Selling to Cash Buyers Only, Utah

[Lori Greene]

In the past my partners and I have sent our wholesale deals to pretty much all of our RE connections, including rehabbers who use hard money. But once in a while the rehabbers using hard money end up not getting their financing at closing.

Some investors might think, so what, you already sold them the contract, it's their problem now. But we always want to have the best possible reputation with everyone we associate with in the RE world so we can enjoy future working relationships and repeat business. When a rehabber doesn't close on an offer we got under contract it's makes us look bad and upsets those involved. In the many deals we've done, it's only happened a few times. But we are now considering marketing our wholesale deals to Cash Buyers only.

I would like everyone's opinion on whether you think we might sell less contracts marketing to Cash Buyers only or if you think we can sell just as many. What's your opinion on the % of rehabbers you think use hard money vs those who buy with cash? In my experience, it seems like a fair amount of rehabbers don't buy with cash. Do you think we can build a big enough Utah list of Cash Buyers only? And, of course if you know of Cash Buyers in UT, please tell me about them.

[Jeffrey S. Breglio]

I see hundreds of transactions, as lawyer and closing agent. I'm guessing closer to 10% actually use their own cash. Getting HM cash is pretty easy these days and it's usually smarter then tying up your own funds.

A lot of investors will say "cash" even when they mean HM cash. The term is used pretty loosely. So be specific if you do list "cash only." But, my suggestion is open it to everyone, then vet your buyers and work with the ones that actually close. Trust me, if you can tap into those rehabbers, you'll always have a buyer for every deal if it's a good one! The biggest wholesalers in town only wholesale to a small handful of players for this reason. 

Good for you for wanting a good reputation!! It goes a long way in this business. And when your rep falls, it's hard to pick back up. :)

Happy investing!

Jeff