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| NOI: $21 | | CAP: 0.062% | | Price: $339,000 | | FMV: $340,000 | |
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Sources Of Buyers
| | Wednesday, December 15, 2004 @ 09:30 AM EST
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Contributed by: John Michael
John Michael Properties
Read more archived articles about Selling
All the strategies for purchasing, contracting, flipping and wholesaling are useless if you don’t have a ready-made market to sell the property.
From the minute you begin negotiating to purchase, control and acquiring property you must begin marketing property to the public. The sooner you have a number of individuals asking you to find them properties the better your production will be.
Consider a few starting points for your success:
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Review potential buyers
Begin by asking yourself, "Who do I know that may be interested in buying or investing in real estate?"
- Fellow real estate investors (most have a list of applicants)
- CPAs, accountants and business associates
- Property management firms (may have access to investors or buyers)
- Realtors or brokers
- Doctors
- Attorneys
- Engineers
- Other professionals
- Investment counselors
- Nothing down investors
- Fix-up investors
- Stockbrokers
- Corporate executives
- Successful business people
- Your relatives
- Your friends
- Your boss
- First-time home buyers
Secondary Sources
Subscribe to a variety of real estate publications and look for individuals who are actively investing. They may know of buyers or invest themselves.
Generating New Sources
- Civil and social activities
- Banking contacts
- Advertising
- Newspaper advertising
- Bulletin boards
- Free paper publications
Bird dogs
A bird dog is anyone who can help you find investors or buyers. You may create a reward system for people who bring you qualified clients, such as a percentage of the potential profit or a finder's fee. I offer my bird-dogs $500 to $5,000 per deal but they must do the courthouse research for me and are paid upon close.
Most first-time home buyers lack money, have limited funds for a down payment and closing costs in today's market and they are not familiar with the real estate process and need your help.
As you build a database of buyers, take the time to gather personal information and qualify them with a lender.
Generally the purchaser will need:
- Down payment: required minimum 5% of purchase price
- Income and job stability
- Must have two years employment in same industry
- PITI Payment = 28% of gross income
- Credit – Willingness to pay
Must not be late on any payments
No bankruptcy
No Foreclosure
- Total Debts inclusive of mortgage payments, secured an unsecured debt not over 30% of gross income
- Satisfactory rent history
- Additional cash (for closing costs and utility deposits)
If I am unable to qualify them with a lender I will look into a lease option purchase or owner carry back for them.
I focus my rate at 2 to 3% above current market rates and normally sell the subject property at retail.
Key factors I look for in a customers is reliability, ability to make the payment and a vested financial interest in the property from 5 to 15% down.
I find a ready buying market with damaged credit and in need of creative financing for homeownership.
Note: John Michael is the author of many guides that can help you become more successful as an investor. See http://www.thecreativeinvestor.com/ChanPart-JohnMichael.html
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