Thoughts on dealing with unsolicited cash buyers?

Question

Hey, I'm curious what people's thoughts are on unsolicited cash buyers reaching out about commercial properties.

I'm at a place where I probably want to sell in the next 3 years or so, so while I'm happy to walk away from crap offers, I'm also starting to be interested in listening to them, doing some play negotiating to see how high I can pull it, and generally pay more attention to the market.

Every now and then, I get a snailmail that reads like, "I'm a small real estate investor, interesting in paying CASH for as-is, and a fair price - no escrow/title, no real estate agents to pay, we can get it done in less than 4 weeks."

1) Are these things even worth responding to, or are they pretty unilaterally bad deals where they try to majorly lowball you and it's a waste of time?

2) In the unlikely case you're actually interested in proceeding, how do you vet these kinds of folks? My biggest concern is that it might be an identity theft scam, since this kind of deal mightrequire a lot more personal information that I'd normally be interested in providing (though hopefully through the LLC, I don't need to provide things like my personal SSN, since there's no credit checks and background checks happening).

Interested in any thought on this. Thanks!

Anthony King · Answer

@David Kim I always mess with them. They will ask how much I'm looking to get, and I'll say "you called me buddy, I'm not looking for anything". They will try to get you to name a price. Wait for them to give you a number then when it's 50% below what you can get on the market laugh at them and say, "good luck, pal, I'm not your guy".

Moses Bowie Russ · Answer

I'll chime in here after hearing all of your color remarks about people trying to earn an honest living. First things first, the risk for fraud is not that high, as long as it's processed the same way a traditional real estate transaction would be, through a title company. You should not be sharing any information with folks outside of a title company. There are some amazing real estate agents out there, but some not so awesome ones as well that cannot read lines, charts graphs or general market sentiment. For the last two years, you could pretty much sell anything quickly. In the next three years commercial properties will be an interesting asset class to offload in my opinion. If the person on the other end sounds like an idiot treat them as such, if it sounds like someone who can help vet them and see if they can help. Not everyone is looking for .50 on the dollar. Some folks are able to put the pieces together and walk away with an appropriate commission for that. Best of luck to you when you sell your portfolio.

Steve Milford · Answer

@David Kim They are looking for a deal. I just tell them, "Yes, I will sell for appraised / retail value minus 5% for lack of Realtors." It stops then all lol, they all tell me no.

Bjorn Ahlblad · Answer

I don't respond to phone calls if I don't recognize the caller and those folk never leave a message. We do get letters and cards in the mail so we look at them and then toss them. When we get ready to sell we'll use a broker she/he can do the work and get paid to do it.

Moses Bowie Russ · Answer

Some of these are not as legitimate as people think they are. Create timelines and ask for an EMD. If they can't make it happen after they signed their own contract, you'll walk away with a few thousand bucks.

Henry Clark · Answer

@David Kim ask them for a letter from their Financing Institution on how much they are approved for.

Chase Hoover · Answer

As a broker we oftentimes send direct mail campaigns to properties fitting certain criteria on behalf of our clients that are actually looking to make serious offers for these types of properties. Many other brokers and serious investors do the same. It's unfortunate that wholesalers and penny investors have scared property owners off with these types of campaigns fishing for lowball deals. If you're interested in potentially selling, I'd check into it a bit first before throwing it away. If it's from a real estate brokerage and seems genuine, it may be worth a phone call. If it's covered in different colors and capital letters and "we buy cash now!!!" verbiage, it's a lowballer.

Joe Villeneuve · Answer

The answer to every question you don't ask is the same, "no". The answer to every question you do ask isn't the same. Think about it.

Ronald Rohde · Answer

They starting on CRE now? I got maybe 1-2 a year for my commercial stuff

Duncan Hayes · Answer

It’s just wholesalers looking for a deal. I wouldn’t worry about fraud. They may not offer what you want but that’s the choice you have to make if you go that route.