There is a constant debate going on in the wholesaling community on whether you should find motivated sellers or cash buyers first. Let me tell you why I'm Positive the cash buyer list should come first...
People will say find a great deal, and the cash buyers will find you. Well, for them to "find you," it requires you to advertise the property online via Craigslist or some other real estate website. In doing so, you not only run the risk of the property owner seeing the ad (I've seen this happen, it's not pretty).
You also are breaking the law and can face hefty fines and possible jail time because you're not a licensed realtor, therefore, not legally able to advertise a house you do not own for sale. (It's NOT worth the risk)
But for a moment, let's pretend the owner doesn't see the ad(s), and you don't get in trouble with the law. There are a couple more great reasons to have your cash buyers list built before you put the first property under contract.
Reason # 1 The clock is ticking - usually, you have 30 days to close on the property, and those 30 days can go by quicker than you think.
You'll be rushing around trying to qualify buyers, and some of them will end up being other wholesalers trying to sell your property to one of their cash buyers (This is called a daisy-chain). Others may not have the money or ability to close for whatever reason.
Then you're stuck with making that dreaded call to the seller, informing them you can't close on the scheduled date and begging to extend the contract. This Is Not A Fun Call To Make!
Reason # 2 You want to get paid - Getting to closing is the goal of every real estate wholesaler because that's when you get paid!!! Having a list of qualified, experienced, and knowledgeable investors can make the process as smooth as glass instead of it being an endless nightmare.
This is basic, but I feel I should cover it so everyone understands... A cash buyer is a real estate investor that has the cash to close a real estate transaction without obtaining a mortgage or getting any other type of financing.
That means Cash Buyers = FAST CLOSINGS
Okay, now with that out of the way, let's continue...
There are many ways to locate cash buyers, and like anything, some methods are better than others. No list of marketing strategies is ever complete because they'll always be new techniques to come along, but I'll make this list as thorough as possible for you.
I'm going to start the list with what I feel is the ABSOLUTE BEST WAY to have access to every cash buyer instantly.
This is my method of choice when it comes to accessing cash buyers, and I've used this and only this since I started wholesaling real estate.
This database gives you access to every cash buyer nationwide in seconds. Just enter the zip code, city, or area and pull up every investor actively purchasing properties there.
You'll know their name or company name, their mailing address, the address to the property they purchased, what they paid, what it's worth, how many houses they've bought, and so much more.
In addition to having access to all that information when you get a property under contract, you can create a mail piece with the property details and send it to them from the cash buyers' data feed.
As I said, I genuinely believe this is the fastest, easiest, no-brainer way to build a list of every active cash buyer/investor. If you want to learn more about the cash buyer data feed, click here.
Bandit signs are those corrugated plastic signs you see nailed to phone poles at intersections that say WE BUY HOUSES and are also used to promote other businesses.
The reason they're referred to as bandit signs is in many cities and counties, its against zoning laws to put them out (except for politicians, go figure right LOL)
Many wholesalers use bandit signs to build their cash buyers list by placing them around town with a short message to draw the attention of any investors that might be driving by.
These will make your phone ring, but you will have to determine who is an actual buyer, who is another wholesaler, and who is an investor wanna-be.
You'll also get calls from people wanted you to rent them a house and contractors who wants work, so be prepared to take a lot of calls and spend time trying to determine the good from the bad.
This method of finding cash buyers is similar to the bandit signs we just discussed, except you place ads online with sites like Craigslist or other real estate sites. You'll create a good headline to draw them in and have the proper verbiage in the body of the ad to entice them to contact you. Below are some examples:
Ugly House For Sale
Handyman Special 3/2 Brick Bungalow
Property Needs Rehab
Cash Buyers Only!
Estate Sale House - Quick Sale Needed
Must Sell to Settle Estate
4 bedroom Ranch
Property Needs Updating
Cash Buyers Only!
Need To Sell This Fixer Upper
3 Bedroom 1 Bath
Great Area, But ran out of money fixing it up
My Loss is Your Gain...
Cash Buyer Needed!
The key here is to post these ads daily online and maybe even in your local newspaper. Also, like the bandit sign method, you'll have to weed out who the actual cash buyers are and be prepared to take a lot of calls.
Try different wording and headlines regularly to see if you can achieve better results, but again the most significant key is placing the ads consistently.
I can't start to tell you how important networking is in this business, and REIA meetings are a great place to start!
REIA stands for Real Estate Investors Association, but you'll also find wholesalers, contractors, and title agents attending these meetings. Sometimes there is a membership fee to join, and others are free, but I'll tell you it's worth the money, so if you can afford it, JOIN!
All meetings are different, but there's usually a point in the meeting where everyone who would like to can get up and do a 60-second commercial. Take advantage of this and get up and introduce yourself. I'd personally say something like this...
"Hi, my name is ________, and I'm a new wholesaler; I'm here tonight to learn some things and hopefully meet other wholesalers and investors. I'm sitting at that table right over there (point at your table), so please come over and introduce yourself if you'd like."
I know this is scary, but nobody will bite you, so try it.
Visit Meetup.com and look for groups in your area.
Have some business cards printed up and take them with you and pass them out. Also, ask everyone you meet for their card; if they don't have one, write down their name and number. Remember, you're building your buyers list.
Many investors that buy and hold don't fix leaky toilets or collect their own rent. They have a property management company do it, so calling on them could open up some doors, BUT... Don't expect to walk in and say hey, give me a list of all your investors and expect them to hand it over (It Won't Ever Happen)
But what you can do is walk in and talk to the owner, manager, or people running the place. Introduce yourself and explain to them you're an investor and come across many houses that you can buy well below market value, and if they know of any investors that would like to speak to you, they can kindly pass along your contact info.
Very often, the owners of property management companies are investors themselves, so these are excellent connections to have if you approach them the right way and build rapport.
Honestly, I'm hesitant to suggest finding cash buyers this way because in this day and age, wholesalers spend WAY too much time on social media (I'll save that rant for a YouTube video).
Signing up for accounts on ConnectedInvestors.com, Biggerpockets.com, Linkedin.com, and Local Real Estate Investing Groups on Facebook would be the place to find investors, but try not to spend too much time there.
Connecting and networking online is a good thing in moderation, but then shut the computer and go meet people in person!
I firmly believe that if you're a wholesaler or investor, you need a website for credibility, but there's another advantage to having one... They can generate free leads!
If you're creative, there are so many ways to run traffic to your website; it's unbelievable. And SEO (search engine optimization) is undoubtedly the best! (and again, free) By adding good content to your website, you can generate leads from people Googling key search terms in your area.
"How to sell my house fast," "People that pay cash for houses near me," and many other keyword phrases can lead people to you if you have the right website and training.
If your goal is attracting cash buyers, handing out simple cards at the REIA meetings that say: "Investment Properties 30-50% Below Market Value! Visit My Website at: www.YourWebsite.com" will undoubtedly get you some traffic.
Listen, I love marketing, and you should develop a love for it too, so start thinking like the person you're trying to reach and ask yourself, where would I be searching for the answer to my problem if I were them ???
I understand you might be working with a limited budget and can't afford every program and new system that comes your way. But if you only have the money for one thing, make it a professional-looking website that will give you credibility and can generate leads for you.
*** I recommend Investor Carrot for the very best lead generation websites and SEO training. You can check them out by clicking here ***
Some Investors put out "we buy houses" signs just like wholesalers do, so when you're driving around town and see one take a minute to write down the number.
Remember that some of the people you talk to will be other wholesalers and sometimes will initially try to hide it. So approach it with honesty. Tell them you're a wholesaler building your list of cash buyers and ask if they're a wholesaler or investor...
(Sometimes a wholesaler might tell you they're an investor so you'll send them deals they can send to their cash buyers, so be careful of that)
Ask them to tell you what kind of properties they're looking for. Do they fix and flip properties, or do they buy and hold? Also, ask what their price range is. Do they have specific areas they buy in?
Have a pad and paper or recorder on your phone, so you can capture the information needed that will allow you to know what kind of properties to send their way.
This is another excellent way to connect with investors and possibly someone who wants to sell a property. Go into your local Craigslist, Zillow, or online real estate classified and search for rental houses in your area. (make sure to select houses only)
Find people renting houses in your area, tell them you're an investor that often comes across deals you can't budget for, and you're looking for other investors that might be looking for below-value properties.
If they're interested, write down their name, number, and buying criteria. Also, invite them to visit your Investor Website (mentioned above) and have them fill out what they're looking for there.
Again, in this business, networking is crucial, so start calling!
I can pretty much guarantee there is a housing authority office near you, and they keep a list of available Section 8 housing in your area. Look up the office near you, and when you're in the neighborhood, stop by and pick up the list, it will have the names and numbers of all the Section 8 landlords.
By now, you know the drill... Pick up the phone and start calling them, introduce yourself, and find out if they're buying, and if so, what are they looking for.
Chances are some experienced wholesalers in your area have already built a great cash buyers list. That is the reason that in addition to creating a cash buyers list, you should be making a wholesaler list.
I've done many JV deals, and I love working with other wholesalers, and you should too. I mean, come on, they had the same desire to jump into this business, so you likely have something in common.
Listen, you're brand new in the wholesaling business, or you wouldn't be reading this course, so do yourself a favor and start networking with other wholesalers. Find out who they are, take them to lunch, and buy them coffee or a beer. They are a wealth of knowledge and experience, so find out who they are and do some deals together!