In the current depressed real estate market, selling houses has become harder than ever. This applies to deals that look good. Having a good game plan is a must if you must sell your houses fast and be successful in real estate investing.
In this article, we focus on how to identify qualified buyers with cash to buy your houses. Specifically, we focus on how to market and successfully sell wholesale deals.
You must identify qualified buyers to be successful in flipping wholesale deals.
Identifying the buyers involves the following steps:
1)Build a buyers list
This is one of the golden rules in real estate investing. If you sell houses, you must build a list of potential buyers of your properties.
In order to build a good buyers list, you must have a real estate investor website that is fully equipped with the ability to automatically build your buyers list as you sell your houses.
The first thing you do when you get your next deal is to email it to your buyer’s list. You are likely to get a buyer from that list. Many times I have found buyers the same day I email my deals to my buyer’s list.
A good source of real estate investor websites is recommended at the bottom of this article.
Most real estate investors do not adequately market their properties. It is necessary to run a marketing campaign for every property you get even if you have a buyers list.
Of course, always make sure you include your website address where they can view the properties, and sign up to your buyer’s list.
I make sure I run ads on Craigslist and other real estate websites. For a small budget of $200 to $500, you can run ads in your local paper specifically for this property.
Avoid providing a phone number, instead, give them your website address to view the properties. If you must have a phone number, this should be a voice mail that provides enough information to view the property on your website.
I always make sure they cannot view full property details until they join my buyer’s list.
In general, this approach is likely to generate as many as a hundred potential buyers who join your buyer’s list.
3)Pre-qualify potential buyers
One of the biggest mistakes real estate investors make is to get excited when they get a potential buyer. You should treat them as potential buyers until you see they have money to close.
When I talk to a potential buyer first, I take their contact information and show them the property or give them the lockbox code. I then ask them their source of cash if they express interest to buy it.
“Cash” is not enough. Is this cash in their bank account? Have they just sold a house? Do they have a line of credit in the bank? Have they lined up a private or hard money lender?
In other words, proof of funds is a must.
If someone is hoping to get a mortgage from their bank, they are not potential buyers of real estate wholesale deals. They must have ready cash and can close quickly.
4)Follow through to closing
I then sign a contract with the potential buyer. I must meet them in person to collect earnest money. I take a minimum of $500 which they stand to lose if they do not close, but which is credited to them at closing.
Keep up with the closing process and make sure the money is available when expected. As always, time is of the essence in closing wholesale real estate deals.