It is a common knowledge that it’s a good idea to create a network of buyers / investors when one does wholesaling, in advance. So that when a wholesaler has a property to assign or to sell, he/she doesn’t have to waste time when the time is of the essence, and the whole transaction is on the line.
It also has been suggested that a wholesaler needs to be sure that his buyers are what they say they are, in terms of their ability to close, i.e. their finances, credit, etc.
Question:When the wholesalers first create that network of buyers / investors, HOW TO CONFIRM THE PROSPECTIVE BUYERS’ FINANCIAL CAPABILITIES?
I mean confirm INDEPENDENTLY, since simple asking doesn’t do it.
Note: We are discussing buyers / investors, NOT retail buyers.
Ask for bank account statements, ask for a preapproval letter from an independant lender (not just one he supplies). In order to make an offer on a property in our market buyers are required to come up with verification of cash funds, or a preapproval letter.
Please note there is a difference between a prequalification letter and a preapproval letter. A prequalification letter quite often only means that the buyer appears financible but has not been run through a lender and been preapproved. A preapproval actually means that the numbers have been run through a company and documents such as w2, and bank statements have been verified.
Good luck getting any investor to hand you his bank statements.
Why not just simply ask if he is the one that is buying andmakes the decisions or is he in some type of “network” where 9 times out of 10 the deal just dies because they take to long to get back to you?
Seems to me that you were answereing those “I buy houses” ads and all of them are trying to get you to L/O or option your deals.
