The Real Deal: How to Find Legitimate Real Estate Cash Buyers
Real estate has outperformed the stock market 2-to-1 since the year 2000. This makes real estate a prime investment opportunity for many.
A cash buyer purchases property without the help of a loan. Since these transactions require tens or hundreds of thousands of dollars, finding buyers who can put up cash from a bank account can be tough.
Follow these simple steps to finding eager real estate cash buyers ready to invest today.
When Are Cash Buyers Needed?
Banks have limits on lending amounts when it comes to real estate. Homes below a specified purchase price cannot be financed because the costs outweigh the benefits for lenders.
In these cases, a cash buyer is needed. Someone who can provide personal or business funds to cover the cost of the purchase. The money used can be from a variety of sources like a 401(k) or savings account.
The main purpose is just that the buyer can bypass bank financing.
Real Estate Investors Association
Local real estate clubs and investors associations are a great place to start networking when looking for cash buyers. If you’re new to real estate, there’s the dual benefit of educating yourself about investing while you meet people.
Clubs and investors associations offer classes on real estate transactions and finding strategies that work for you. They equip you with the tools you need so that you can intelligently approach a cash buyer and understand how the process works.
This is essential if you are dealing with seasoned buyers. They are more likely to trust someone who knows the business than a person looking to make a quick dollar. Knowing the business means you’ve done your homework and want to build a long term relationship.
Don’t fret if no one seems interested in connecting right away. Continued participation gives you the chance to see what investors in your group seem interested in so you can better target buyers in the future.
Start a list of potential buyers by asking for business cards or website information. Add a note next to their names indicating the type of properties they currently own and price points.
You can learn the price point by the neighborhoods. A quick search on Zillow yields recent purchase prices on homes in that neighborhood.
Referrals from Friends
Friends are a good option for finding cash buyers because they know your character shortening the time it takes to build trust. Ask friends for referrals on cash buyers to expand your network.
Friends of friends may be active investors or looking to invest passively using money from a retirement account or savings. Ask lots of questions about expectations before beginning. You don’t want to damage personal relationships by overselling a deal.
The ultimate responsibility of due diligence lies on the cash buyer, but if you know your friend or his referral isn’t experienced you look like a hero by walking them through the best and worst possible scenarios ahead of time.
Place signs around neighborhoods where your home is located. Indicate the property type you have to offer. For example, “3/2 single family home $40K.”
Low purchase prices attract real estate cash buyers. Remember to include a business phone number where you can be reached. Personal numbers should be avoided in ads.
Advertisements are a great option because they can be placed no matter your budget. Free classifieds attract potential buyers along with paid high-quality banner ads on real estate websites. With online ads, the more you spend the more people you reach.
Online ads may attract more buyer leads than signage but beware of spam. Consider a craigslist ad where you can mask your email address and qualify potential buyers before responding to inquiries.
Homes are auctioned monthly on the courthouse steps in most states. These auctions are held on a specific day of the month and buyers come with cash in hand to get good deals on foreclosed properties.
This is a great place to find cash buyers actively looking to invest. Listen to the amounts of the properties they bid on and which they win or lose. You will quickly learn the amounts each investor is willing to spend.
When you hear a property description that matches your own, approach the investors who lost the bid with your information.
Pass out your sales flyer to the investors present and ask if you can stay in touch. Investors may decline, but opt to keep coming monthly to auctions until others begin to warm up to you.
Auctions are held in public places where anyone running a scam could approach investors carrying tens of thousands of dollars in cash or checks. Not everyone will feel comfortable sharing contact information under these circumstances.
Landlords who advertise properties can be cash buyer leads. Look for landlords with rental homes in neighborhoods that attract section 8 tenants to bulk up your cash buyer list.
Section 8 tenants have housing restrictions that generally limit them to low-income areas where property values are low. Landlords who buy houses at ultra-low price points have to use cash.
If you don’t enjoy talking to people, making a list of landlord contact information from rental ads is ideal. You can often get an email address to make contact instead of having to make phone calls.
Real Estate Cash Buyers vs. Conventional Buyers
When looking to sell your home quickly, we buy houses in pueblo and Colorado Springs You can earn a profit with fewer headaches and move on to your ultimate financial goals.
Be ready to do the leg work necessary to attract or hunt for real estate cash buyers. They are plentiful if you search the right places.
If you don’t have the time or interest in finding a cash buyer yourself, contact us to learn more about how you can get a cash offer on your property.