Wholesaler Essentials: How To Screen You...

Hey guys, Steph Davis here…

Cash buyers are one half of the life blood of your wholesaling business. You’ve got to have good deals and you’ve got to have cash buyers.

Those of you who know me and who follow my lessons, you know that I like to start with my buyers first. While this is a critical piece of the puzzle, there comes the dilemma of…

How can you determine who are the genuine cash buyers and who are just door-knockers and tire-kickers?

The latter being a huge waste of time. So, how do you tell the difference?

The questions that I ask – and the way that I ask those questions – can reveal a lot about the person. That’s what this lesson hones in on – how I do this – and how you can do it too.

Another Great Article

Not long ago my buddy, Jamel Gibbs, published this awesome lesson: Four Critical Cash Buyer Questions to Ask. It’s a great article. This guy is a great wholesaler, very successful, but what he didn’t reference in his article is how to tell the difference between your quality cash buyer and your tire kickers.

So that’s what I’ll be talking about here…

What’s the Buyer Looking for?

As it often happens, after you’ve put out an ad, say on Craigslist, those who respond to the ad aren’t always as clear, open, and honest as you’d hope.

What I like to do is find out from a potential buyer exactly what they are looking for in a deal:

What part of town they like to invest in.
What parts of town they stay away from.
What their maximum price is.
What is the minimum square footage.
What is their preference for number of bedrooms and bathrooms.

In other words, I’m digging down to find out exactly what they want in a deal.

I do my wholesaling backwards from most other investors. I get my buyers first by asking what they’re looking for. From there I’ll go to the MLS or talk to other wholesalers that I work with to target properties that fit that potential buyer’s criteria.

How Can the Beginner Investor Tell the Difference?

So how can you, as a beginner, determine who of your responders, are bona fide cash buyers?

difference First of all, if you’re advertising on places like Craigslist, just know that there are a ton of new wholesalers and investors who are all over Craigslist. They’re pretending to be cash buyers. Now there’s nothing wrong with that. In fact, that’s how I got started. I was too afraid to call people and actually negotiate, so I’d do it all by email. It seemed safer that way.

I still use Craigslist, but now I’m not afraid to talk to people, and my BS Detector is pretty accurate. I can usually tell within a few minutes into the call if this person is just wasting my time. You have to realize that a lot of these people are not going to be actual buyers – just so you know.

Are There Vague Answers?

If I ask the person, “What kind of deals are you looking for?” and they give a vague answer like, “Oh, you know, just any good deal,” – that’s a definite red flag.

The thing is, the buyers on my list who are repeat buyers have very specific criteria. They know exactly what they’re looking for. Rarely will a true, died-in-the-wool cash buyer be vague about what he’s looking for. They know what they want.

This will be your first indication of whether or not you are talking to a valid cash buyer or a wannabe.

Never Ask This Question

Another thing that I’ve learned is never to ask the question, “Are you a cash buyer?”

What I’ve found is that almost everyone will just say, “Yes.” (By the way, in all my marketing, I always stipulate Cash Only, which helps to weed out some people.)

Here’s the problem with asking that question. Some people feel that if they get a bank loan or a traditional mortgage, and pay at closing, they think they are a cash buyer. They are too new to know the difference between getting a loan and actually paying cash.

Instead of asking “Are you a cash buyer?” I ask, “What are you doing for financing?” Or “How are you going to finance this deal?”

listener An actual cash buyer will quickly say, “I’m not getting financing, I’m a cash buyer.”

The ones who are getting financing will usually say, “Well, I’m getting my credit fixed,” or “I’m getting an FHA loan,” or something to that effect.

Be a Good Listener

The winning combination here is to ask decisive questions, and then listen carefully to the answers. As you can see, this is a great way to weed out the tire kickers.

Quick, simple, easy, effective.