Cash Buyer - Landlords?

Question

Quick Question... Based on my research it would seem that most investors that are buying property with a long term hold and rent strategy would be very unlikely to be all cash buyers. In my experience most people buying investment properties want to use the least amount of their own cash as possible, so that it's not locked up and they can go and buy more property.

With that said, when building a buyers list is it a useless strategy to contact landlords or are there some that actually do all cash deals. My thinking is that maybe I should be more focused on flippers.

Ann Bellamy · Answer

Shawn Clark,
Minh L.'s advice was fine except for one thing he wouldn't know, since he's from California.

In Massachusetts, the "courthouse steps" term doesn't have the same meaning as other states.  That's because he meant, "go talk to the guys buying at the foreclosure auctions."

But in NH and MA, the foreclosures are conducted at each property being foreclosed on.  So you'd have to attend each location auction to find those guys.  The guys change as the geography changes, since they will focus on areas where they either have buyers lined up, or want to hold or flip themselves.

So if you go onto the auctioneer websites (google for them) you'll find the auctions and can attend the ones that look like they might draw the biggest crowd.

Didn't mean to go off-topic, but wanted to set you in the right direction.

Account Closed · Answer

Shawn,

If you want to build an all cash buyer's list, go down to the courthouse steps, but those guys are not very friendly because they're walking around with a lot of cash in their pockets.  If you have a deal to wholesale, go down there and pitch. Most of those guys buy & flip with occasional buy-and-hold.

Paying cash allows landlords to get a better deal, and they can do cash out refinance after the acquisition.  Real estate is about leverage and finding good deals so it only makes sense for the landlords to approach it from that perspective.

Tim Czarkowski · Answer

Down here in Florida I would say the majority of investment properties are selling for cash. Being a landlord myself I also purchase with cash and then refinance out. Landlords are going to be much more likely to pay retail or close to retail then a wholesaler and/or auction bidder. A wholesaler has to have their margin to resell the property again where a landlord is going to be focused on their cash on cash return in most cases.

Michael Lauther · Answer

Shawn Clark I am a landlord who buys all cash inside my self directed IRA. in my farm area there are hundreds of landlords who have done the same. It may vary by market but there is a whole world of Self Directed real estate investors who do not use leverage. They are not that hard to fine if you know where to look . Try putting the name of the more popular self directed IRA organizations into your local auditors site . properties are titles in the name of the IRA custodian FBO the owner of the IRA.

Jerry Kisasonak · Answer

I agree Sandy S Harris with the MLS for finding cash buyers. You can get names and address which you can send mail to. It's harder to get a phone number for these investors, but sometimes you can. I just put their name or LLC and sometimes their address into the all-knowing Google and see what comes up. If you can't get a phone number, many times you can get a facebook, linkedin, etc page. Then go there and shoot them a quick message saying that you can help them grow their business, and of course request to add them. I'm always AMAZED at how fast and quick you can dig up stuff on Google. Heck, put my name in there and you can probably tell me things that I don't even know about me  : )

Jerry Kisasonak · Answer

I am a landlord and a wholesaler. I have bought many of my rental with cash, and know other landlords who do likewise. Then, once the property is purchased, renovated, rented and stabilized, then some (probably most) landlords go back and pull their cash back out by getting long-term financing.

As for the Sheriff Sales/Courhouse steps, I've found alot of wholesalers there looking for very very cheap deals. This means they are very unlikely to be interested in paying the wholesaler's assigment fee/mark up when they know how to get great deals on their own. Of course, this is market specific. I'm in the Pittsburgh, Pa market.

Shawn Clark · Answer

Sandy S Harris - I agree about MLS. I just contacted my broker to see if they are willing to pull that info for me. In the meantime I was trying to cut corners and just individually lookup addresses in the registry of deeds that I know are investment properties. If there was a deed and no mortgage I would assume it was paid for wish cash, but I know there are pitfalls to this approach. I will wait for the MLS data, rather than waiting time trying to find a needle in a haystack.

Sandy S Harris · Answer

Shawn Clark, I happen to be of the same mind as you when looking for wholesaling to end buyers- cash offers faster close times & fewer financing issues.

I think the best place to find cash buyers is the MLS. There are many parameters that you can utilize (given you have or can get access). You can search for cash transactions within the last, say 3-6 months for any particular area. Then with that info, go to county record to find the owners. Then get their contact info. These are your cash buyers who are actively buying in any given area. I really think that this is the easiest & quickest way to find cash buyers and build a solid list. Good Luck!!

Ann Bellamy · Answer

Yes, I do.

Here are the ones still operating:

NewEnglandREIA.com - Chelmsford (was nereia.org)
BostonAREIA.com - now in Boston instead of Waltham but the focus is multi-level marketing, not all real estate
Massrealestate.net - Peabody
Easternmassreia.com - Rockland

There is also a new one forming.  If you send me a colleague request and a message with your email address I will make sure you are notified.

Shawn Clark · Answer

Thanks for all the helpful info. 
Minh L. - Good Point. I figured that they must be getting their money back out somehow. 
Mike Jakobczak - Yes, I would defiantly keep all buyers on the list, but with wholesaling it seems like All Cash is key to promising fast turn times. I know how long things get dragged out when their is financing involved. 
Ann Bellamy - Thanks for the clarification. I was always a big confused about that. Ann, do you happen to know of a good REI group in MA. It seems like most of the ones on the BP list are outdated, down websites, or no longer meet regularly.