How can you find more buyers for your real estate investment deals?
Buyers are a critical part of investing in real estate. You don’t get paid until you sell the property and cash out. Even as a long term hold landlord you can’t really calculate your true net gains or losses until you’ve sold the asset. Some consider the buyer – property equation a chicken and the egg issue. Which should come first; finding the deals, or finding the buyers? This is particularly true for wholesalers and the elite group that have begun reverse wholesaling. If you control the buyers and the flow of cash, then you control the market. You control what gets sold and what doesn’t.
Controlling the buyers and the cash starts with knowing who the buyers are, and then finding the best tools, strategies, and resources for honing in and connecting with the buyers you want to work with.
Type of Buyers in the Property Market
Home Buyers Using Conventional Mortgages
These buyers are using traditional financing from banks and institutional mortgage lenders. Most are still putting up a reasonable down payment, but can find the loan process grueling and unreliable, even if they have good credit and incomes.
Buyers Using VA Loans
Buyers using government loans like USDA and VA loans can be highly valuable to the market due to being able to finance 100% of the purchase price of a home. That keeps more buyers in the game. However, they are often still limited by location, price, and underwriting conditions.
Domestic Real Estate Investors
US investors may have a variety of finance options at their disposal. This may include hard money loans, rehab loans, asset based lending, and lines of credit. These loan sources can provide more flexibility, especially when it comes to funding and purchasing properties which need repairs, but there can still be hoops to jump through.
Foreign Investors
Investors from abroad can have even more financing options at their disposal. They may be able to obtain financing here in the US, in their home country, or from international mortgage brokers. They can leverage properties they hold overseas, and may take advantage of multi-currency mortgages and low international interest rates.
Cash Buyers
Cash buyers may be retail buyers, foreign investors, domestic rehabbers, landlords, or funds. Don’t underestimate the advantages of having cash buyers. They’ll be able to close faster, speed up flips, minimize potential hurdles, and facilitate more volume.
FINDING CASH BUYERS
There are a variety of ways to find cash buyers for current and future real estate deals. Some of them are very familiar such as using direct mail, email, real estate blogging, networking and social media. Others are often overlooked.
SOI
Tapping into your sphere of influence is one of the first things they’ll teach you if you join a real estate brokerage. Yet, few ever use it. Most initial deals for new Realtors, investors, and mortgage brokers come from your circle of preexisting contacts such as family, friends, and coworkers. Be sure to tap those resources. You’ll be kicking yourself if you later find out that one of them purchased a house for cash from one of your competitors.
International Marketing
Investors should not limit themselves to looking for cash buyers in their local markets. Some of the best sources of cash buyers may be across the state, out of state, or overseas. International buyers make up a significant portion of annual transactions, and many are cash buyers. In some years and cities foreign cash buyers have made up 40% to 60% of all sales. Consider reaching them at home via affiliates in their home countries as well as via Google ads. It is now easier than ever to translate your website and ads with a couple of clicks.
Referrals
Not all of your efforts need to be focused directly on the cash buyer themselves. Considering connecting with more influencers and professionals capable of regularly referring cash buyers to you. This may include attorneys, financial planners, insurance agents, and others.
Finding Cash Buyers with Public Records
With so much noise about social media and video many investors seem to be completely overlooking some of the best leads on cash buyers. There is a lot in public record. There is information on those that have been paying cash for other properties, owners which have free and clear properties, investors, and absentee owners. Public records can serve up contact information for these cash buyers including names and addresses. Of course going down to the courthouse and records office may not be the most efficient method or fastest way to obtain the data, but it is there. Most counties now have a lot of this information online via the local property appraiser’s website. Yet, this can still be extremely cumbersome and time consuming. By tapping into software and tech tools investors can retrieve this data in an organized format, in bulk, far faster, and with additional desired filters. Some providers can even compile this data with more contact information such as phone numbers and email addresses. Even better; this can be one of the most affordable ways to generate and obtain cash buyer leads.
FINDING CASH BUYERS ON MLS
Cash buyers can even be found through the MLS. The Realtors’ Multiple Listing Service, or dealing with real estate agents in general may not be the first thought that crosses investors’ minds, but it can be an option. Statista reports that as of mid-2016 Zillow.com and Trulia received an average of 59 million visitors per month, and Realtor.com was receiving an average of 55 million visitors per month. There has to be a few million cash buyers in that pool. These buyers may be reached by running paid ads, listing properties with an agent, and using flat fee MLS listing services. Many may also be reached by simply tapping Realtors for leads as well. Look at agents and brokers as potential business partners and allies, not the competition and create more volume and win-win deals for everyone.
Tips for Maximizing Cash Buyer Leads
Generating cash buyer leads is one thing, making the most of them takes some extra effort. Vetting all of your buyers is smart. Make sure you are spending your time with good leads and buyers. Make sure they really have the cash. Consider how easy they will be to work with, if they share your values, and perhaps that the cash is from a legal source.
Simply looking for cash buyers to close your next deal may work, but it will always mean harder work, and more expensive marketing. Consider stock piling cash buyers for the future and building long term relationships that will result in plenty of repeat business, and referrals. Keep in mind that these cash buyers may also one day become private lenders and sellers who can use your services.
Serve your cash buyers well so that they’ll eagerly look to do business with you, and so your credibility will grow, and reputation will spread. That means giving them good deals, providing reliable real estate comps, delivering accurate repair estimates, and fair disclosures. Perhaps you’ll even go as far as introducing them and connecting them with your other professional team members and lenders so that they can recapitalize and buy more properties with cash. Don’t neglect customer service either. Real estate may be very transactional, but everyone wants to be treated well, and feel their business is valued. It can take a little extra work and investment, but it is so worth it. You put in enough to land those buyer leads, don’t burn them for lack of service. You don’t have to burn yourself out to accomplish this. Look for tools and assistants to improve the service you can provide. It will pay off.
The more you can automate and systemize your cash buyer lead generation, your follow up, your solicitation of referrals, and service the more cash buyers you will gain, the higher your conversion rates will be, and the more deals you’ll do, while enjoying more profits.
There are many cash buyers out there seeking deals. Get the right tools, and plug in the right strategies and you’ll find them. Just don’t stop there. Be sure to maximize each lead and referral source to expand your potential. Once you have the cash buyers, you’ll find the properties, and the lenders will line up to fund deals when needed. In the process be sure to document, save, and nurture all of the other leads you generate as well. One day you may want more buyers using financing to keep up your volume, or may find many of those buyers are now cash buyers themselves. Make sure you are the first one they think of when they have the money to buy real estate.
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