How to find serious cash buyers?

Bird Dogs, Wholesaling
1

How and where do you find serious cash buyers for wholesale properties?I am not talking about tire kickers. I mean cash buyers who are ready to take action and buy the properties. How many of you has had to deal with very picky buyers who wanted to buy properties that are just too complicated to bring to the table? They may want a house with a certain number of bed and baths at a price that is not easy to get for them. You may run across a home that has a few of the things they want like the amount of beds and baths they want. Now they are not happy with the sq. ft or the year the house was built.

It is just an example but you can see how annoying this can be. Right? What’s even more upsetting are buyers who do not contact you back whether or not they are interested in buying the property you showed them.

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Welcome to the wonderful world of wholesaling!

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Yeah it’s wonderful alright.

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If it was easy, everyone would be doing it. :beer

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I never said it was easy. Pain in the rear maybe. Easy? No.

6

What one must understand that wholesaling is still “sales”.

All the best,
~Slim~

7

tbodley74,

Naughty naughty…

You’ve got the process backwards… Don’t look for buyers first …or you’re gonna give yourself an aneurysm. If you find a deal, you’ll find a buyer. But if you find a buyer …you’ll be looking until Moses comes back for a deal that works for that buyer.

Advertise what you’ve got for sale, build a buyer’s list and see which one bites.

Look up the public records for all those who’ve purchased with all cash. Contact them and see if they are interested in wholesale deals. Get a cursory idea of what they want, and then ignore half of what they say they want. When you get a deal that halfway resembles what they want to buy, contact them with the offer and give them a chance to buy.

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Javi is right on this one! Only, he’s a lot nicer than I am in that I NEVER ever contact a previous person because my experience is they won’t bite. I definitely write info on people down and so on, but I never rely on it. In the years I’ve been doing this business, I make it a point to take info down, and you know what? Not once in ALL the deals I’ve done have I sold to one of the folks who calls themselves “cash buyers”. Your best bet? Advertise your deal to everyone without being specific to investors. Collect $1000 non-refundable cash from the so called cash buyers to dwindle down the haves from the have nots. If they buy from you, that is the ONLY real way to tell if they are truly serious. Cash talks, bullsh_t walks!

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I agree with the OP. Finding real buyers is not easy. In my opinion a real buyer doesn’t care where, what, when, etc. If it’s a good deal he or she will pick it up as long it fits there general strategy. Of course it is important to build a list, but in reality you need no more than 10 real buyers.

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Wait wait wait. Hold up. I get too many different answers to this. Yall say find deals first then most say people find buyers first. Which is it?

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Yeah these so called buyers I have been dealing with seem like they are time wasters. Cash talks, bullsh_t walks!. I like that.

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I say do both. The cash investors I’ve found were either through a deal I was marketing or through networking (RE groups, realtors, title co, etc.). I have a small buyers list and I give them the opportunity to present an offer first, but Im marketing for buyers anyway just in case no one bites. Secondly, build a rapport it makes it easy to close deals and an opportunity to figure out why they’re not buying. Third, send them a property fact sheet with all the necessary data. I just try to make it as easy as possible (pics, taxes, ARV, etc.)

13

My biggest fear is to get a home under contract first then market the deal with hopes and prayers I find a buyer to buy the deal. Then if no one buys the deal even if it is a good deal, I will be screwed. I see so many homes in my local area that are vacant and some for sale by owners that in my eyes look like they may have the potential to be some serious money makers. I could have been contacted the owners of these vacant ugly homes to get them under contract. I do not want to leap before I look.

Besides this could ruin my reputation quick when I am not able to find a buyer for the home as promised in the contract. Can you tell me this? I mentioned I have a lot of vacant ugly homes in my part of town. Should I even bother getting those homes under contract if those old ugly vacant homes have not been sold in years like the rest of the homes in that particular area?

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If you are concerned your property under contract won’t sell because of the competition, your property is probably overpriced. When an item becomes a commodity (lots of similar if not functionally equivalent items) sales generally depend on service and price. Maybe your good deals are not that good. I’ve watched quite a few properties I was outbid on over the past few years get rehabbed and then sit on the market for over a year and even get foreclosed on because the buyer paid too much. I still can’t believe the prices being asked for bank owned junkers in my area. I’ve bid on a few at about 40% of the asking price from the bank and have not been able to buy a single one. I don’t know how those “investors” are making any money. The properties I’ve bought directly from owners were purchased at about 50% or less of current asking prices in my area. Unfortunately, these deals are rare, at least for me.

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It’s still amazes me how many so called wholesalers who thought they where the mack daddy guru back during the boom times are no longer doing it now. I was taught a long time ago by one of my mentors that if a deal is good enough, finding a buyer would be no problem. That was then and this is now. There is so much inventory on the market, you have to know what other investors consider a good deal. What you think represents a good deal really could be overpriced in the eyes of an investor buyer. Buyers are picker then ever, because those who have cash can afford t be. Buying marginal deals knowing it will turn into a good deal based off of appreciation is over. Network with buyers and gauge the areas and price points they like FIRST.

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I know right? I see so many homes for sale in and around my part of town, but no one has any interest whatsoever in buying homes in my area. I live in an area where there is a mixture of very low income to higher income homes. I have to admit I have had the urge a couple of times to take a chance at get some of the vacant ugly homes in my area that have not been sold in years and get them under contract with the hope of finding a cash buyer willing to invest in these homes. I am networking or better yet was networking with a buyer in my the local area that stopped contacting me after I contacted him with a property I did some bird dogging for. I hate when buyers say they want me to look for properties then once I find that property they look for I never hear back from them again. It is irritating.

17

This thread reminds me why it’s really important to know our farm as well, or better than our buyers.

Frankly, buyers get ‘real’ familiar with the market on their own simply by looking at deals for sale. After all, they’re the same ones going into homes for sale, and sizing up what sellers have to offer on a regular basis …until they find something.

It doesn’t take a lot of looking before the buyers become experts on market values… We need to do the exact same thing.

The problem I’m seeing is that the ‘wholesaler’ wanna-bees have very little idea about values in their farm area, because they first don’t have a farm area and secondly are flitting all over the map like a broken GPS, and thirdly, if not most importantly, are not physically searching out and getting into properties for sale.

Furthermore, we’re mistakenly satisfied to look at Zillow comps and call it a day. As bad, we’ll scan the MLS, or whatever, for deals, but simply do not actually get inside homes.

Failure to do this one fundamental thing will of course create insecurity over any deal we negotiate, because we don’t really understand if we have a deal or not. Every deal we negotiate is reduced to a gamble, of sorts.

On the other hand, when we’re familiar with our farms because we’ve been in the properties and know what’s for sale, for how much, and for how little, and how fast it’s sold, we’ll then instantly recognize and pounce on deals that we know will sell in days, not months. All the gamble is removed, and then it’s just a matter of moving property through our pipeline.

That all said, even professional investors/flippers, for some odd reason, fail to know their markets well enough to remove the gamble from their deals. They’ll flit into unknown territory after a success or two, and then feel like it’s OK to gamble ‘on this one.’ Worse, they make terrible assumptions about values, based on old, bad data, or a gut feeling. Guts are what you remove from a dead fish, not to base deals on, apart from what anyone tells you is possible.

Meantime, again, our buyers already know what a deal looks like, because they’re already doing their homework. So, if we do our own “farm-work” correctly, we will both recognize and snap up deals that we can be confident will sell for “x” dollars in “x” days …because we know the market like it’s our farm.

It’s not brain surgery, except if we don’t know our farm, it might as well be.

18

Okay, I just got an email from a major real estate wholesale “guru” whom suggested that you should build a buyer pool first, and then find a property for that buyer. Hmmm. I agreed with this, but not for the reason(s) she suggested…

Her rationale was that she didn’t want to waste time looking for property nobody wanted. Hmmm, again. Well, I agreed with that, too, but not for the same reason(s) she mentioned.

It depends on whom is first choosing the property type, size, and location… the buyer or the seller.

If this guru found 20 cash buyers, she would also find buyers with 20 different cash buying requirements. Then she’ll have to make offers, negotiate, drive, phone, mail, update websites, answer emails, answer calls, send emails, check comps, and otherwise tie up at least 20 different property types, sizes, and locations in order to match the criteria of any of her 20 cash buyers… in hopes that they are serious buyers. Really?

That’s is such a dysfunctional approach that it can only work in a parallel universe. :banghead :banghead :banghead

Instead, she should first know her market like the back of her hand. Then make offers, negotiate, drive, phone, mail, update websites, answer emails, send emails, check comps on say 20 different properties until she can tie up one of them and then start marketing it to find 20 buyers.

This way she can scare up the 20 cash buyers that are actually interested in that ‘one house,’ not scaring up 20 cash buyers that want 20 different situations.

Let me illustrate in practical terms how I agree with the guru about buyer’s list, but why I agree…

In early 2009 I advertised a phantom, 5-year old, 2,600 sqft, 4/3/3 house, priced at about $260k, asked for 10k down, and finally offered ‘no qualifying’ financing …just to check the temperature in my farm. I wanted more than $10, but that was my minimum acceptable down.

Within six weeks I found more than 40 buyers with at least 10k for a down who wanted “THAT” house. Now …I knew that I found a profitable niche to focus on. Out of those forty buyers, three or four of them had over $40k available for a down, and one had $60k.

Now, if I had wanted to attract cash buyers, I would have asked for cash instead and waited to see who called me. Now, this would tell me if there were enough cash buyers that liked what I was offering, and define what I needed to tie up in the future.

Interestingly, no conventional buyers called about my phantom, seller financing, ad. Why? I think it’s because my price was too high for conventional buyers. I knew that already since I understood the market values, but I was fishing for buyers who needed seller financing that also had at least $10k for a down …and I found 40 of them. Who knew?

So, the moral is, if we want to wholesale fixers, we can advertise a phantom wholesale fixer to cash-only buyers and see who calls us. Then, we’ll first discover if there are cash buyers for what we might have to offer.

Meanwhile, testing a new market is the only reason I can think of, practically speaking, to justify advertising for buyers before we have something to sell. That said, I automatically build and maintained a buyer pool simply by advertising the actual deals I have for sale. Who knew?

Hope that somewhat clarifies the confusion generated over conflicting ideas about advertising for buyers in advance, or not.
:beer

19

Interesting conversation. But I still say buyers lists are a bunch of crap! :bs

In an ideal world they work. When you hear gurus talking about it, it sounds logical and brilliant even. But talk to folks who actually buy and sell, and it isn’t something that is reality. Lists for buyers are retarded. I think the only reason to have a buyers list is if you are lacking confidence and having some sort of list will make you feel important. Look, I’m somewhat kidding about that. I see merit in asking investors what they’re looking for and so on. But you know what? I had an interesting conversation with a fellow investor recently. This guy has over 30 years experience and we’ve worked together before. What we agreed on is that a very high percentage of people who call themselves cash investors are really wannabes who don’t know what the hell they’re doing. Pure phonies. So its no wonder even seasoned guys get frustrated with these lists. It’s because they haven’t figured out that these ‘cash buyers’ are really lying out of their arses! I hate to be the merchant of truth, but buyers lists are a bunch of crap!!

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What do you mean advertised a phantom? I am still learning the lingo in real estate investing, so I don’t know what that is.