How to Find Cash Buyers for Wholesaling Deals: Step-By-Step Guide
From eliminating the cumbersome process of working with a lender to a faster closing process with less risks and complications — the ability to easily find cash buyers is a superpower every wholesaler aspires to have. The good news is, with the right approach and strategy, it doesn’t take a bite from a radioactive spider or enormous work to find cash buyers.
In this step-by-step guide, we’ll share expert insights on how real estate investors and wholesalers can build a thriving cash buyers’ list. Read on to get your own share of the lucrative $10 billion real estate landscape, even with no capital or advanced skills.
Who Exactly are Cash Buyers
Put simply, cash buyers are people who are ready to purchase a real estate property with money at their disposal. That means they do not need to obtain financing from a mortgage or loan.
As a real estate wholesaler, this also means when dealing with buyers that have cash offers, you don’t need to jump through tons of bureaucratic hoops to ensure their loan, mortgage and numerous other documentation are in the right order.
Benefits of working with Cash Buyers
There are several reasons why real estate investors and wholesalers prefer cash buyers in their regular or investment property acquisitions. Here’s why:
- Easy Buying – No Loans, Just Cash Offers
A cash buyer deals directly with the property owner and the wholesaler. There are no monthly payments for mortgages, hidden loan fees, or other periodic payments associated with buying property this way. The cash buyer comes to terms with the property owner or wholesaler, prepares the paperwork, and closes the cash deal.
- Close Real Estate Deals Faster
Real estate investing is lucrative but highly volatile. Political developments, unprecedented economic crises, and a sudden change in interest rates among other factors can easily stall your real estate deals, especially with non-cash buyers. On the other hand, an all-cash deal is faster to process with fewer documents, legalities, and transactions which may stretch the closing process.
- Minimized Sales Complications
Non-cash property sales come with tons of bureaucracy. While finding buyers with cash offers is hard, the amount of work you will need to do with non-cash buyers can be overwhelming. On average it takes 4-10 business days to close a real estate cash sale. However, if the buyer is using a mortgage or loan, it can drag to a minimum of 30 days or more.
- Save Money on Logistics and Repairs
This is probably one of the biggest advantages of cash transactions. A cash buyer is primarily looking to get a hold of a property quickly. Therefore, often, they will not require the owner to undertake any renovations and would instead do it themselves.
- Flexible Time Frames
Real estate wholesalers enjoy flexible time frames with cash transactions. Today, you can get contract rights of a property from the comfort of your home and help your clients buy houses virtually. Connecting cash buyers with property owners or real estate agents is much quicker if they have cash.
Despite all these advantages, it’s important to note that not all cash buyers will follow through to the end. Unexpected unfortunate events may halt any business dealings in progress. However, there’s less risk in 4-10 business days of cash sales compared to the standard 30-45 business days for non-cash buyers.
Disadvantages of Cash Buyers
By now, cash buying may sound like the holy grail of selling properties. However, wholesalers also face a few challenges:
- Lower Asking Price
The biggest disadvantage of working with a home cash buyer is that they usually pay less than the market value of the house. If you are interested in selling a house to a home cash buyer, you should make sure that you have a firm offer in place before you start the process. Once you accept the offer, you are usually locked into a contract with a firm deadline.
Let’s face it. Despite the many benefits of working with a home cash buyer, it’s important to keep in mind that these are private individuals and businesses. As such, there are often no guarantees of their legality. And while most home cash buyers are trustworthy, you never know if one might try to scam you.
For example, you might be approached by someone who offers to pay above the market rate but wants to close the deal within a week or even a few days. While this might seem like a good deal, you may have no way of knowing if you’re dealing with a legitimate person. What happens if they don’t pay up? What if they try to steal your property?
11 Effective Ways of Finding Cash Buyers
Having a good cash buyers’ list is non-negotiable if you want to make it as a successful real estate wholesaler.
The housing market has experienced quite a roller coaster ride over the last decade. While it’s true that home values have generally gone up, those who are looking to sell a house may not necessarily stand to gain in the long run. In fact, many wholesalers these days face challenges when attempting to find somebody to buy their properties.
So, where and how exactly can you find cash buyers?
- Real Estate Auctions
Real estate property auctions and foreclosure auctions are an excellent way to find great wholesale deals on real estate. As a wholesaler, you may find homes or rental properties for significantly less than their market value.
Local auctions attract a wide variety of investors to purchase homes at competitive prices. You may find very cheap houses with a mortgage lien. However, you must be careful about the real estate foreclosure auctions you choose to attend. Not all of them are trustworthy and some of them are downright scams.
So, take the time to speak to several attendees. Introduce yourself as a player in the real estate wholesaling business and briefly explain that you have investment properties under contract.
- Network with Realtors
Develop professional relationships with realtors that will help you in finding cash buyers. No matter where you’re sourcing properties, you should always be networking with people. You never know when someone will give you a lead to a property that is ripe for wholesaling. You should also be asking your network for referrals to real estate agents. Agents have access to all kinds of properties, people, advice, and tips.
Real estate clubs are a great place to start. However, you must also keep an ear out for networking events in your local area—and come armed with business cards. These events aim to foster mutually-beneficial business relationships, and organisers will often schedule an hour or two solely for networking purposes.
Take advantage of such opportunities and visit the real estate investment clubs to speak to real estate agents, house flippers, rehabbers, real investors, and prospective buyers. Explain who you are, what you do, and communicate your intentions—you never know who may be listening or how well-connected the other person is. Speak to as many attendants as you can, increasing your chances of finding cash buyers.
Remember to keep the conversation going with more receptive people days after the event.
- Head Over to Good ol’ Craigslist
While it’s true that you shouldn’t buy or sell everything on Craigslist, it’s also a great resource for finding wholesale properties and cash buyers. In fact, it’s one of the most popular places for people to list their properties for sale at a discount.
To find cash buyers:
- Create an ad template that will house all the information about your property. When the cash buyer comes looking, your advertisement is the first thing they see. They should be able to grasp all this information at a glance.
- Clean up your posting history. It’s likely that your property won’t always appear as the first result. To fix this, post and repost your advertisement.
- Lastly, prepare all the documents, contact information, and other relevant information should the buyer need it fast.
As you can see, posting your property for a little publicity isn’t so difficult after all.
- Explore Public Records to Find Properties Recently Sold in Your Area
The local public record’s office will hold a lot of real estate properties information, and contain every sale within your area. You can find this information on their website or at the physical office, depending on your state. When you search public records, you can find information regarding transfers of ownerships, properties sold to real estate buyers, tax liens, sales, and so much more. With all this information at your disposal, you might just find the potential cash buyers you’re looking for.
- Use ListSource and Other Real Estate Information Sites
ListSource and other real estate information sites are packed with invaluable real estate data about property buyers and sellers and some of their transactions. Whether you want a property or are looking to generate leads, the site provides a comprehensive list stress-free. So, why not leverage this marketing tool to build a cash buyers list?
- Connect with Property Management Companies
Property management companies are responsible for the daily oversight of a residential or commercial building’s status quo. This often includes day-to-day maintenance, repairs, and security among other upkeep requirements of a property.
As a result, property management companies often have to juggle numerous properties, within a short space of time and consequently often have up-to-date information. As a result, they will implement various strategies to reach out to potential renters on local community boards, social media, and relevant real estate websites.
With such a targeted advertising strategy, a property management company stays in the mind of property owners and buyers who wish to pay in cash.
- Real Estate Marketplaces
Marketplaces help to connect real estate investors and motivated sellers with prospective buyers. Platforms like Realtor, Zillow and Trulia among many others allow you to post multiple properties for sale, attracting a global audience of interested cash buyers. Even better, most marketplaces today provide a myriad of filters, including a ‘cash only’ option. By leveraging this option, you draw in potential buyers that fit your bill and are ready to pay in cash.
As a wholesaler, listing your investment properties on marketplaces puts you at an advantage of quickly finding real estate cash buyers interested in your offerings.
However, even with the array of valuable global selling platforms, sticking to those that serve the local market cannot be over-emphasized. These platforms are tailored to the local’s preferences, effectively catering to their specific real estate needs. They also offer exclusive networking opportunities, significantly boosting your chances of finding ideal clients and building your cash buyers list.
- Join Real Estate Groups on Social Media
Real estate groups are a great way to connect with other real estate wholesalers in your industry, start a meaningful dialogue, and grow your network. By joining groups on social media or attending in-person meet-ups, you have the opportunity to share your expertise, learn from others, and make new connections with cash buyers.
What’s more, these groups also have the potential to turn into a source of referral clients, especially if you’re actively involved in the community.
You can start by creating or sharing insightful posts specifically tailored to your target audience. Go a step ahead and join groups and communities that serve as watering holes for your business.
For example, Facebook provides access to many groups that offer invaluable insights into the real estate industry while pushing you closer to your target clients. While you may want to join as many groups as you like, be more intentional and choose industry-specific groups like The Ultimate Wholesalers, Realtors & Investors Network and Cash Buyers Community.
Remember, some of these groups are exclusive and you will need approval from the admins before you can become a member.
- Take advantage of Bandit Signs
“We buy houses as-is and pay in cash.” “Want to sell your home fast in cash?”
These are some of the bandit signs you may come across as you drive through neighbourhoods and streets, and are an effective lead generation tool.
So, the next time you find this sign on someone’s lawn or by the roadside, don’t hurriedly drive past it. Take the number listed on the sign and reach out. You never know if they are your next big buyer.
10. Recommendations from Closing Attorneys
Whichever method you use to legally acquire a subject property, the real estate transaction will always end with a visit to a closing attorney.
Closing attorneys meet hundreds of property buyers in their line of work. So, if you have an attorney in mind, be sure to ask him for recommendations on cash buyers they know. Knowing that it is another business opportunity for them, they will gladly offer a record of recent cash sales of properties purchased at their office to include in your buyers’ list.
With such powerful information in hand, be sure to call them as soon as you can and inform them that you have a property on contract and your intention to add them to your cash buyers list.
- Lead Capture Pages
Lead capture pages are often the first experience a potential buyer has with your brand. It’s your opportunity to make an impression and convince real estate cash buyers that your property is the right fit for their needs. As such, a lead capture page should be designed with a single purpose in mind — to convert the reader into a lead.
An effective lead generation page can help you lock in on potential cash buyers by providing a way for people to contact you. Lead generation tools help you collect information from people who are interested in your property. For example, if you’re running a lead generation website in the real estate niche, your lead generation tool might ask real estate cash buyers for their email addresses so you can send them a message about your product.
Remember, leads can be made up of different types of people; from people who are merely interested in properties around their area, to real estate investors, and buyers. Your lead generation mechanics should be able to find cash buyers in the crowd.
How to Choose the Right Cash Buyer for Wholesaling Real Estate
Choosing the right cash buyer is critical to the success of any real estate wholesaling deal. So, how do you spot the right buyer?
- They Make a Reasonable Offer
The ideal buyer will make a reasonable offer from the go. They usually state an amount closer to the asking price.
- They are Curious
High-quality cash buyers are keen on asking lots of questions, including about the area. They also want to know the property address, any sale inclusions, previous renovations, and why the house is on sale.
- They Have a Real Estate Agent
There is no harm in choosing a potential buyer who shows up to the viewing by themselves. However, when you meet cash buyers, be on the lookout for one who a real estate agent accompanies. Enlisting professional help during the property hunting process is a sign of seriousness and commitment.
- They Provide Proof of Funds
Legitimate cash buyers often back up their commitment with proof of funds or pre-approval letters from hard money lenders.
How Do You Market to Cash Buyers?
Some of the most effective ways to advertise to cash buyers include:
- Having a Website
Websites place you in front of potential property buyers and this builds your brand’s credibility and establishes you as a potentially trustworthy partner.
- Email Marketing
Sending weekly or monthly listings is an excellent strategy to attract and retain cash buyers. Insert photos and videos that show the property’s interior and exterior to give prospects a more engaging experience, improving conversions.
- Text Marketing with Smarter Contact
On average, SMS marketing achieves a 98% open rate and a colossal 45% click-through rate. So, texting your potential buyers is a no-brainer.
Smarter Contact is one of the best solutions out there for real estate wholesalers to reach prospects and close deals with minimum effort. At Smarter Contact, we make life easier for real estate wholesalers by providing a user-intuitive SMS marketing platform specifically tailored for the real estate business. You get a wide range of innovative features without breaking the bank or a steep learning curve.
What if you could turn every prospect in your region into a potential client? With Smarter Contact you can reach out to a large audience with just a few clicks.
What are the Steps for Closing a Real Estate Deal With a Cash Buyer?
Here is a step-by-step guide on how to close a deal with instant buyers:
- Sign the Purchase and Sale Agreement
- Confirm the availability of funds: Avoid asking for all the cash; instead, ask for a deposit of approximately 1% or 2% of the property’s purchase price. Also, the buyer needs to provide bank statements that prove the funds are readily available.
- Hire escrow and title companies: the local title company will process all paperwork and facilitate the transfer of funds, while the former will ensure you’re free of any outstanding liens.
- Home inspection: conduct a thorough home inspection, pinpointing any required repairs. The buyer will then negotiate a better deal to take up the repairs.
- Close the deal with the help of a closing attorney.
Potential cash buyers are everywhere, and they’re looking for new properties to invest in. Finding deep-pocketed clients who pay cash are assets to your wholesaling business is not easy. However, if you consistently implement these action plans, building a thriving cash buyers list will become a tad easier.
Last but not least, remember to harness the power of Smarter Contact SMS marketing tool to close more real estate deals faster.
Sign up for your free trial today.
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