An Introduction to Buyers Lists

Buyers lists are a wholesaler's ultimate weapon. While many argue that the property itself is the most important part of wholesaling, it is the buyers list that helps you move properties at a lighting fast pace, and it is the buyers list that allows you to leverage deals and earn the most money for yourself.

Buyers lists help you convince sellers that you can move their property in a short amount of time, and they provide you with the information you need to differentiate between a good and a bad deal.

The buyers list is the most important aspect of wholesaling real estate. However, because of this, an incomplete or inadequate buyers list virtually guarantees failure in the wholesaling industry, and an extensive and comprehensive buyers list is almost a complete guarantee of success.

What Are Buyers Lists?

Buyers lists are long, well researched lists of property investors and any applicable information about both their wants and their buying habits. Buyers lists are not something that you find online - they are created by you, the wholesaler, using various techniques that help you locate who might be a potentially interested investor in properties you expect to offer.

These buyers lists are usually very large - as large as you can possibly make them, in fact. Having hundreds and hundreds of potential buyers at your disposal means that you have multiple individuals to contact in almost every location and who will be interested in almost every type of rehab project.

The primary reason that your buyers list is so large, however, is because you want to be able to deal properties from any location across the country - but most investors are interested in locations they can visit easily, because they are very likely to remodel the home in order to resell it at a higher value.

Therefore, your goal when creating the buyers list is to find multiple buyers in a large number of locations.

Creating the List

- Starting the Buyer Search

While it may feel as though the best way to go about building a buyers list is to search for buyers once you find a great property deal, that is actually the wrong way to go about creating the list. Instead, you want to be building your buyers list from the moment you begin wholesaling - long before you have even found your first property.

That is not to say that you should ignore a good deal just because you have no buyers in the area. Rather, finding buyers can be a long and laborious process - and you only have a very short term contract on the property with which to deal it. Even if you find the best property in history, there is no guarantee that you will be able to find a buyer in time if you do not already have contacts, and the seller is likely going to grow impatient and go back on the deal.

Instead, start finding buyers the moment you decide to become a wholesaler and do not stop even after you have dealt a few properties. As mentioned earlier, your buyers list is the ultimate weapon - not only will it help you sell these properties, but it will also help you convince sellers that you are the go to guy (or girl) for completing the sale.

- Ways to Find Buyers

Finding buyers is about two things:

1) Looking for Cues

2) Being Social

There are only two types of places to find buyers: Public arenas (like clubs and property groups) and hidden locations (such as newspaper advertisements, which we will discuss later).

At public arenas (and, in a sense, with hidden locations), you are going to need to use your social skills and influence to impress buyers and convince them that you have enough knowledge of the industry and enough trustworthiness that you will be able to provide them with good deals that they will be interested in. They are just as interested in great properties as you are in selling them, so there is a good chance they will be happy to give you their information because they, too, are looking for the next big score.

The most common public arena is real estate groups. It can be hard to get invited to these groups and equally hard to find a way to contact the members of these groups, but if you can find a membership list or introduce yourself to just one of the members in order to get invited to one of their events. You can likely find investors at other high income non-real estate meetings as well, but real estate groups are a good place to start, especially if you are looking in a new area.

But one thing to remember is that real estate groups are targeted by every prospective wholesaler. Investors only have so much money that they can spend on new properties, and if every single wholesaler is contacting them to try to unload their properties, these investors may either be tapped out in terms of both financing and patience from being hassled by the inconsiderate wholesalers that may not be contacting them about properties of interest.

That's why you need to look for buyers outside of real estate groups - people that may not be targeted by as many wholesalers but may have equally as much money to invest in new properties.

- How to Find Hidden Buyers

There are a lot of different ways to find unadvertised buyers. Every wholesaler learns their won tricks to catching some of the subtle ways that prospective investors accidentally advertise themselves, but here are a few methods you can implement in order to catch people that might be investors:

Classified Ads

Buyers do not go about advertising themselves in public locations. What they do, however, is sell the properties that they have purchased and fixed up for resale. Look for key words like "owner financing available" - a commonly used term by investors, and a very uncommon term to find offered by standard home sellers and businesses. Anyone offering owner financing or similarly uncommon information could be someone that invest in property - and you now know that once they make that sale, they are going to have some cash on hand for their next investment.

Personal Website

Another method is a personal website for you, the wholesaler. There are a number of ways to go about doing this effectively, but one of the best ways is to create a website that talks about yourself and your successes, and shows off some of the properties you have unloaded, prices, etc. You may even want to showcase currently available properties as well.

Are you likely to find buyers for those current properties? Not at all, but you can have a form that investors that happen upon your website can fill out to be notified of potential properties in their area. You may even find some sellers as well.

Direct Mail

Various direct mailing methods are also very useful for finding buyers. Sending direct mail letters is a small investment, but the potential to find people interested in properties is very high, and the likelihood that they have been found by other wholesalers much lower.

Once you have found these hidden buyers you will need to woo them just like you need to woo the more public buyers by calling them on the phone and convincing them that you will be the best contact for them in the future.

A Comprehensive List

Now that you have started compiling the list, you should also be adding as much information as you can about your buyers. You will learn more questions to ask as you start to gain more wholesaling experience (everyone has their own questions that are helpful to them) but you are not only looking for contact information. You are looking for information on the houses they buy, their financing, their history in the business - anything that you can use to help yourself complete future transactions.

Some of the questions to ask include:

- What states are they currently making purchases?

- What cities and what neighborhoods are they interested in?

- Are they interested in investing in rehab projects?

- What level of rehab project to they prefer?

- What level of rehab project is acceptable?

- How much are they willing to invest in repairs?

- How much of an investment are they willing to make?

- How much of an investment do they usually make?

- What types of financing do they have available?

The questions you can ask are virtually limitless, though it is best to have all of these questions planned out ahead of time so that you can ask them in the beginning rather than call and hassle the buyers later.

More About Your Buyers Database

We have discussed why your buyers list is such an important piece of your wholesaling success, but it is important to also remember that your buyers database is also an important learning tool for you. A good wholesaler can get by with a comprehensive buyers list, but a great wholesaler can use their buyers list as a way to learn more about themselves, their buyers, and their properties.

Think of your buyers database like a psychological experiment - all of the data points represent pieces of information that are either similar or dissimilar from other data points. When you start to group this data together, you can learn about your buyers and what to expect when you contact them.

For example, assume you have several buyers that you found via the classified ads tip mentioned above. You mark that you found them via classified ads in the buyers list. Some of these buyers were very reluctant to hear from you while others were more than welcoming to receive your call. You can also mark that in a buyers database as well, noting their personalities so that you can be prepared to who you are talking to when you call them up in the future.

As you continue to be a wholesaler, you may find a common theme - those that were reluctant to hear from you are actually your best buyers, and those that were happy to hear from you are the buyers that are trying to rip you off.

You may find a completely different experience yourself, but the point is that that is useful information that you can use to learn from the data points you have gathered - information that can help you learn more about your buyers even before they are placed on your list, and information that you can also refer to when you call your buyers.

Your buyers database is not just a list of prospective buyers - it is the central place for all the information you have on your buyers, including information on the buyers as people so that you can know exactly who you are dealing with even when you have not spoken with the buyer in a long time.

Leverage

The final point about buyers lists is that they must be as comprehensive as possible. The more buyers you have for a particular piece of property, the easier it will be to ask for larger deposits, more money for the property, and other items that you cannot necessarily ask for when you only have a few buyers. Multiple buyers allow you to leverage them against the others in order to get more from the property - and the more you get from the property, the more you will profit.

Summary of Buyers Lists

An effective buyers list guarantees that you are going to be an effective wholesaler. The buyers list is your primary reference for:

o Contacting buyers when you have a property for sale in their area.

o Convincing sellers that you have buyers that will be interested in their property.

o Finding multiple buyers that you can use to leverage more generous income from.

The buyers list is the single most important tool you have for profiting as a wholesaler. Spending time ensuring that it is full of prospective investors in multiple areas across the country is your key to having a great deal of financial success.

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