Having cash buyers at the ready is an integral part of being a successful REI (Real Estate Investor), say as a Wholesale Property Flipper (WPF). Without the exit strategy money that cash buyers bring to the table, a WPF simply cannot be successfully completed.
Top 10 List of Ways to Find Cash Buyers
1. Rehabbers. Most of them are pretty good at hammering nails, painting and putting up wallboard—some of them are not that good at getting wholesale deals. That is where you come in. You can offer to co-wholesale your deals to them. In addition, many contractors are also rehabbers for their own account.
2. Craigslist ads. Two approaches to take:
a. Run your own ads, on a regular basis, advertising the properties you have for sale and/or that you are looking for cash buyers for your hot deals.
b. Answer CL ads run by others, i.e. those seeking to buy or sell properties. Many of the “sell” listings are actual investors in your market area. Even though they are “selling” in this particular ad, there is a good chance they are interested in buying as well, if not now, then down the road. Add them to your list.
3. Investor-friendly realtors. They earn commissions when sales happen. You offer them the opportunity for single or even double commissions on each closed deal. Many of them have off-market or back pocket listings; they know the “lay of the land” in their geographic area. Cultivate them.
4. REI clubs. Join up and then reach out to other members via Haves/Wants, classified ads, postings they take out in the group’s newsletter or blog. Network with as many people as you can. Spread the word that, from time to time, you have properties for sale at very attractive prices.
5. Respond to “bandit signs” that you see around different places with verbiage such as “We Buy Houses”. Most sign-posters buy and sell properties and thus are potentially good co-wholesale leads.
6. Put out your own bandit signs with your contact info. Those who are in the biz may reach out to you. Network with them.
7. Real estate auctions and tax deed sales. Many attendees at foreclosure/tax sales leave empty handed. But they are there for a reason: to buy properties. So, pass around your business cards to everyone there. And get their business card in return. Add them to your cash buyers list.
8. Facebook real estate investor groups. There are hundreds of REI-oriented groups of all types and sizes on the internet. Google search for the ones in your city or state that maintain websites. Join up.
9. Bigger Pockets, Connected Investors and Linkedin are also great sources for investors, many of whom are buyers. They have blogs, postings, threads, groups etc. Join each of the three. There are hundreds of thousands of investor members, in total, on those three websites.
10. Keep in touch with all your previous clients. Email them on a regular basis. Ask them for referrals.
B. How to tell the difference between “tire kickers”, etc. and real buyers with cash in the bank
1. Make SURE they actually have the money in the bank now to buy the property from you. FYI: a POF (Proof of Funds) is not good enough anymore. Instead, request that the cash buyer provide you with a current bank statement–i.e. issued today–showing they have the funds, ready to go, right now.
2. The cash buyer needs to agree, in writing, that they will not dispense the (now dedicated purchase) funds elsewhere during the entire tenure of the contract and escrow.
3. To really nail it, require that they take the funds from their checking account and put it into a CD of short duration (a few days, a week, a month–whatever time the deal requires). This locks up the funds just in case the cash buyer should get tempted to invest in another deal, other than yours.
4. Background check potential buyers as much as you can. Depending on your resources, you can undertake a skip-trace to see what their REAL track record is. Another good idea is to Google search the person and/or entity you are dealing with. For example, “Joseph Jones” or “Jones REI LLC”. You might have to narrow the search by adding a city or state, etc. until you are sure you are dealing with the right person or company. Conversely, you can expand the search by Googling their phone number, their email address, their website. Sometimes a 30 second Google search can surface some really important info, such as criminal records, a string of civil law suits, bad reviews, SPAM and SCAM alerts, etc. Also, one particular website to check out is ripoffreport.com. Use them to make sure you are not dealing with a total flake.
What We Do: Quickly provide short-term, first position, private capital (WPFF) funding, to real estate wholesalers, among others. Contact info: Tod Snodgrass, firstname.lastname@example.org, 310-408-7015