Developing, building and maintaining a buyer’s list for real estate investors is essential to their long-term success in the business. The power of the buyer’s list is that it allows the investor to put homes on contract and sell them very quickly to a waiting list of potential buyers. This means that often the investor doesn’t actually need the money to buy and close the property. He is simply using his buyers’ money to finance his business.
The real buyers list is developed by finding like-minded investors who are looking for deals or looking to sell deals they have found. The buyer’s list works both ways, where the investor who owns the list can use it to sell their own properties or those of other investors. Either way, the investor with the list makes a profit on a trade.
The most common method of list building is by exchanging business cards at local investment club meetings. This is probably the least productive method of listing building, as other investors are usually not real buyers. There are a few in the bunch that deserve to be on a buyers list. Generally however, the most frequent buyers who are the target of the investor, do not come to these meetings. Frankly, there is little to no reason since they are the pros in the industry and have achieved success using certain tactics that work for them.
These large investors, who are not usually present at meetings, are referred to in the industry as “whales” because of their continued buying power. Some will be wholesalers themselves who have formed teams of referrers (“bird-dogs”) to scour neighborhoods for abandoned or distressed properties they can buy and resell. Others are contractors who rehabilitate properties on an ongoing basis and sell the finished homes to an end buyer who typically arranges conventional financing to purchase it. All other types of wholesale trades are purchased with another investor’s expensive cash or hard cash.
Here are ten ways most investors find potential buyers for their listings:
1. Drive for dollars – search neighborhoods for people working on properties who are contractors or investors.
2. Bandit Signs – are road signs called “bandit” because they are generally illegal in most cities, common size is 18″ x 24″.
3. Craig’s List – This is a very popular website that attracts hundreds of thousands of crazy people. Yes, besides good and well-meaning people using it, there are a lot of assholes so be careful.
4. Eviction hearings – this is a hot spot for weary homeowners and brave souls who keep the property despite all its adversity.
5. Newspaper ads – print advertising is always effective if your offer is attractive enough to entice other investors to call.
The real key to massive success using a buyer’s list is to keep attracting as many new people as possible. This includes trying to be creative in adding new email addresses every day. If you persist in building your list, you will only need properties for sale to be successful in real estate investing – even if those properties do not belong to you.