Show me the Real Cash Buyers
Negotiating with a cash buyer is the second half of wholesaling real estate that needs just as much care if not more than negotiating with a seller. When you’re wholesaling houses, you want to make sure that you’re getting the most money that you can out of a deal, your cash buyer realizes a positive return on investment (ROI) and that you can get your deal to the closing table quickly.
Quick Tip: Show your prospective cash buyer documentation of the recent sales other real estate investors are currently paying for properties in the area similar or exactly like yours. This will give them more of a reason to do business with you because you are showing them a deeply discounted property that’s not on the open market.
Properly screening and qualifying your buyers is one of the most important things you can do to “flip” your real estate and turn a dollar. You don’t want to be sitting on your investment or contract for a long time; you want to work with lenders and cash buyers that can settle fast and fund your deals quickly. You only want to work with real investor buyers, and there are a number of steps to make sure that you find them.
The first thing you want to make sure of is that you have a real cash buyer with proof of funds. One way to do this is to ask your investor buyer to provide a proof of funds (POF) letter or statement. These are used to demonstrate that your buyer has the financial means to close a real estate transaction in a timely fashion. This is one way to guarantee that your deal will go all the way to the closing table, and it’s a good thing to make this a standard practice within your company. As the old saying goes, “money talks B.S. walks” and for your my age take it from the movie Jerry Maguire “show me the money”. Providing a look into the bank account is not hard for a real cash buyer, and if your end investor buyer is serious in his or her intention to purchase your property, they’ll fill out and provide whatever paperwork they need in order to make the deal happen.
Most of your client’s will be rehabbers. Rehabber’s are in the business of buying property to repair and then flip them to retail buy & hold investors or home buyers, and in order to keep their construction crews working this type of real estate investor has to always purchase more property. That means that a new or seasoned rehabber should have the cash or financial backing to purchase property quickly it’s in their best business interest to do so. Selling your property to the rehabber means quick turnover on your wholesale real estate deals.
Another type of buyer is a buy & hold real estate investor that I mentioned earlier. These types of cash buyers are in the real estate game for the long run. They look at long-term buying and holding of real estate as a revenue generator and a method to build wealth, their main buying criteria is the positive cash-flow potential and equity position in a property. Location does not always play a part in their investment decision. The advantage of the buy-and-hold real estate investor is that he or she typically has deep pockets, and can purchase your wholesale deals for cash. Selling property to a buy-and-hold investor is a great way to flip property quickly, and they are all over the place in real estate markets across the world.
However you can sell your wholesale real estate deals to whomever has the CASH MONEY at the end of the day, the key is making sure that the buyer has the money. Whether you sell to a professional real estate rehabber or a buy-and-hold investor providing documentation such as a Proof of Funds Letter will insure you’re not wasting your time with B.S. So choose your real cash buyer wisely, and negotiate effectively.
I”ll See you at the closing table,
Marcel Umphery the “R.E.I. Successmaker”