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

by | BiggerPockets.com

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

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.

free-mentor

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.

landlord-lessons

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!

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on BiggerPockets.com. Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.

5 Comments

  1. Lisa Naumu

    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.

  2. Anthony Brent

    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!

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