Despite the particular real estate exit strategy, an investor plans to use, and it is safe to assume they will need access to a buyer sooner or later. Other than long-term buy and hold strategies, nearly every real estate investment needs an end buyer to facilitate a profit. That said, it is in the best interest of today’s investors to preemptively line up buyers for both current deals and future deals. The more extra buyers an investor has, the higher their odds of selling a property are, which is why compiling a buyers list for real estate investment is so important. Bringing together a buyers list will assure that you have several high-quality buyers at your disposal, significantly mitigating the risk of losing profits.
What is A Buyers List?
A buyers list is a collection of investors that you have previously established a working agreement with. A well-devised buyers list comprises the contact information of people that might serve as potential suitors for your subject properties. It is basically a list of buyers you should contact immediately, as to carry out the final phase of your particular exit strategy; if it involves selling the property. Having a sizeable buyers list at your disposal improves the prospects of a timely and profitable transaction.
It is worth noting, though, that a proper buyers list comprises more than just a few names. In addition to the buyer’s name, investors must, at the very least, collect the following information:
- Buyers’ name
- Email addresses
- Mobile / Landline number
- Purchasing criteria
- Type of funding
- Other relevant information
How to Build a Buyers List
A buyers list will not build itself overnight; you need to continually stay on top of it and contribute to it every week. Perhaps even more importantly, investors need to prepare their buyer’s lists in a way that is conducive to efficiency.
Once you compile a list together, it should be collected in an easily accessible database. It must contain notes on what each specific investor looks for and what their objective is. The more specific with the details you are in the list and its subsequent notes, the simpler it will be to find a buyer soon. Even after you have a great list, it needs constant curation and attention. It is undoubtedly critical to foster the growth of your buyer’s list. You must treat it as a separate entity that must be attended to regularly. By this, I mean: always assure it contains the most up to date buyer preferences and contact information.
Eventually, investors should make an effort to grow their buyer’s list continually. Even lacking a property, investors must focus their attention on establishing relationships that can be added to their contacts. The following illustrates the proper steps that need to be taken to build a buyers list:
Friends & Family
When creating a buyers list, begin with the people that are closest to you. Which family and friends do not even know you are an investor? Please take a moment to let your own network know what it is you are trying to achieve. If they follow up, you should tell them if they have an interest in being notified of any deals that come your way. If they answered in the first place, the chances are that their answer is yes. Though, it would help if you also asked what criteria they may be looking for. The more precise you can be with your list, the higher the odds you can find a property they want. For those searching to build a wholesale buyers list, family and friends can be an excellent resource to start the journey.
It was not long ago that the classified section was the only source for those looking to rent, buy, or sell a property. Mainly newspapers have a weekend edition that will list every luxury apartments for sale or rent. Every home for rent is owned by a landlord that might be looking to buy more property or sell a current one. Give them a phone call and assess their interest in being added to your list. For each angry call you get, you will get one that is open to getting an email on any potential deal you might have. It will not take you more than 15 minutes a week to buy a newspaper and make a few phone calls, but it can result in a significant return.
Property Management Companies
Reaching property management companies or property advisor is best done with repetition. You can visit most property management companies and describe to them what you do and ask if you can reach out to them or the owners the next time you have a potential buyer or a seller. The majority of them will be open to the idea but will have a lot of questions. Be certain you are ready to answer them.
Networking Groups and Investment Clubs
This area has the largest population of investors in your market. Out of every investment club meeting, 85-95 percent of them are investors. You will not be able to reach every one of them in your first meeting, but if you spend time networking before the actual meeting starts, you will be on your way. The most significant thing with any new contact is to follow up with them after your initial meeting. If you get a card and do not call it for a few weeks, it will lose its impact. The very next day after the meeting, you need to email or call while you are still fresh in their mind. All you need to ask them is if it is fine to put them on your buyer list. Most probably, they have nothing to lose, so they will possibly say yes. If you wait too long, they might not know who you are until the next month’s meeting.
Evaluating & Pre-Screening Buyers
While successfully collected, some promising buyers are an excellent start to building a buyers list. Though, navigating through those that might actually prove to be helpful to your future is a skill in itself. Develop a systemized approach to pre-screening and evaluating potential buyers. Doing so might eliminate dead-ends that inevitably cause you to waste money and time.
Accumulate as much information about a prospective buyer as you can. This guarantees that you are not wasting your time on buyers who are not absolutely serious or do not have sufficient means to close on future deals. Building a buyers list is about quality. While quantity might have its advantages, it is helpful to have a list of buyers that you trust and know are willing to follow through.
Organizing and Automating Your Special List
Once the list of buyers is developed, it is equally essential to organize it in a manner that further facilitates the possibility of a profitable transaction. To do so, save your contacts in a database system that will assist you in managing each of them independently. The idea is to have the relevant buyer readily available when you require their assistance.
An unorganized list is quite capable of doing more harm than good. Basically, you do not want to waste valuable time on investors that are not likely to involve themselves with your existing project. Spending all of your time on the wrong buyers will eventually lead to a loss of funds.
In today’s competitive marketplace, it is more critical than ever for investors to maintain a curated list of buyers. Building a buyer list is one of the most prominent strategies an investor might implement. At the very least, an appropriation attempt to find buyers or sellers for deals will always keep you one step ahead of the competitors. Those that take the time to develop their buyer’s list will surely reap the rewards of preparation and efficiency. However, closing on a deal will almost be as simple as making a phone call or two.