I have cash buyers but not properties
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Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
14yI've been at this since 1999 so I've only been through the end of one RE cycle, the beginning and end of that time that shall never come again, and now this phase. There are WAY more buyers with cash in the lower price ranges than ever before in my farm. In the middle of the boom, the rehabbers were borrowing hard money and the landlords were borrowing conventional. Today everyone and their mother wants to place $50-100K cash. The 50-60 something Boomers are out in full force with their savings and IRAs. They'll buy anything. Just like in 2005, but this time with cash. I've sold some things in the past few months where I'm not sure the buyers know what they are doing. Or rather, I don't understand their plan at the price they are paying.
As for finding deals, I suggest finding out first what the buyers want. Don't assume anything though. Ask what they think is a deal and just listen. Buyers really have different ideas and needs. Some will be happy to buy something for $75K that rents for $600 as long as it's in the right neighborhood and needs no rehab. I don't want that deal, but some do. Some only want units. They want units because they heard/think units is where it's at, even if the numbers aren't that great to me. Some just want to get in with anything that they have enough cash for. I'm not into setting up anyone for failure, but I will sell it for what the market can bear. Ryan Webber in a previous thread called this kind of selling, where the wholesaler sells retail to the the highest paying investor, as opposed to his regular rehab buyers, the "dark side". I've thought a lot about that. I'm good for now selling to the highest offer. When the open market/MLS no longer provides better pricing, I'll go back to my buyer's list. For right now, they don't want to pay what I can get. And I don't blame them.
Then you're probably gonna have to get pretty creative if your market is as competitive as people here make it sound. Think about ways to get to sellers that don't have listed properties. There's plenty to read on this site and other creative real estate sites about finding motivated sellers that aren't on the MLS. Read about problems (tax defaults, tenants, code violations, evictions, liens, deceased owners) and think about what you can bring to the table. Don't go after probates if you're not good with legal issues and if you are impatient. Don't go after tenant issues if you have no stomach for problem tenants/squatters. Think about how you can solve an owner's problem. I love working directly with sellers but it's not for everyone.
8 Replies
- Investor · Allentown, PA · Member since 2012 · 73 posts · 18 votes14y
cash buyers is the easy part, finding motivated sellers is the very hard part. Your second question I think you refer to teaming up with wholesalers. You can do a bird dog agreement just do a google search to find one but you also have to be careful you are not breaking any brokering laws in your state.
- Real Estate Investor · Toronto, Ontario · Member since 2010 · 413 posts · 114 votes14y
I'd contact a few active investors in your area, either from Biggerpockets or local real estate meetings and see if they deal with any properties that your cash buyers will like and make an agreement with them. 2-3% of the sale of the property or whatever you feel is fare.
I'd have no problem paying someone who brings a fast sale to my property. That's why I don't mind paying realtors
- Flipper/Rehabber · Louisville, KY · Member since 2008 · 1k+ posts · 1k+ votes14y
Martin is right, anyone can find buyers.
Finding deals is harder.
To be honest though, others have claimed your part of florida is the easiest place to find deals so if you can't finds them there, you might consider another line of work. Sorry, just sayin. - Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes14y
"If I have cash buyers and no properties at the moment , how can I work out deals with investors that have deals for sale.referral fee?"
The DEAL your investors might be seeking might be unrealistic for the area they want to invest in.
I know for my area what something will sell for with regular financing,a mix of financing bank and seller,and all cash.
There is a difference between a great deal and an unrealistic deal.
An investor is just like a regular purchaser in that FIRST they need to know if they can hit the percentages they want for the area.There are some investors who haven't bought anything with cash the last 2 years and have dreams of pie in the sky returns.
So you need to find out if they are realistic before wasting time.
Example you can have investors is Roswell,Ga buying quads with cash for 250,000 to 300,000.Some investors call wanting it at 200k.I saw one foreclosure 2 years ago that sold for that vacant and it sold for cash in 48 hours and had tons of offers on it.Haven't seen one like that in that location for years.
So investors need to change the area or start putting the capital to work at a realistic expectation for the area.
- Real Estate Investor · Bellingham, WA · Member since 2008 · 407 posts · 90 votes14y
You have to find out what your buyers are looking for. As Joel said what are there reasonable expectations and where do they want to invest.
- Rehabber · Member since 2011 · 66 posts · 9 votes14y
Originally posted by Eric Michaels:
Martin is right, anyone can find buyers.
Finding deals is harder.
To be honest though, others have claimed your part of florida is the easiest place to find deals so if you can't finds them there, you might consider another line of work. Sorry, just sayin.South Florida is probably one of the hardest places to find deals in the country actually. Prices are going up and competition is fierce. They are probably down to 2005 inventory levels these days. I am not even bothering investing down there for this reason.
- Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes14y
I've been at this since 1999 so I've only been through the end of one RE cycle, the beginning and end of that time that shall never come again, and now this phase. There are WAY more buyers with cash in the lower price ranges than ever before in my farm. In the middle of the boom, the rehabbers were borrowing hard money and the landlords were borrowing conventional. Today everyone and their mother wants to place $50-100K cash. The 50-60 something Boomers are out in full force with their savings and IRAs. They'll buy anything. Just like in 2005, but this time with cash. I've sold some things in the past few months where I'm not sure the buyers know what they are doing. Or rather, I don't understand their plan at the price they are paying.
As for finding deals, I suggest finding out first what the buyers want. Don't assume anything though. Ask what they think is a deal and just listen. Buyers really have different ideas and needs. Some will be happy to buy something for $75K that rents for $600 as long as it's in the right neighborhood and needs no rehab. I don't want that deal, but some do. Some only want units. They want units because they heard/think units is where it's at, even if the numbers aren't that great to me. Some just want to get in with anything that they have enough cash for. I'm not into setting up anyone for failure, but I will sell it for what the market can bear. Ryan Webber in a previous thread called this kind of selling, where the wholesaler sells retail to the the highest paying investor, as opposed to his regular rehab buyers, the "dark side". I've thought a lot about that. I'm good for now selling to the highest offer. When the open market/MLS no longer provides better pricing, I'll go back to my buyer's list. For right now, they don't want to pay what I can get. And I don't blame them.
Then you're probably gonna have to get pretty creative if your market is as competitive as people here make it sound. Think about ways to get to sellers that don't have listed properties. There's plenty to read on this site and other creative real estate sites about finding motivated sellers that aren't on the MLS. Read about problems (tax defaults, tenants, code violations, evictions, liens, deceased owners) and think about what you can bring to the table. Don't go after probates if you're not good with legal issues and if you are impatient. Don't go after tenant issues if you have no stomach for problem tenants/squatters. Think about how you can solve an owner's problem. I love working directly with sellers but it's not for everyone.
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