Real Estate Wholesaling

What Comes First in Wholesaling: The Cash Buyer or the Deal?

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It’s a classic question: which came first, the chicken or the egg?

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In the wholesaling world, it's "which comes first, the cash buyer or the deal?" After all, the deal is what will attract the cash buyer, but without the cash buyer, you can't do anything with the deal. This question stops many new investors from ever taking action.

The problem is compounded because of all the wholesaling gurus out there. You sign up for a free seminar on wholesaling, get upsold to a weekend boot camp, and the only thing you get out of it is “how to build your cash buyers list.”

Here’s a little secret: finding cash buyers is the easiest part of the entire wholesaling process.

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Related: 3 Ways to Find Comps When Determining ARV for Your Wholesaling Deal

Don’t Be Fooled by the Chase for Cash Buyers

Seriously, you are about to be amazed at just how easy (and cheap) it is to find more cash buyers than you’ll ever be able to sell to. I believe this is why the gurus use the phrase “cash buyers” so frequently; they know that if they can convince you that finding cash buyers is the solution to all your problems, you’ll pay big money to find out that “secret,” and you’ll be convinced that you are a legit wholesaler—and that they are a god (they’re not!).

Every day, newbie wholesalers straight from the latest and greatest guru boot camp jump onto the BiggerPockets Real Estate Marketplace and place an ad saying, “I’m looking to build my cash buyers list!” However, after that initial post, we never hear from them again. They were duped into thinking that if they only had the cash buyers, everything else would fall into place. It’s very sad.

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Finding the Deal is the Hard Part

The truth is, cash buyers are everywhere, but cash buyers do not mean anything if you don’t know how to get a good deal. So, we’re back to the original question: which comes first, the cash buyer or the deal?

Related: A 60-Day Action Guide to Wholesaling Your First Property

It doesn’t matter. You can find the deal first and easily find a cash buyer for it later or you can easily find the cash buyer first and then go find the deal. Either way, finding the deal is the hard part, and you need to understand that. Once you realize that locating cash buyers as a first step or last step doesn’t change your outcome, the issue becomes much less important.

So, do both. Find cash buyers while you are marketing for good deals. The one major benefit to finding cash buyers first is being able to gain some free education from them on what makes a good deal. Therefore, if you really need an answer to the question “which comes first?” go find one cash buyer who is willing to train you on what they want from a deal.

Then go out and find a perfect deal for them. You can build your business from there.

[This article is an excerpt from Brandon Turner’s The Book on Investing in Real Estate with No (and Low) Money Down.]

What do you look to find first—the cash buyer or the deal? Why?

Let me know your thoughts with a comment!

Brandon Turner is an active real estate investor, entrepreneur, writer, and co-host of the BiggerPockets Podcast. He is a nationally recognized leader in the real estate education space and has tau...
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    Lisa Naumu from Indio, California
    Replied over 3 years ago
    Your right I’m overwhelmed as to where to begin with investing. I have no money, no job really and so want to do something with real estate. Just need a nudge and encouragement. I know I can do it just need a kick.
    Cabri Griffin from Los Angeles, California
    Replied over 3 years ago
    Lisa, check out this podcast episode. It has plenty of actionable things you can do to find a deal with no money. Get started TODAY! https://www.biggerpockets.com/renewsblog/2015/10/01/bp-podcast-142-22-and-a-half-actionable-tips-beginner-real-estate-investors-with-josh-brandon/
    Justin Blackley from cincinnati, Ohio
    Replied over 3 years ago
    I completely understand how you feel. You watch all the videos, read the books and you still have questions on how to start. I myself have reconsidered many different options over and over on how to start my real estate venture, rather it would be wholesale or lease options assignments. For me I started with wholesale, got my contracts with the contingencies I need to be able to have the contract null and void if I do not find a cash buyer. Wholesale I think is your best option especially if you have limited income. You can do direct mail which is fairly cheap, or you can drive for dollars to help get you started. But take action, you cant get anything by doing nothing.
    Noel Fernandez from Orlando, Florida
    Replied over 3 years ago
    Honestly I think it’s good to get a few buyers on your list and look for deals at the same time, I made a mistake losing a good deal with no buyer’s list. But you learn from your mistakes.
    Anthony Brent from Baltimore, Maryland
    Replied over 3 years ago
    Hey guys I have found that constructing a good buyers list takes quite a bit of research. Hopefully the property that you wholesale and want to sell to a buyer meet there criteria. So to me finding viable buyers can be tricky so I research the area of my wholesale property and who has purchased in that area. It’s kind of a matching game, but it’s working for me. I find buyers and properties at the same time but do research my buyers before committing to the wholesale property. Thanks guys I will check out the links you suggested!
    Herbert Bradford Homeowner from Houston, Texas
    Replied over 2 years ago
    This really helps me. I can just take action of getting the deal and then the buyer will come.
    Tinay Henry
    Replied over 1 year ago
    OK my fellow I am a newbie looking to get into the whole selling part of the Business just to get started, however I need to understand the ARV thing and the paper work . Where do I need to start? Is there any advice?
    Giovanni Cardenas New to Real Estate
    Replied 8 months ago
    What are some ways you can find cash buyer?