The Dirty Little Secret About a Buyer’s Lists

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Oh, the buyer’s list. If you ask around to any real estate investor, they’ll practically fall over themselves telling you about how important it is and how it will generate you a ton of sales. For those of you who aren’t fluent in real estate, a buyer’s list is a sheet of paper with the names of buyers who’ve purchased a property in the past in business entity or were an absentee owner. It is the wholesalers job to contact the people on the list and try to get them to purchase the property they have under contract.

So needless to say, this is a pretty important document. It’s the key to success. It’s the most important tool in wholesaling. Right?

Wrong.

With a buyers list, you’re really only speculating, at best. Having a list of leads – no matter how long – does not guarantee a sale. Worse, it doesn’t guarantee that you’ll make any money, or have a successful business. A buyers list is literally just a bunch of names on paper.

The dirty little secret in wholesaling is that you don’t need a buyer’s list to make a sale.

What You Really Need

The first thing you need to do is throw the buyers list out the window. The second thing you need to do, is learn how to generate leads on your own and evaluate them yourself. Making a personal connection with a possible buyer or creating a relationship with a real estate agent will grow your business infinitely better than having a list with a bunch of names on it.

Asking around and using word of mouth to advertise your property is essential. One way of doing this is through a real estate agent – whether you need to unload a property, or you’re inquiring after one in a certain neighborhood that you need more information about, a real estate agent is much more likely to point you to a potential buyer. Either because the agent wants the commission from the sale or because he genuinely wants to help your business, you have a good chance of getting what you need from a real estate agent. Real estate agents can also help you learn about certain neighborhoods, so that you can evaluate for yourself whether what you’re buying or selling will be a good deal.

Another tactic is to go through a gatekeeper. A gatekeeper is someone who knows a great deal of people in a concentrated area and is likely to be able to refer you to someone who needs to buy a property. Like a real estate agent, people are more likely to trust a referral from someone who lives or works in an area. When you have a good property with a solid deal, put the word out to your gatekeeper (or real estate agent) and let them know you’re looking for buyers. This way, they will flock to you.

Finally, search through the public record, either online or in person. This is a good way to canvas a certain neighborhood and get an idea of what the housing market is like in that particular place. Getting yourself familiar with an area gives you a leg up on creating a solid deal for a potential buyer.

So How Important is the Buyer’s List? 

To sum it all up? The buyers list simply isn’t that important. Real relationships and real connections will trump generic leads any day. People are much more likely to trust a referral that comes from a known realtor than a cold call from a wholesaler who they’ve never met. What truly matters is having a solid deal.

If you were, for example, to place a junk deal (like an overpriced house) in a poor neighborhood, it doesn’t matter who is on your buyer’s list – your house simply won’t sell. But by evaluating the area, learning your area, creating a solid deal, and utilizing a network of possible buyers, you’ll be amazed how the buyers will start knocking on your door – no list necessary.
Photo Credit: ♔ Georgie R

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About Author

Mike is originally from Philadelphia, PA. He has successfully built his empire from the ground up, investing in Real Estate and teaching others how to make a living doing the same through his website at www.WholesalingHouses101.com . Mike currently lives and flips houses in Richmond, VA with his son.

16 Comments

  1. Mike I respect where you are coming from. I have built my entire virtual business in 3 states through relationships. But I also love direct marketing. For me it’s not either or—it’s both and.

    Good article sharing a necessary pillar of our investing plan. Thank you

  2. Mike – I agree with you on the difficulty of wholesaling a property in a bad neighborhood, but I’m not sure I agree with you on working with a Realtor.

    Maybe it was my bad luck, but when I first started wholesaling I used a Realtor who did nothing more than give me listed properties that were overpriced. His commission was his only interest in my business. If you’re going to work with a Realtor, at least find one who has experience working with investment grade real estate. The only problem of course, is the fact that they might snatch up the really good deals and leave you with the crumbs.

    • Martin, I know exactly what you mean. It’s a challenge finding people you can trust, esp in this business. Why not look for someone recommended by people you know? Ask for referrals. That might help.

  3. Thank you! I am a new investor and I have read so much about the “list” that I initially felt some sense of urgency to get a list togetner. After going out and looking at deals and talking to agents, investors, and sellers I see that people are far more important than a list of thkse people’s names. Instead of growing a list I am growing a stack of business cards; each card represents a face that I know, a person that I have met, I relationship that I have started to build.

  4. “The first thing you need to do is throw the buyers list out the window. The second thing you need to do, is learn how to generate leads on your own and evaluate them yourself. Making a personal connection with a possible buyer or creating a relationship with a real estate agent will grow your business infinitely better than having a list with a bunch of names on it.”

    So your argument to not needing a buyers’ list, is that you need a list of buyers?

    When people talk about a buyers’ list, they don’t mean a sheet of paper with random phone numbers on them. They mean people they know who is willing and able to make a transaction. Exactly what you just described in the article.

  5. Wow! I almost couldn’t possibly disagree more! Was this article written in 1970? It’s 2014, nobody has a piece of paper with names on it anymore. They have these new fangled contraptions called computers where they store their digital databases.

    The people making the most money here in Houston are without a doubt the wholesalers with the biggest lists. They also do move those junk deals in bad neighborhoods. There are some landlords that specialize in those types of houses.

    In fact, the people with the biggest lists also make money by blasting out deals for those other poor wholesalers who don’t have a large list. I know one wholesaler who charges minimum of $500 per blast. Just out of curiousity I counted how many blasts he did in the past month, there were 12. So, he made $6000 in one month just blasting other wholesaler’s deals – and that’s without having to find a deal.

    If you were here in Houston, I’d ask you to throw your list out of your window and into mine – and I will continue to build my buyer’s list!

  6. Yes I would have to disagree as well, then again I’m an active wholesaler in Houston flipping 2-5 deals a month, I would definitely recommend having a buyers list. Now the list doesn’t have to be 3,000 ppl, but a nice list to call when you have a property is mandatory in my eyes.

  7. I would also consider the things you talked about as means to build a list.
    People are missing your actual point that making real contacts that know you and told you they want to buy, rather than pull 2000 random names of recent cash buyers off the public records.

    I have always had the impression successful wholesalers usually had a core list of buyers that take almost all their deals. Going the route of mass email blasts of random lists of names is the last resort when the regulars aren’t interested.

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