As a real estate wholesaler, having a quality cash buyers list is critical. It can literally be the difference between a contract becoming a payday or turning into a lost deal. It doesn't matter how many wholesale deals come across your table if you don't have anyone to buy them.
While building a list of cash buyers can seem intimidating at first, this article will explain how cash buyers work in real estate and why you need them when investing. Then we'll go over some tips for where to find cash buyers and how to build a list for your business.
How cash buyers work in real estate
Sometimes in real estate, property owners are in distress. They may be going through a financial hardship, their property could be in poor condition and unable to qualify for financing by a traditional buyer, or they may just need to sell quickly. Cash buyers will make an offer, and if that offer is accepted, they'll buy houses at a discount in exchange for a quick, all-cash closing.
Typically, cash buyers make selling your house easier and faster than it would be with a real estate agent and can provide a cash offer in as little as a few days or hours. There are thousands of cash buyers across the country who you may see market online or on signs by the side of the road saying "Properties for Cash" or "Cash Home Buyers."
Why you need a cash buyers list in real estate
Cash buyers are important in all facets of real estate investing, but they are especially important for a wholesaling business. Wholesaling is when an investor finds and negotiates a discounted all-cash offer for a property and then assigns their interest in the contract to a cash buyer at a slightly higher price.
The wholesaler earns a profit from the difference in pricing between the cash offer and the sale price to the cash buyer. Wholesalers, in particular, need a solid list in order to sell the real estate they have under contract. The more cash buyers they have in their wholesale buyers list, the more likely the property will sell and go to sale quickly.
How to build your own real estate cash buyers list
If you want to build and grow your list for your investing business, you have to start networking with or market to cash buyers. Cash buyers in most cases are experienced real estate investors, but they could be busy professionals, small-business owners, or even successful real estate agents. They don't necessarily need to have their own disposable money on hand but instead should have the knowledge and connections to be able to purchase real estate quickly and for cash.
In today's market, with more and more people going online to sell their homes, it's a good idea to have a website with a landing page for both sellers and prospective cash buyers. This helps capture potential leads and store their information in an efficient way.
Make sure to vet your buyers. Unfortunately, a lot of real estate investors are tire kickers, and asking questions when you meet a potential cash buyer will help you determine whether they are serious as well as what they are looking for. Some questions you can ask include:
- What type of properties are you looking for?
- Is there a specific neighborhood, zip code, or county you buy in?
- How much money do you have available to deploy currently?
- What is your investment or buying criteria?
- How many properties have you purchased for cash in the past? OR, How long have you been a cash buyer?
- How quickly can you typically close?
Where to find cash buyers
A great place to begin looking for cash buyers is by calling the numbers on the signs you see on the side of the road. While some numbers will be for wholesalers, many will be for direct buyers. Another place to look is at your local REIA (real estate investing association). REIA meetings can be a tremendous place to build your list while learning and networking with other investors.
Additionally, you can look online at places like Facebook Marketplace (NASDAQ: FB) or Craigslist, placing your own ad for cash buyers or looking at who is active in these places. Facebook groups and BiggerPockets are also a great way to network with other active investors.
If you have a target market you will be focusing your marketing efforts on, look for a recently completed rehab and search public records to see who the company or investor was. I've sold properties simply by looking in public records for real estate investors who are actively investing in that area or recently owned a real estate investment close to mine and then reaching out to them from their website or sending a letter.
Building your cash buyers list takes time. Attending real estate or investing events where people likely have money to buy properties for cash, while establishing a quality lead funnel, will improve how quickly your list is built. Just remember that quality is more important than quantity. It doesn't matter if you have 100 people in your email list if none of them will actually buy the property you are marketing.