Making a deal with a cash buyer is extremely desirable for most people selling real estate. If you are a wholesaler or a flipper, then we highly recommend compiling a list of potential buyers who can pay in cash—closing a cash deal makes the entire process a lot more clean-cut. While many people in the industry know this, they still struggle to find cash buyers and build long-lasting relationships with them. It is actually a lot easier than you think; we have put together a list of pointers that can help you find more cash buyers for your business.
If you are unfamiliar with what a “cash buyer” is (whether it is because you are new to the industry or some other reason), do not worry. The definition is simple: when somebody is a cash buyer or makes a cash offer, that person or company wants to purchase a property without using any mortgage loans or other means of financing. These kinds of clients are often preferable for sellers because there is a lower risk of fall-through and it takes a lot less time to close the deal.
Lengthen (or Start) Your List
When you find a cash buyer, it feels like you found a nugget of gold at the bottom of a mine. However, there is a good chance that you might actually be in a goldmine without even knowing it. You just need to do a little bit of digging:
- Market yourself. This one might seem pretty self-evident, but there are so many real estate professionals who dive into the business and assume clients will just fall right into your lap. However, just setting up a profile on LinkedIn or BiggerPockets is not always enough. If you are in an area ripe with investor activity, think about setting up signs, sending out postcards, or placing ads in your local newspaper.
- Market yourself again (but this time online). Because marketing is so crucial to your success in the real estate industry, you have to make sure that you are keeping up with marketing trends—and it looks like everything is going digital. Create a website, write a blog, pay for some advertisements, brush up on your SEO, and use social media to your advantage. The internet is one of the best ways to read your audience nowadays, so use it to your advantage.
- Network like your life depends on it. The best way to find a certain kind of buyer is to meet a lot of them. Do what you can to meet new prospects, determine their criteria for properties, and, if all is well, add them to your list of contacts. Take advantage of Real Estate Investor Association conferences, BiggerPockets meetups, and other such gatherings for people in the real estate industry. You never know when you might bump into somebody who needs exactly what you have to offer.
- Get referrals from associates. As a wholesaler, investor, or someone who regularly sells houses, you probably have connections with a lot of other real estate professionals—and those professionals are likely working every day with people who have the cash to buy properties. Reach out to real estate agents, title companies, mortgage bankers, attorneys, and other associates of yours to find some cash clients. If you are able, you can even offer them commission or finder’s fees.
- Pay Google a visit. Everybody uses Google so often for the simplest things, but it can be used for more than finding cat videos. Search common investor keywords, such as “we buy houses,” “sell property fast,” and other such things. Pay attention to ads! We normally gloss over them when we are doing a routine search, but in this case, the people and companies who are in those ads have the money to pay for them.
- Do some data digging. Nowadays, it is much easier to obtain large, targeted lists of potential cash buyers. You can get a list of people who own homes free and clear of mortgages, out-of-area investors, or multi-property owners.
- Attend property auctions. While this comes hand-in-hand with networking, it deserves to be emphasized. The people who are there are usually buying properties with cash, so auctions are often full of potential cash buyers. Pay attention to who bids, how much they bid, and which type of properties they seem to want; this can help you identify potential buyers.
- “Drive for Buyers.” This is a term that has been thrown around a bit in the real estate industry. Essentially, it means that you drive around, looking for properties for sale or for rent, call up the owner, and see if they are in the market for a new property. Worst case scenario, they say no. Best case scenario? You’ve got yourself a new client.
- Software or service. If none of these methods tickle your fancy or you want to give yourself an extra boost, you can always sign up for a software or service that compiles a list of cash buyers for you!
- Take a look at the competition. Sometimes other wholesalers or investors will post properties they have recently sold on their website. With just a little bit of research, you can find who bought the home, how much they paid, and a myriad of other details. Thanks to your competition, you could have a potential cash buyer right at your fingertips—and you know at least one area in which he or she is interested.
Especially in the current market, cash buyers are highly desirable for any real estate investor or wholesaler. That is why you want to be the first person they call when they want a property. Competition for cash buyers is way higher than it used to be (and that is, in part, due to the dwindling numbers), so you need to make sure that you are at the top of their list—and when you use the methods listed above to find the most promising clients, you will be.
Feel free to contact us if you have any questions!