what is the motivation for a cash buyer to assign vs going thru a RE?

i’m as green as green can get right now with regard to my foray into wholesale real estate. recently, i was put in a rather uncomfortable position. i was explaining the process of the wholesale deal to a longtime friend of mine who’s owned a few homes etc. etc. (i’m not, and never have been a homeowner). her eyebrows raised in that familiar “questionable” way when she interuppted me and raised the following questions:

  1. what is the motivation for the cash buyer, i don’t get it?
  2. why doesn’t the buyer list with an agent and just pay the 6% commission rather than an assignment fee?
    3.the last one was killer…“why don’t you just get your real estate license and to it the normal way?” (i did tell her i was considering this)

the look on my face was something like this :shocked i didn’t know what to say?!? i felt like the bombs just kept dropping (not to mention she felt it sounded “shady”). i assured her it wasn’t…but.

can someone advanced/seasoned answer these questions for me please. i left feeling deflated, but not defeated.

I’m going to second the " :shocked" with my own “:eek”.

What is this friend of yours a landlord or ?

You tell her the following responses:

  • Depending on the cash buyer, they do not like using a realtor for various reasons of their own, which sometimes can be hard for the average person to understand. The simple fact that if the buyer finds a bad realtor, it could ruin any relationship and turn the buyer off completely. These cash buyers are looking for deals from 30% to 70% off ARV, and the less red tape they need to go through to get a property, the better for them. In addition to having a cash buyer, the transaction goes quick - sometimes in a week. If there is enough of a spread in any deal for you and the buyer to make money (and YOU don’t take advantange of the buyers), they will keep coming back to you.

  • You shouldn’t need a realtor lic. to invest in real estate,(unless YOU really want to get one yourself). Look at all the for sale by owner (home owners) who are selling their homes without realtors. Basically with them, it comes between the home owner, the title company and the end buyer (depending on their financing). Plus, it’s hard to find a realtor these days, when their office closes for lack of business or other reasons. (Realtors are helpful in different ways, if you know how to treat them right.)

The answers you need are in those points mentioned above. Your main objective or statement is that you are helping buyers and sellers by creating win-win situations for everyone. You should also find someone who will not only back you up, but who will support you for what you are doing. It doesn’t sound like she will be one of them. She will probably always “not get it”. (I am not knocking her - just giving you my 2 cents) I hope this helps you. :crossfingers