By the time you’ve read this, I’m hoping that you are on your way to building a great Power Team, starting with your real estate agent. If you haven’t gotten a great realtor for your team or you’re using an old drinking buddy from college, check out my post on Building Your Power Team before going any further. You’re going to need a realtor or access to the MLS database for your area for this little strategy to work for you.

Cash Buyers

Okay, so you’ve got some deals but don’t know what to do with them. You need buyers. The best buyer is one who has truckloads of cash and is investing in your area on a buy and hold basis. So how do you find them? Here’s one way you can implement immediately following grabbing a good realtor.

Step 1:
Have your realtor go on the MLS and pull all of the properties that were “cash closed” in the last 90 days. You can go back further, but start with the 90-day mark. If your realtor doesn’t know how to do this, they can call the MLS info line to ask tech support on how to navigate to the correct screen to get this information.

Step 2:
The results of this search are going to be a bunch of addresses of properties that have been purchased for cash in the last 90 days. Now, you need to find out who it is that purchased them. Go to your local county tax assessor or property appraiser website. If you don’t know what that is, go on Google and type in “my county” tax assessor. When in doubt, always Google it! Once you get to the tax assessor website, type in the address of the property and the records office will spit out the owner’s name and the property address and, pay attention, the mailing address for the property.

If the mailing address is different from the property address, you’ve got an investor. Put the addresses into a spreadsheet or database of your choice (I use FileMaker Pro for Mac) and add the owner name and mailing address as you go from record to record. If you see the same name pop up two or more times, this is someone you should put a star next to because they’re looking to acquire more than just the occasional deal.

Step 3:
Digest your information and write a letter or create a mailer that is going to be directed to the people you’ve found using Step 1 and Step 2. It should be pretty simple, succinct, and more importantly, should sound legit. Don’t just start sending your junky deals to them thinking they’re going to buy them. You still need to get deals – think discounts in the 30% or more range – to send them, but you have to prep that communication with a “first touch” letter or mailer.

It should read something like this:

Dear Mr. Jones,

My name is Carrington Fisk and I’m a real estate investor in your area. I typically target properties that I can buy, fix, and sell at a strong profit. Due to my innovative marketing methods, I commonly have many deals that come across my desk that meet my internal investment criteria. While I would like to do all of the profitable deals I find, I don’t have the resources available to me to do more than one at a time. I’m aware that you’re purchasing real estatein my area and would like to send you the numbers on properties that meet my own criteria for doing a deal when I don’t have the available resources to complete them. Please call me at 123-456-7890 or send me an email at you@yourdomain.com if you want me to send you deals with built-in equity.

Sincerely,

Carrington Fisk
Phone number
Website
Email

Tweak it if your response isn’t very good and understand that it may take more than one “touch” to get their attention and endear them to you. If you’ve done deals int he past, show them your history a little by highlighting a few recent deals showing that you’re the real deal and that the properties they get from you will be screened by a real investor and will be worth their time.

Once you get a call or email, make sure you find out as much as you can, in a conversational manner, about what they are targeting. A questions you will want to answer are:

• Why are they purchasing? Are they wholesalers like you? Rehabbers? Looking for residual income and tax benefits of owning rental property?
• What areas are they interested in? What areas do they want to avoid? Are they interested in areas outside your city/county/state?
• How many properties are they looking to acquire in the next 6 months? In the next 1/3/5 years?
• Are they looking to continue purchasing properties with cash or are they using lines of credit? Perhaps you could introduce them to your awesome mortgage broker that’s on your Power Team to help them pull equity out of their current properties so they have more buying power for your deals. If they’re buying cash and they have $500,000 to invest, make sure you know how many deals this can be for your area (Cincinnati – 6-12, San Diego 1-2).