Category: Wholesaling

Cash Buyer Leads, How To Find and Generate Leads

In the real estate market, cash buyers are considered important because they provide liquidity to the industry. Cash buyers, from the term itself, are people or groups who opt to make real estate deals with cold, hard cash. They can be an investment group, corporations or individuals. Cash buyers may be heirs of estate properties who can easily give out cash as payment for the deal, business owners who are able to pay a big amount of money, or seniors who have saved enough equity from their younger years and are now enjoying their pension benefits. In other words, cash buyers are individuals who are truly able to pay cash for real estate. They attract investors or sellers because of this. They can make deals easy with their cash offers. And, they can become long-term investors once they develop trust and faith in real estate.

Leads, on the other hand, are simply future potential clients. When you have an individual’s name and contact number, or other contact details, then you’ve got yourself a lead. It does not necessarily mean that this person is interested in real estate. It just means that he or she is a potential client because you have his or her contact information, and you can try your luck at introducing yourself, presenting the properties you might sell and getting yourself a deal.

Cash buyer leads, therefore, are just names of potential clients. Now, the question is, how do you identify a cash buyer lead from other types of leads? This is when a basic knowledge of real estate comes in. You need to understand the different between these types of leads to make things easier for you. And, where can you find cash buyer leads, you ask? Everywhere. Like other real estate leads, cash buyer leads can be found anywhere.

To find them you need good and effective marketing. There are a lot of ways to market your business. You may choose to run ads in the newspapers, on bulletin boards, and on the radio. You may also post ads on websites like Zillow, Craigslist, or your own website. If you don’t and can’t have your own personal website at the moment, but still want your ads or posts to be more personal, you can always turn to social media. Market yourself and your business through Facebook, Instagram, Twitter, LinkedIn — the list goes on. There are a lot of options to choose from on the Web.

Furthermore, an even more personal approach is an outreach. It’s more personal because you get to contact people, maybe through email, snail mail, or mobile messages and calls. Outreach is simply reaching out to a list of people with working and valid contact details and offering them your business deal right away, or simply inviting them over for coffee so you can discuss more. Even the open world can be a good source of leads, if you know where to look. One of the oldest yet most effective methods is word-of-mouth. Be free to roam around, knock on houses, talk to people, and the like. It’s a process that requires quite an amount of time and effort, but it still works.

Building Your Credibility as a Wholesaler

So, you’re new to investing and you’re focusing your strategy on wholesaling. That’s a great place to start. I know you are all thinking, “How are these investors are going to take me seriously? I have no idea what I am talking about!” And your right, so before you go rushing out to build relationships with investors, do a little research. Let’s talk about some ways you can build your knowledge and credibility.

• Learn the Lingo: Start by learning the language of real estate. Search out real estate terms online and make some flashcards or something to help you remember the concepts. Learn about the different investment strategies in real estate as well. Once again, just Google it.
• Script it Out: There are hundreds of scripts you can hunt down on the Internet. Find some of them and make them your own by putting your words and personality into them. Next, practice your scripts with someone. Work out your nerves. You don’t have to be an expert, but be confident on how you present yourself.
• Don’t Lie: Never make yourself out to be something you’re not. If you are new, let them know, but be confident on how you present yourself. People will want to work with you because of your personality. Never get caught in a lie with investors because if they don’t trust you, they won’t want to work with you.
• Study Your Market: Get smart about your market by seeking out investment clubs in the area and attend their meetings. This way you will be around people who love real estate as much as you, and you can gain a lot of knowledge from these types of clubs. Next, search out your market statistics online. I suggest bestplaces.net because they have a ton of information for you and make it easy to understand. Also, talk to realtors who work with investors and get their opinion about the market.

These are just a few things I recommend doing to increase your understanding of real estate. Building your confidence using these methods will also build your credibility among your investors. Take your time to learn. Don’t rush out there and make yourself seem uneducated. Real estate is going to be around for a long time, so get yourself setup correctly.

Wholesaling Rental Properties and the BRRR System

Almost everyone who gets started in real estate investing hopes that one day they will own a whole bunch of highly profitable rental properties. Yet due to lack of experience and money, they begin wholesaling properties to experienced, well-funded investors who rehab them and sell them to homeowners. This type of wholesaling has worked for many beginners over time; however, it might not be the fastest way to get to that long-term goal of owning all those “cash-cow properties.”

Some people find it easier to wholesale rental properties directly to landlords rather than to rehabbers who sell to homeowners. “Gosh,” they say, “there are hundreds of people who own rental properties that they paid for with cash in almost any area of the country. Not only do these people want to buy more rentals, some of them want to sell some of the properties they have.” This can be a goldmine for wholesaling rental properties because of a host of factors. Let’s look at those factors:

1. It is easy to find buyers and sellers of rental properties through lists, title companies, real estate investing clubs, and even signs and ads posted all over the place.
2. Rental properties are valued based on three factors:
   1. First is the return on what you put down to buy the property. This is called the “Cash on Cash Return.” To help your financing efforts, remember that many sellers are willing to carry mortgages for little down. Many banks will finance 80% of what you buy the property for.
   2. Second is the return in relation to the purchase price of the property. This is called your “ROI” or return on investment. It is difficult, even impossible, to find safe investments secured by real estate or anything else of stable value that offer such returns as real estate does.
   3. Third is the ability to fund the property. This is called the “DSCR” or debt service coverage ratio. Banks want to see how much you have after expense income in relation to how much the mortgage payment is. For many, this is a difficult math problem. But finding great rental deals is just that, a math problem! It is not based on fickle market conditions.
3. Rental properties can be wholesaled at a profit based on the money the property makes. They are often even easier to sell if they don’t need work. Hence, you can make money very quickly. You just need to find the deal and present it to your buyer.
4. Wholesaling rentals as an addendum to your existing wholesaling business will increase the possible deals you can do. Further, the more you learn, the more you can earn because people with money are always looking for skilled people to work with.
5. Areas that are close to colleges, universities, hospitals, military bases, shopping centers, and fast public transportation are ideal and lend themselves to bigger profits. Homes on main roads that won’t sell to homeowners can often be rented for top dollar to accountants, consultants and other zoned businesses. It is often easy to rent properties on main thoroughfares with a simple “for rent” sign because so many people see the sign. It pays to advertise, and advertising skills are well paid.
6. Can you manage a rehabber or do licensed rehab work yourself? If so, you can add value to what you offer as a wholesaler.
7. Can you find a tenant and a property manager or are you a licensed property manger? If so, you can add value to what you offer as a wholesaler.
8. Do you have or know someone who has money to invest in finding, taking ownership, and fixing a property to make it “rent-worthy” so you can put a tenant and property manager in place? If so, you can add value to what you offer as a wholesaler.
9. Banks will often refinance a rental property for 80% of 100 times the monthly rent revenues. Hence, every $1,000 a property rents for will be valued at $100,000 and will finance for $80,000. Remember, you are fixing properties to increase their value. Every dollar in increased rent is worth $100 in value. If you can do the things above and find rental properties that will refinance for way more than the cost of buying them and fixing them up, you can add SIGNIFICANT value to what you offer as a wholesaler.
10. Do all the above or call the advisory line to learn how to do all the above and you can make what other successful wholesalers are making doing what is called the BRRR System of Wholesaling (Buy, Rehab, Rent, and Refinance). There are wholesalers who make anywhere from $15,000 to $35,000 doing the BRRR System and don’t use any of their own money.
11. Every one of you reading this has “all-you-can-eat” coaching help on the advisory line. Let us help you learn how to do this so you can make the long-dollar!
12. Are you willing to learn how the numbers work? Spreadsheets to help you zero in on the values are included with this article! A website you can visit to learn how to use these spreadsheets is also included with this article: https://www.youtube.com/watch?v=3h7QmhFO3EI&t=2s

Wholesaling

If you are just beginning to wholesale and finally have a property under contract, what’s next? Your focus now has to turn to finding a cash buyer, as quickly as possibly, who is interested in the property for a fix-and-flip or a rental. So, how do you find this type of investor?

First, create an email brochure that includes all the information about the property: address, description, price, rehab cost, after rehab value (with comps), pictures, an action line saying, “The first person to bring a non-refundable earnest money deposit of $2,500 will get this property,” and, of course, your contact information.

Next, send a copy of the above email to all the cash buyers you have qualified. Then call and let them know you sent them an email of a deal they will be interested in and get them out to see the property. Then start marketing the property by creating bandit signs and ghost ads that have all the information on the property, except the address. When potential investors call, get their email and send them a brochure giving them the address and encouraging them to see the property.

Next, attend several real estate investor clubs and pitch the deal to everyone there. Then hand out brochures and your business card as you collect their contact information. Also, attend foreclosure auctions and let the bidders know about the deal. Then start calling landlords and pitching the deal to them. Continue by calling “We buy houses” ads online and telling those investors about the project. Follow up by calling members of the Better Business Bureau who are investors and pitch the deal to them.

Lastly, if you are fortunate enough to have Response’s real estate software, you can look up and call cash buyers to let them know about the investment opportunity. Also, contact all your friends and relatives who have money to invest and let them know about the potential profits that can be made fixing and flipping the property or holding it for rental income.

Once you have an investor interested, collect the deposit and get them to sign an Assignment of Contract agreement. Submit both the Purchase Contract and the Assignment of Contract to the escrow company, and they will basically do the rest.