When you are ready to sell a property that you have rehabbed or recently acquired, wouldn’t it be great if you had a tenant or buyer standing in the wings to buy it? That’s the idea of a Cash Flow Buyers List. A Cash Flow Buyers List gives you a list of people who may be credit challenged and need help getting into a property of their own. They typically seek to rent-to-own or enter into some type of seller financing. The sooner you have a buyer like this ready to get into your properties, the sooner the property starts paying for itself and the sooner you create a positive Cash Flow each month.
According to the experts from PMI, your investment strategy and level of real estate investment activity determine whether a Cash Flow Buyers List is important for you. If you are turning three or four properties a month, a Cash Flow Buyers List is a necessity. If you are doing only one or two properties a year, then a list may not be the answer—you market your properties as they become ready to sell using traditional methods.
Cash Flow is an investment strategy that you use to acquire and sell properties, offering financing to credit challenged buyers. You are their bank – you receive a small amount of money down and payments over time until they can refinance. Having a list of buyers who are ready and able to buy on these terms allows you to accomplish your goal of acquiring and selling properties quickly.
Cash Flow Buyers have a general idea of the type of property they want and are usually grateful for the opportunity to get into a home of their own with a small amount down and monthly payments. In most cases, they pay top dollar for the home because they know they are getting terms they would not normally have access to. Terms include interest rate, time frame of the loan, clauses in the contract, etc. In the real estate world, you either get terms or price, almost never both.
A Cash Flow Buyers List is incredibly helpful because you will have a good idea of what people can afford to put down and pay monthly in your targeted area, so you can buy properties in a way that the numbers work for you to produce a positive cash flow of at least $100 per month. You will pre-approve the buyers on your list with you, the banker, so you know in advance if they don’t have a down payment or can’t afford a certain monthly payment. This allows you to focus on the buyer you can execute a successful deal with.
This is a creative strategy that may help you in your business. In many cases, buyers on your Cash Flow list will be more flexible and willing to compromise on a property that may not exactly meet their needs—as long as they obtain financing from someone.