Most real estate wholesalers will receive the following reply from a cash buyer at least once in their career ” if the numbers make sense, I am interested”. In fact , Moore times than not cash buyers will offer this reply to a real estate wholesaler to get them off the phone quickly or simply to receive first dibs whammy properties the real estate wholesaler comes across. The reality is that any cash buyer does have very specific investment criteria that they use to determine if a deal does make sense to stem or not. Real estate wholesalers should gather the following information from their cash buyers:
- Where they want to invest? -zip codes, cities, school districts, portions of the city, or even subdivisions
- What they want to buy? – property type, beds, baths, parking, type of structure, house style, etc.
- How much are they willing to spend? – aka price range they like to buy in typically
- How many deals a month are they interested in buying? – if they buy 3 or more houses a month they are pretty heavy hitters and serious cash buyers
- Which repairs are they not willing to do?
- How much net profit do they need to see per deal? – it could be a dollar amount, a percent return, cents on the dollar, or even percent of ARV
- What their exit strategy is? – do they fix and sell, rent, or lease option or seller finance their properties
These are the core questions to get any cash buyer to answer, so you can find, negotiate and pass on deals that make sense for the cash buyer. Otherwise, you will be wasting a lot of time and effort looking at properties that do not meet the cash buyers criteria. If this occurs, they will not buy and you will not make any money. Get the information you need and look for those deals. It is just another successful business model to apply to real estate investing.