I really applaud the efforts of newbies getting started, but I can always tell when someone has just come out of some big-name guru’s seminar. About once a week I get an email that reads something like this:
“I am a real estate investor who works with cash buyers to find properties for them to buy, fix up and re-sell quickly or buy, fix up and rent out. I am looking for cash buyers interested to purchase single family houses above $300K onwards to be included in my preferred cash buyers list. I am also looking for an investor friendly agent who can identify good opportunities and make offers for us. We pay all cash and can close in 30 days.”
Yes, that’s an actual letter.
And ya know…
I do tell people to say they can pay all cash and close quickly. If they can. But here is a guy who is looking for cash buyers who then tells me he is a cash buyer. Anyone else have trouble following that logic?
Let’s disregard that little piece of fiction and get on to the real issue.
Do you really think I am going to hand over my hard-found cash buyers list to you? REALLY? I wholesale properties. Finding cash buyers in my area is part of my job and it takes work. Why the H-E-Double Hockey Sticks would I send my clients to a competitor? Especially one who is going to waste their time with crap deals? Because face it, when you are new, you really don’t know what a good deal is. And more importantly, you don’t know what a good deal is for an individual buyer.
While it’s very nice to have a list of people who pay cash for properties, it is even more important to have a relationship with that buyer. You need to know what kind of properties they like to buy, where they like to buy them, how much rehab is involved, what price ranges they work in, and so on.
Taking the example sent from the freshly sprung seminar graduate above, my response to him was this:
“We teach our people NOT to buy properties but to acquire CONTROL of properties. We don’t use real estate agents when we acquire properties. We try very hard not to offer cash for deals. We work locally. We do not work in properties over $300k because our demographics show that the majority of people in our area cannot afford properties in that price range.”
Well, you know I lost that poor guy as he tried to discern the difference between buying and controlling properties.
When you blindly send out letters to investors to offer your services, you might want to ask about their needs and preferences rather than try to make yourself look like a player. We know you’re new. And there’s nothing wrong with being new. Don’t try to be something you’re not. You will be found out. (And if you heard your mother’s voice in your head when you read that last bit, thank her.)
Work locally. Go to city-data.com to find out what people in your area earn. Find out the median prices of home sales. Check out this article to find out what price range you should be working in: http://westfloridareia.com/finding-your-pricing-sweet-spot/
Meet other investors in your area. Go to your local real estate investors meetings (find them online at meetup.com, Creonline.com and NationalREIA.com). Listen to what’s being pitched and what prices are being bandied about. Learn your local market. Unless you live in a very remote area, there will be enough business in your home county to support your efforts.
It’s okay to be new in the business. We were all new at one point. Just don’t pretend to know more than you do. Because believe me, as many years as some of us have in the business, we are still making mistakes and we are still learning. That’s part of the fun.