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?
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.
How to Analyze a Real Estate Deal
Deal analysis is one of the best ways to learn real estate investing and it comes down to fundamental comfort in estimating expenses, rents, and cash flow. This guide will give you the knowledge you need to begin analyzing properties with confidence.
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