For Rent signs and Ads….what why would I ever want to call on those? Well you will want to after I tell you who is behind those For Rent ads and For Rent signs. The people that offer properties for rent are landlords or property managers. These people are either cash buyers or people who know cash buyers.
Let’s take a step back for a second and help you understand why landlords are one of the best Cash Buyers you can have on your list. Landlords that have been in the business throughout the last rise and fall of the real estate market are the ones with money and the ones who want to build their portfolios now. They bought property before or during the last rise of real estate and sold at the peak for a large profit, then they held onto the money until the market dropped. Thus, the reason why they are looking to buy now and are one of the best sources of cash buyers.
Why do landlords make such great cash buyers? They make great cash buyers because they focus on cashflow and not so much on purchase price. If they can meet their cash flow needs, they will be willing to pay a bit more than your usual rehabber who is planning on fixing and selling a property quickly. The reason for this is that rehabbers have to be competitive in this market, thus they need to buy cheap enough that they can fix and sell the property just below fair market value to a retail buyer.
With that being said, who will offer you more profit as a wholesaler?….Landlords. Who will buy your mediocre deals if the cash flow is there?………..landlords.
So now you know why you will want to call on for rent signs and for rent ads. When you call on for rent signs, you will approach them as if they might be interested in selling their property. If they say yes, you get the property details and ask why they are selling. If they are selling to get into another deal, you should find out what they are looking for and where. If they are not interested in selling, but they simply want to rent their property, you can ask them if they are looking to add to their portfolio. If they say yes, you will find out what they want to buy and where. Essentially, you are going to go through the same line of questions you would with any other real estate investor to identify their investment criteria.
If you find that the part on the other side of the for rent sign or for rent ad is a property management company, you can still work with them and possibly create a great referral contact. You will ask them if they are interested in selling the property again. In most cases, they will say I don’t know or I am the property manager. If that is the case, you will ask if they have any landlords that might be looking for more properties. In some cases, they are going to be real estate agents and may not be interested in your offer, because that is what they want to do. In some cases, if they are real estate agents or not you might find that they see the potential and look to discuss this avenue further with you. You want to gather their investors criteria and discuss how a deal will be handled if one is found. Keep in mind, it is in the property managers best interest to help their landlords gain more properties, because that will equal more money for them through management of those properties.
Hopefully, you can see that this approach can really be a win, win, win for all parties involved. On top of it all, you build your cash buyers list and have a list of cash buyers that are willing to leave more in the deal, which equals more profit for you.