QUOTE OF THE WEEK
“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
Last week, we covered how to find Motivated Sellers, but we’ve been getting just as many questions about how to find “Buyers”. So this week, we’re dedicating this newsletter to that subject.
When I first started in real estate, the scariest thing to me was finding a deal and then not being able to sell it. I was terrified that the Seller would find out that I wasn’t the end Buyer or that I would get to the end of my 30-45 day window in the contract (that allows the Buyer time to put financing in place) and I wouldn’t have a Buyer. And, in all honesty, it did happen a couple of times! As a matter of fact, I don’t know too many wholesalers that it hasn’t happen to. But the thing is, you don’t want it to keep happening because you get a reputation and you won’t be able to get any deals! So, I’m going to tell you exactly how I built my Buyers list and, hopefully, you can avoid some of the mistakes I made. We also have a pretty cool case study that I think you’ll enjoy. It’s a testament to finding ways to get things done no matter what and to not giving up. So, without further adieu, welcome to the 4th installment of…
ROCK THE REAL ESTATE!
Lena W. Claybon
HOW TO FIND BUYERS
When I got my first house under contract, there were a lot of things I didn’t know about finding buyers (like most people starting out), so I had to build what eventually became my Buyer’s List one name at a time.
The quickest way I found was, whenever I had a deal, to put it on Craigslist. If it’s a good deal, you’ll definitely get calls. After they asked their questions, then I would ask THEM questions, “What kind of properties were they looking for?” “What areas were they looking to buy in?”, etc. You qualify them, while they’re trying to qualify the deal. That way even if they don’t buy that deal, you now have their info for future deals you find. I got quite a few buyers that way.
Also, once you sell the property, don’t take the ads down because you will still get calls. Then you call tell them that the house they’re calling about was sold but you can call them for the next deal(s). There are other sites like myhousedeals.com and other classified sites you can post on as well but Craigslist is still the mother of them all!
Also, when I first started, I didn’t know what a REIA (Real Estate Investors Association) was. Turns out, most cities have one or some variation of it, and they get together once or twice a month to share information and network. It’s a great place to meet potential Buyers. The downside of Craigslist is that you get a lot of tire kickers who are not always real investors but at REIA meetings, you meet real deal, active investors who are almost always looking for the next good deal!
Later, after I had been wholesaling for a while, I found out that another great way to find Buyers is to find out what LLC’s owned properties in the area where the property you’re selling is located. An LLC usually implies its owned by an investor and if they already own properties in the area, chances are they may be open to buying more.
Nowadays, there are more hi-tech ways to find these kind of investors with software like Propstream or Deal Machine or list providers that sell “cash buyers” lists if you want to spend the money. But, if you’re starting out and don’t have a lot of cash, you might want to do it the old-fashion way and that is by looking them up through the tax assessor’s office for that county.
Accessing records is different in every State but where I live, it’s online and if you put in a street name without a house number, then all the records for that street will come up. You can then see which ones are owned by LLC’s. I usually do all surrounding streets to the property I have under contract. Then, I look up those LLC’s.
Another way is partnering with other Wholesalers who have Buyers lists and offering them a percentage of your deal if they market your property to their list.
Some people call numbers on “For Rent” signs as a way to find Buyers or call landlords of apartment buildings. All these things can lead to finding Buyers for your properties. It’s not that difficult but it does take time and work. The good thing is you don’t need a ton of names. All you need is a few really solid Buyers who are always open to a good deal. It’s quality over quantity.
Jibri Douglas and company, Noire Real Estate, LLC, wholesaled their first deal by happenstance, but they are still very proud of their results!
A couple of years ago, Jibri discovered real estate through a cousin after graduating from grad school and not being able to find work for 18 months. Soon after, Jibri started taking courses and joined a local REIA group. After a few months, Jibri, via her new company, felt ready to take the plunge and find an investment property!
Jibri’s company was looking for a property in which they could apply the BRRRR (Buy, Rehab, Rent, Refinance and Repeat) strategy of investing they had learned about. So, Jibri worked with a Realtor to find their first deal, which was a single-family home that the Company hoped to convert to a duplex.
Jibri said when they made the offer on the property, the offer was so low, the Seller told them they would have to “short sell” the property in order for the offer to be accepted, and their bank would have to approve it. Later, the Seller got back with Jibri to say the bank accepted the offer and they signed an agreement of sale contract.
When the Title company ran the Title on the property, discrepancies came up that had to be resolved before Jibri’s company was able to close on the property. Once everything was worked through and the property was cleared for Jibri to go ahead with the purchase, the Seller then decided they could get more for the property and instructed their agent to relist the property at a higher price.
Jibri and Company were obviously upset but became determined that they were not going to put all the time and energy into this deal to have it go to waste. So, Jibri hired an attorney to fight it. Jibri’s attorney was able to get a “lis pendens” on the property. Lis Pendens’ means “pending suit” which lets anyone trying to buy a property know that there is a lawsuit pending against the property. This clouds the property’s title, and it usually frightens away potential buyers and puts the Seller on notice that they will have to go through the lawsuit holder to sell the property.
After this happened, the Seller backed down and Jibri was able to go through with buying the property. Also, by this time, Jibri decided to no longer use the BRRRR method on the property and decided to wholesale the deal instead. Jibri worked with two Wholesalers who already had buyers lists and they marketed the property to their lists.
Jibri was able to find a Buyer relatively quickly using this method, however, because the property came through a Realtor, the contract was not `assignable’, so Jibri did a double close and closed on the property in May 2020 earning a $10,000 profit.
After that, Jibri and company decided to take the money earned from the deal, and put it directly to work by using it as a down payment on their first “buy and hold” property, which they just recently got under contract!
If you would like to find your local REIA you can do so by clicking the link below!