Negotiating with a buyer is the second half of real estate investing that needs just as much care – if not more – than negotiating with a seller. When you’re selling, you want to make sure that you’re getting the most money that you can out of a deal, and that you can take it closing quickly. Show your prospective buyer documentation of the recent sales other
real estate investors are currently paying for properties in the area similar or exactly like yours. This will give them more of a reason to do business with you because you are showing them the TRUE BARGAIN deal.
Properly screening and qualifying your buyers is one of the most important things you can do to “flip” your real estate and turn a dollar. You don’t want to be sitting on your investment or contract for a long time; you want to work with individuals or businesses that can “settle fast” and close your deals in a quick fashion. You want real buyers, and there are a number of steps to make sure that you find them.
The first thing you want to make sure of is that you have a real, cash buyer with proof of funds. One way to do this is to ask your buyer to provide a Proof of Funds letter. These are used to demonstrate that your buyer has the financial resources to close a real estate transaction. This is one way to guarantee that your deal will go to closing, and it’s a good thing to make this a standard practice. As the old saying goes, “money talks B.S. walks.” Showing what’s in the bank account is not hard for a buyer, and if a buyer is earnest in his or her intention to purchase your property, they’ll fill out and provide whatever paperwork they need in order to make the deal happen.
Most of your client’s will be rehabbers. Rehabber’s are in the business of repairing and flipping homes to retail buyers. These folks are in the business of buying property to repair and then flip them, and in order to keep their people working this type of investor has to always be purchasing property. That means that a veteran seasoned rehabber should have the cash or financial backing to purchase property quickly – it’s in their best business interest to do so. Selling your property to the veteran seasoned rehabber means quick turnover on your wholesale deals.
Another type of buyer is a buy-and-hold investor. These types of buyers are in the real estate game for the long run. They look at long-term buying and holding of real estate as a revenue generator and a way to build wealth, their main buying criteria is the positive cash-flow potential and equity in a property location does not always play a part in their investment decision. The advantage of the buy-and-hold real estate investor is that he or she typically has deep pockets, and can purchase real estate for cash. Selling property to a buy-and-hold investor is a great way to flip property quickly, and they are all over the place in real estate markets across the country.
However you can sell your wholesale real estate investment opportunities to whomever has the CASH MONEY at the end of the day, the key is making sure that the buyer has the money. Whether you sell to a professional rehabber or a buy-and-hold investor. Using documentation such as a Proof of Funds Letter will also go a long way to making sure you’re not wasting your time with hot air. So choose your buyer wisely, and negotiate effectively.
Happy Wholesaling : )
Marcel aka The Wholesale Kid