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Buyers List 101: Quality vs. Quantity, Players vs. Newbies and Avoiding Buyer ‘Fatigue’

JP Moses | Investing Strategies > Wholesaling
" It’s no secret that one of the most important, foundational skills any real estate wholesaler needs to learn and learn well, is how to build and manage an active, cash buyers list. These people butter your bread – without them, you have no exit strategy and you’re pretty much dead in the water, right? We’ve published a number of awesome lessons in the past that have focused on the “building” part of the cash buyer. Today, I’d like to delve into the “managing” side of things, because I don’t think it gets enough attention… though it’s a critical piece of the wholesaling puzzle. So, on the table for discussion here are things like: Should you build a huge buyers list or focus on a smaller, higher-quality one? What’s the best way to keep track of your buyers and their criteria? How should you communicate with them? Should you focus only on the “players” or work with newbie buyers too? Should you send your buyers all your properties, or only those in their criteria? What should you say to new cash buyers? What questions should you ask? Should you use a script or just wing it? What’s the best way to actually take down their criteria (I do it without writing – solid tip here). So yeah, lots to cover. But it’s all important stuff, and should answer a lot of the most common questions we hear from aspiring wholesalers over and over again. Let’s get to it, shall we? And we’ll kickoff with the philosophical side of things first, then get tactical… Buyers List Size: Quality or Quantity? Far too often people have lists with hundreds or even thousands of “buyers” but can’t close a deal because they’re not reliable and haven’t created relationships with these people. After closing hundreds of wholesale deals now, I can tell you that most of my cash buyers have been people I developed a personal relationship with, not just someone I “added to my list” and blasted emails out to. That’s not to say the email-blasting-deals-to-a-big-list can’t work. I know wholesalers who take that approach and do well enough with it. But as for me, I guess I want to have my cake and eat it too – I want both types of lists: List 1: My Favorite Five I got this term from Alex Joungblood and I love it. I want a small but very reliable list of people I treat like royalty. Usually around 5 people strong, these are the guys and gals who get called first and they get called personally. So no voice blasts, no impersonal emails… just a warm, friendly and very personal phone call or text, to alert them about the deal. And they know they have a 24-hour courtesy lead on everyone else. List 2: Deep and Wide This is everyone else who is (or might be) a cash buyer. These people get notified after the “Favorite Five” have had their shot and the 24-hour clock has expired. However, I still want it to seem as personal as possible. So we’ll focus mainly on the ones whose criteria seems a possible match for the property and we’ll send them (i) a text blast that feels personal and (ii) a direct-to-voicemail voice blast. For example: “Hey, so sorry I missed ya, but I’ll tell you about this great deal we just got in your voicemail, and you can hit me right back if you’re interested…”) Upgrading and Downgrading – Once someone from “Deep and Wide” steps up and buys a property, they get added to the VIP list…but once they stop showing interest, I drop them back down. So that’s my strategy in a nutshell. Buyers List Experience: Newbies or Players? You know, this is where I kind of set myself apart from other wholesalers around me. Most wholesalers in town are really, primarily interested in only targeting the big boys – the “players” who are paying all cash, landing multiple properties per year (or even per month) and can close in 7 days or less. And I get it, I really do. I know these guys and they’re solid, they’re bankable. It feels really great to know that when you call up Joe Investor, he can size up a deal lickety-split (often right over the phone) and has proven over and over that he’ll put his money where his mouth is. But there’s another side to this coin to consider… The “players” out there are more sophisticated, they’re a lot choosier, and they’ll typically pass on anything that doesn’t strike them as a smoking hot deal. I know guys who won’t even look at a property unless it’s got a minimum $60K profit margin built in. Now that’s all fine and good…but what about the other deals that come our way? What about those with only $20K-$25K built in? Are they just chopped liver? Here’s where I’m going – and I learned this tactic from my buddy Steve Cook: There’s a perfectly legit place in the arena for doing business with the non-players. I’m talking about the “Mom & Pop” investors, who maybe have purchased only 2 or 3 houses before, but they like being in the game at that level. At lot of times, these “Moms & Pops” aren’t already tied into the local investor scene – they may not even really know exactly what “wholesaling” is before they met you and you told them what you do. But here’s the thing: These cash buyers will pay more for your properties than the players will. Got a property worth $200K ARV under contract for $100K? The player may only pay you $110K… whereas the “Mom & Pop” might be deeeeeelighted to pay you $150K. Yes, they can take a little more babysitting. No, they’re not always a slam dunk to deal with. But on the upside, you’re dealing with a sector that most of your competitors are trying to avoid. And that, my friend, smells a lot like opportunity to me. Think about it… Buyers List Fatigue: “Send Them All the Things!” Here’s a decision you’ll need to make: Is it better to send all your properties under contract, to all your buyers, all the time? …or to only send your cash buyers leads that somewhat meet their criteria? For me, this one’s simple: The more you’re able to only send them what they’ve already told you they want, the more they’ll actually pay attention to what you send them. Conversely, the more leads you send them that don’t meet their criteria, the more likely they’ll stop paying attention. Pretty straight forward, right? Bottom line here, my opinion is that you should want your buyers to be eager for you to send them deals, and the best way to do that is to send them leads that will actually whet their appetite as often as humanly possible. Send them “all the things” all the time, and they’ll soon develop “ad blindness” and you’ve lost them. OK, Hold Up a Sec… This lesson’s getting longer than I anticipated. Better break it up into twosies. So let’s call this “Part 1,” and I’ll come backatcha with Part 2 here soon. Fair enough? In part two, we’ll delve into: What should you actually say when interviewing new cash buyers? What specific questions should you ask? Use a script or wing it? What’s the best way to keep track of your buyers and their criteria? How should you ideally communicate with them when you have a new deal? What’s the best way to actually take down their criteria (Yyou’ll love this one). I hope you enjoyed Part 1 here and found it helpful in shaping your own cash buyers philosophy. Now Talk to Me Agree or disagree with any of what I’ve said? Maybe you’ve got your own spin to add or tip to share on this stuff? Fire away, I’m all ears. Leave a comment or question below.   "
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