Finding Deals vs. Lining Up Buyers First

[Brett Allender]

Hello everyone, I've done a lot of research and have come across this topic with pretty even views. Some say don't bother with deals if you have no buyers. Others say get the deals because you have nothing until you have a contract.

I actually have a few (true) buyers that have told me their criteria...maybe 5-7 not many. I have been contacted by many wholesalers acting like cash buyers which is annoying. However I would have no problem partnering with them if they would just be open about who they were. And I have a local Meetup I can blast the deals to, so I would have to say for me getting the deals first would be better. I have not done any real targeted marketing yet other than CL.

What are your thoughts? TIA!

[Johnny Kang]

It's the old, which came first "chicken or the egg?"

Well I'd say in business, if you want to make it, you gotta do both as much as you can, as fast as you can, and some times you have to take a risk and can't wait for the perfect scenario. 

What I mean by that is, in one sense, I totally agree with @Brian Burke in that without a buyer, you really don't have anything to sell to. But some times we can have multiple buyers, know their criteria, but when we do our marketing (yellow letters, post cards, bandit signs, etc.), we don't know which motivated seller will be calling us that would have the type of property your buyers want. (I'm in NYC, so the market can be totally different 1 block away)

Case in point, we got a property under contract in Brooklyn, NY for $550,000 putting $25,000 as our earnest money. The zoning was such that you could build 8 apartments, or condos. But none of the buyers we had (and we knew what they were looking for) said they were interested, even though it matched their criteria as far as the town, purchase price, cost to build etc, saying it was a few blocks over from the side of town they prefer. Just a few blocks!! We didn't know what to do. But by making calls to other people we knew in the industry, our contact knew someone that develops on that side of town and we were able to assign it for $710,000. And it's not just about right side of town, wrong side of town. Buyers can give you everything they're looking for, but some times you just can't match up exactly what they want with the properties you end up finding. Now, the more deals you do, bigger and more diverse your buyers will be and have a larger pool of people you can market to. But some times you just have to jump in and make things happen. :)

Johnny