This is one of those chicken/egg questions that a lot of investors ask.
Do I need a property before I look for buyers, or should I have a list of buyers before I find a property?
The most important thing, of course, is to start somewhere – just start. If you don’t have connections, investors to sell to, you’re probably new to the business and might not even know a good deal if you come across it.
Some things you need to know before you can make an educated purchase include:
- how to comp the properties to determine their true after repaired value
- how to determine true repair costs
If you don’t want to “own” properties but you want to be able to “sell” properties, you need buyers. To find buyers:
- constantly attend all the local real estate investor meetings you can find and collect business cards
- search MeetUp.com and NationalREIA.org to find meetings in your area
- call we-buy-houses signs (add them to your buyer’s list)
- call for-rent signs (looking for landlords wanting to buy more)
Find buyers and know what they’re looking for so, when you do find a deal, you have someone to call immediately.
If you purchase correctly so that you can sell at a good/great price, investors will line up to buy from you. It doesn’t take many buyers, just a few good ones who buy over and over from you, to make you a success.
There is no place to buy a buyer’s list or “find” a buyer’s list. This is something you must create for yourself over time by the contacts you make and the referrals you receive.
And it does take time. Starting out, you won’t have a list because you don’t have a proven track record so investors aren’t seeking you out. And you haven’t done enough networking to have met enough serious buyers.
Remember, the list does not need to be long, so don’t panic. Many people create lists with names of every person they can get. That is not a good list – just a long list. What you want is a good list; names of people who actually purchase investment properties in your area and, preferably, over and over.
A list of only 6 good names will give you plenty of opportunity to sell quickly. If you have trouble selling to that large of a list, you don’t really have good deals for sale meaning either you’re keeping too much profit for yourself or you’re paying too much when you purchase.
What can you add? Have you created your buyer’s list yet?