Over the next few months and into the next year or so, you will see more people jumping into the real estate market. The new breed of cash buyers are retirement account buyers who have decided to direct their funds toward real estate investments. The problem is that this new group of investors are not seasoned real estate investors who have bought and sold in that market for any period of time. Most of these retirement account cash buyers will know that they want a particular rate of return or a certain cashflow per month, but they might not have any more investment criteria defined beyond that point.
If you are going to wholesale properties to these newer real estate investors, you will have difficult time identifying what they want to buy, therefore you wont be able to bring them properties that they can successfully add to their portfolio. After all, if they make a mistake and lose money, you now have one less real estate investor to buy your properties. In many cases, real estate wholesalers will have to take time and help this new breed of cash buyer to define their investment criteria. It will take some time and some patience, but in the future these new cash buyers will be a real estate wholesalers main source of cash buyers in most real estate markets.
I travel nationwide, therefore I see a lot of different real estate markets in any given month. For instance, in the month of July, I have already been in the Denver, Minneapolis/ST. Paul, Salt Lake City, San Francisco, Inland Empire, Philadelphia, Newark, Central New Jersey real estate markets. I have seen appreciation in a lot of markets and with that you will see a different breed of cash buyer rise to the top of the real estate food chain as the key buyer. We are entering that portion of the real estate cycle in most metro real estate markets. You will find more retirement account cash buyers popping up in the market. So, if you call a cash buyer and they tell you ” If the numbers make sense, I will buy it”, you might be getting the ultimate blow off from a savvy cash buyer or you might be speaking with a retirement account cash buyer entering the market. If so, get the retirement account cash buyers desired return and start finding them properties and see what sticks. In most cases, you will be able to arrive at some solid investment criteria in due time. Just don’t discredit this new breed of cash buyer, because you will be missing out on many more opportunities to make money wholesaling real estate as the real estate market shifts. Plus, if they start making a good return in real estate investing, they know other people with retirement accounts that they might be able to refer to you. In some cases, these people become great sources for private money loans that you can use to acquire homes for your own portfolio. The possibilities are endless.