Developing, building and maintaining a buyers list for real estate investors is critical to their long-term success in the business. The power in the buyers list is that it allows the investor to put houses under contract and sell them very quickly to a waiting list of perspective buyers. This means that often the investor does not actually need the money to purchase and close on the property. He simply uses his buyers’ money to fund his deal.
The actual buyers list is developed by finding like-minded investors who are looking for deals or are looking to sell deals they have found. The buyers list works both ways, where the investor who owns the list can use it to sell his own properties or other investors’ properties. Either way the investor with the list makes a profit on a deal.
The most common method of developing the list includes business card swapping at local investment club meetings. This is possibly the least productive method of list building as the other investors are generally not real buyers. There are a few in the group that warrant being on a buyers list. Generally however, the more frequent buyers that are the target of the investor, do not come to these meetings. Frankly, there is little or no reason since they are the pros of the industry and have become successful by using certain tactics that work for them.
These larger investors, who usually aren’t at the meetings, are called “whales” in the industry because of their continuous buying power. Some will be wholesalers themselves who have trained teams of referrers (“bird-dogs”) to scour neighborhoods to find abandoned or distressed properties they can buy and re-sell. Others are contractors who rehab properties on an ongoing basis and sell the finished homes to an end-buyer who usually does conventional financing to buy it. All other types of wholesaling deals are purchased with cash or expensive hard money from another investor.
Following are ten ways most investors find their perspective buyers for their lists:
1. Driving for Dollars – looking in neighborhoods for individuals working on properties who are contractors or investors.
2. Bandit Signs – are roadside signs that are called “bandit” signs because they are generally illegal in most cities, common size is 18″ x 24″.
3. Craig’s List – this is a very popular internet site that attracts hundreds of thousands of loonies. Yes, besides the good and well-meaning people who use it there are many jerks out there so be careful.
4. Eviction Hearings – this is a hot spot for both tired landlords and those hardy souls who keep landlording in spite of all its adversity.
5. Newspaper Ads – print advertising is still effective if your offer is exciting enough to get other investors to call.
The real key to massive success using a buyers list is to keep getting as many new people on it as possible. This includes trying to be creative to add new email addresses every day. If you persist in your list building you will only need properties to sell to become very successful in real estate investing – even if these properties are not your own.