Building a responsive buyers list is hands down the best way to succeed in wholesaling.  And when those buyers have cash – whoa Nellie!

Here’s a simple 5-step method guaranteed to build you a FREE list of cash buyers:

1. Search the MLS (you or someone that has access such as a Realtor, appraiser or friend) for properties that have the words “Cash Only”, “Cash Offer” or “Cash” under the “financing” section of the listing.

2. In the criteria, make sure that you select only listings with a status of “closed” not pending, active, or expired.

3. This report will show you all the MLS transactions in your area that closed for cash! Yeah, baby!

4. Search the property address on the corresponding County Tax Assessor’s website.

5. The new owner of record will appear with their mailing address.

You now have a cash buyer, the address of the property purchased and their mailing address!

Take some time to build this database and start mailing postcards or yellow letters to them immediately letting them know that you have great deals on houses.

To get started as a wholesale syndicator, you need to network and develop relationships with a network of wholesale investors. Here are a few steps to getting started:

1. Find the investors first. Take my advice. This is the very first step – you absolutely need to build this list before you start going after properties.

2. Determine your targets from your buyers list. Your investors (buyers) are going to dictate their criteria for properties they will buy.

3. Get to work finding deals. Once you have an idea of what your buyers list wants in a property, start hunting for deals. Read this article for tips on finding wholesale deals online.

4. Get the contract on the property. You’re going to work with the seller to negotiate the terms on behalf of your buyer. Rehabbers will a list of contract requirements as will turnkey investors. Once you’ve ensured the contract meets their standards, it’s time to turn it over.

5. Assign a fee for flipping the contract. This is where you make your money. When you sign the contract over to your buyer (investor), you’ll collect your fee.

Wholesale syndication is a low-cost way to get started in investing. Don’t forget that it’s important to start with the buyers list before the property search. This will save you time and build your business faster. See these other resources on wholesaling for more tips and tricks.

Your job description is that you are an investor. That means you are a negotiator above all else. Investors make their money when they buy a property, not when they sell. That’s why you have to be smart and use your negotiation skills to make the best deal. The bottom line is that you make more money.

Now, that we’ve cleared that up, let’s talk about some steps you can take to glean information for better seller negotiations.

Let them know you are considering other properties. This is an old sales technique that makes the seller squirm a bit and take notice of you. If you want to get a little more conversation going on a particular property, tell the seller that you are going to be a few minutes late to see their property because they are one of a few on your list. Sellers want offers and will make time to talk to you if they know you “might” be interested in their property.

Don’t gush over a property. To a seller, when you show the love, you’re revealing your interest in the property. In other words, they know you want it. Keep your compliments to yourself to keep the price down.

Point out the problems without attacking the seller. Sellers take their properties personally, especially if it’s their home. Make the critiques of the property; not the workmanship. “The property seems to have shifted a bit” is way better than “It looks like you really tried to cover up those cracks.”

Take notes of property flaws.  This shows you are serious and will take every point into account when you make an offer.

Ask lots of questions. Your goal as a negotiator is to find out what’s important to the seller. You want to understand what they want to get out of a property. Of course they want to get rid of the property (if it’s a distressed situation).

Questions such as “What made you decide to sell?” or “When do you need to sell by?” or “If you could change one thing about the house, what would it be?” can give you information to use later. For example, you can make an offer with a short closing timeframe if they are eager to move on fast.

Negotiating wisely is all about getting information to use at the right time. By asking questions and keeping your cards hidden until it’s time to play them, you’re going to win more money in this game called real estate investing.

Econohomes buys the properties from mortgage lenders and servicers and resells them on their site. When you look at the site, you’ll see the prices are low – some priced in the teens. The downside of this site is that once you get beyond the Mississippi River, there are very few properties. For instance, in Colorado where I’m located, there are two properties listed (at the time I’m writing this).

This site led me to the conclusion that there may be some value in scanning the site or setting up their alerts, but is finding deals online the best place? Or is it a better approach to use online sources as a part of your wholesale deal finding strategy?

Let’s explore how to search for wholesale deals online – the right way.

Searching databases is easy, but is it the best place? If you’re searching for properties in online directories, I’m willing to bet you’ve got at least 100 other peers searching at the same time. The question to ask here, “Is this really going to get you the best deal?” It might, if you can get in touch with the seller. But at this point, the property is most likely with a reseller looking to make a profit. Kind of like you.

Screening the “For Sale by Owner” listings for deals. Now, here’s a strategy I’ve recommended many, many times. Look on your target market’s Craigslist or use SearchTempest.com to narrow the results for “For Sale by Owner” listings. Keywords include: motivated seller, seller financing, must sell, etc. These leads can get you in front of a captive audience for wholesaling a property. Here’s a tutorial on how to approach these sellers.

Working the MLS for deals. The Multiple Listing Service can be a wholesaler’s best friend when it comes to finding wholesale deals online. You just need to know how to work it! Here a few tips for how to put the MLS to work for you. You may need the help of a real estate agent for some of this.

• Use a public MLS site and search for “Under Contract.” Your strategy here is to be the “backup deal.” Contracts fall through all the time (financing issues, property issues, relationship issues, etc.). You can come in and offer up another route out of a property when this happens.
• Use the right keywords. Look for vacant, motivated seller, must sell, needs work, handyman special and find opportunities to discuss moving the property. You can find these properties on the public MLS sites as well.
• Find expired listings. It’s not uncommon in this economy for multiple listings to expire. Expired listings mean the properties have been sitting on the market for a long time. Get a realtor to pull you a list and start working it!

Stay tuned to the Investor Insights blog this month for more tips on wholesaling.

1. Always know your numbers. Knowing all your numbers (top price you’ll pay, percentage fee to a flipper, deposits, etc.) will help you negotiate with more confidence. You’ll be prepared when a seller comes back with a counter offer. You’ll know how much wiggle room you have when unexpected repairs pop up. You’ll be able to walk away when the deal just won’t work. Numbers give you posture. Know them inside and out.

2. Care about the people you are dealing with. I said this last week in my article on becoming a wholesaler that you have to adopt a helpful attitude. It’s true. Sure, we’re all in this business to make money, but we’re also here to help people out of bad situations (which we get a nice paycheck from). But if you’re not willing to be helpful and caring in your conversations, you’ll close fewer deals and come across as shallow.

3. Document everything. Sure a handshake is a huge part of business, but documentation keeps things civil, legal and helps in negotiations. If you have a question or your buyer/seller disputes something, it’s best to have it in writing so you can clear it up before someone walks away from a deal.

4. Be willing to compromise. Real estate is all about wheeling and dealing. You have to be willing to make a few concessions. However, don’t make concessions if you won’t get the deal you need to make a profit. It’s one thing to lower the amount you will make by a few hundred dollars or to make an allowance you can make up when you flip or sell, but it’s quite another to make a concession and not make a profit. It’s better to walk away than negotiate your profit out of a deal.

5. Always have an exit strategy. There’s a saying in advertising, “Don’t fall in love with an idea.” The same is true in real estate. Don’t let yourself fall in love with a potential deal. Don’t bank on a deal closing until it’s signed, sealed and delivered. You need to be able to get out of a deal at any point and need to structure your contracts so that this is always possible.

Stay tuned to the Investor Insights blog this month for more strategies on negotiating deals.