The first time I ever used Craigslist was many years ago when I was looking to sell some tools I wasn’t using anymore. The guy who was going to buy them wanted to meet somewhere in the middle, so I drove halfway across the city in traffic. He never showed. I wasted hours of my day for the chance to make $50.
So you can guess why when a friend asked me if I saw real estate investment potential on Craigslist, I quickly said no. Whether buying or selling, it’s just too unreliable. As a wholesaler looking for buyers, it can be a constant source of frustration.
While the site was a pretty popular venue for real estate in the early aughts, by now Craigslist is a dead-end for real estate. As a wholesaler, you have a very finite amount of time to find buyer leads. You need to find the best way to get them, maintain them, and have them ready to buy. Craigslist isn’t it.
The Importance of Selling Quickly for Wholesalers
Before we look at why Craigslist is an imperfect venue for wholesalers, it’s important to remember Wholesaling Houses 101. A wholesaler buys a distressed property and quickly turns it around to another investor who will fix it up and flip it.
The keys to wholesaling (besides making sure you’re following all state and local regulations) are speed and volume. In terms of volume, you don’t have a ton of profit margin when wholesaling. Your buyer also wants to make a profit, and they have to take into account their own costs of repairing it. There is a not-terribly-reliable wholesaling formula, but the thing to understand is you aren’t going to have a huge profit. That means you need to be buying and selling a lot.
It also means that you have to act quickly. The longer you hang on to a home, the more taxes and bills you might end up having to pay, and the less likely you are to have the liquidity to turn around another house. The bottom line: You want to sell as soon as possible.
The Key to Wholesaling
What’s the most important aspect of wholesaling? Having buyers ready before you buy a house. Now, this doesn’t mean you are acting as a conduit. In many states, it’s illegal to have a buyer before you take control of the house. But you want to know that there are people ready to buy your house.
And that’s not what Craigslist is going to give you.
The Problem With Real Estate Buyer Leads From Craigslist
There’s a real appeal to trying to get leads with Craigslist. For one thing, it seems inexpensive. Some people use it to obtain buying or selling leads for no upfront cost. That means just placing an ad there (“House for Sale” or something like that).
Of course, what happens when you do that? Well, for one thing, you’re going to get buried. There are thousands of Craigslist posts a day, and if you take the free option there’s almost no way anyone will see your ad.
So let’s say you do pay for your ad and you are in the Real Estate section. You have just bought a property and are advertising it as a fixer-upper. Looking for an investor. Looking for a pro. Here’s what happens next in an ideal world.
- Your post is right at the top of your city listings for long enough to be noticed.
- It’s seen by a real estate investor who is looking for exactly that kind of house and is ready to make a deal.
- They contact you and you move fast because they are serious, dedicated, and professional.
- You get the cash for the house and keep moving your business forward.
Easy, right? Well, no. Here’s what usually happens.
- Your post is quickly buried by other posts—unless you pay for it to rotate to the top more often.
- It gets missed by the right kind of real estate investor, whether because they aren’t looking at Craigslist or they just happen to miss it.
- You get contacted by dozens of unserious people who just want to kick the tires, have a conversation, see what happens. They aren’t really professionals. They might be dreamers, wanna-be influencers, scam artists, etc. You really just don’t know.
- You have a lot of conversations. You have a lot of dead ends. You have a lot of frustrations.
- You hold onto the house for way too long, spend too much, and things don’t go the way you want.
To avoid this, you need to find a better way to get real estate buyer leads.
Setting Up a Circle of Buyers
Do you know what’s better than hoping your Craigslist ad somehow gets through the void before you waste a ton of time and money and suffer untold frustrations? Being connected to buyers who are ready to make a deal.
Finding a buyer for wholesaling real estate doesn’t have to be difficult. There are a lot of professionals out there—a lot of people who are always looking for a house to fix and flip. But of course, they can’t be chasing every lead. So, in addition to their own work, they rely on wholesalers they can trust to find good leads and get good houses.
If you earn a good reputation with buyers, you have people to whom you can sell a house once you buy it. You earn that reputation by buying solid houses that have great potential and offering them at a price that works for everyone. That’s what a professional does, and that’s what other investors respect. All you need to do is communicate with the circle of buyers you’ve connected with.
There are a lot of ways to be connected to buyers: networking within a local real estate club; setting up your own real estate investing website; and advertising (outside of Craigslist). How you will reach buyers is something you need to establish before you start buying properties.
Find Buyers for Your Wholesaling Business Without Wasting Time
Over the course of my career, I’ve found buyers in nearly every way possible. But it wasn’t until I invested in an independently owned and operated HomeVestors® franchise that I discovered the best possible way. With over 1,100 independent franchisees, there is always someone looking to make a deal.
All I have to do is enter my new property into the proprietary DealVestors® tool, and I can start getting offers. These are real offers from real professionals who are invested in working as quickly and as fairly as I am. I know that nearly everyone here is serious about their business. I admire that. I know that if I have something worth selling, I’ll find a buyer.
I don’t hate Craigslist. A friend of mine met her husband through it. Sometimes the ads are fun. But as for a tool for finding buyers, I’d rather trust a network built on trust. I’d rather turn to the pros.
If you’re serious about finding a buyer for your wholesaling business, request information about becoming a franchisee today.
Each franchise office is independently owned and operated.