. Title companies, real estate attorneys, agents, contractors, architects. Develop relationships with these service providers and ask for referrals to the buyers they work with.
Your buyers list spreadsheet should now look something like this:
Access and download our template: Buyer's List (Google Sheets)
Use your knowledge of your buyer's acquisition criteria to focus your seller development. If you have a buyer on your list who is buying as much as they can get their hands on, it would be wise to spend seller outreach time looking for properties you can put under contract at the terms necessary to match your buyer's criteria. Conversely, don't spend time looking for obscure deals for a buyer who only buys 1 or 2 properties per year.
It doesn't make sense to spend a lot of time networking with buyers when there’s a low probability your initial inventory will be relevant to them. Sure, it helps to speak with some buyers to learn about their acquisition criteria, but don’t waste time on buyers if you don’t have inventory.
The most important success factor in real estate wholesaling is deal inventory. If you don’t have deals, you have nothing for your buyers.
If you’re just getting started in real estate wholesaling, pour all of your effort into seller development. Your contract in hand is a forcing function to figure out your buyers list and deal distribution. Allow your deals to force you to figure out how to find buyers that would be interested in each specific deal.
Once you have a contract in hand, you become a deal marketer. Great marketers master their customer acquisition channels and you need to to the same. You don't need to use all channels for every deal but you need to use the right channels to assign your deal quickly for your target assignment fee.
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