Can’t find cash buyers? Welcome to the club: There are MANY investors who can’t.
Investors give many reasons for a lack of cash buyers — from “I’m in a bad market” to “It’s a bad economy right now” to “There’s too much competition” to “There are too few of deals” to “Aliens took all the deals” (well, maybe not aliens).
But none of those are the REAL reason that investors can’t find cash buyers.
There ARE cash buyers out there. In fact, cash buyers collectively have BILLIONS of dollars available for real estate investing (yes, Billions with a B… that’s not an exaggeration). It’s actually obscene how much money is out there.
So why are investors having trouble finding these fat cat cash buyers?
The real reason is because investors aren’t communicating enough value to their cash buyers.
If you have a real estate deal, you have an opportunity to give a buyer a return on investment. Sure, the exact numbers and methodology might differ, depending on whether it’s a flip, rental, wholesale deal, multifamily, commercial deal, whatever.
But too few investors adequately communicate that value to buyers. They give details about the property itself, or confuse the situation with too many particulars. Or they generalize. Or they talk about value but don’t really talk about the value that is important to their cash buyers.
All a cash buyer wants to know up-front is what they can get out of the deal compared to how much they have to put in. That’s the value equation. They want to know return versus investment.
But I’m not just talking about how much MONEY they have to put in versus how much MONEY they get out of the deal. Don’t naively assume that every cash buyer just wants to get profit from the deal. There are other valuable returns on the investment as well, including safety, peace of mind, more time, less effort, bragging rights, the ability to own a specific type of deal, multiple extra strategies, an investment that matches a specific time horizon… gosh, I could go on and on here.
Case in point: I’ve turned down investments even though the capital requirement was acceptable but the time and effort required from me was not. In other words, I measured my ROI by the entire amount of money/time/effort I had to put into the deal versus the amount of money I’d get out of the deal (plus the amount of time and effort I would be saved). That kind of information dramatically changes the value equation on SO MANY DEALS.
So how do you communicate value to your cash buyer?
Well, it starts with knowing who your cash buyers are and what they are interested in…
Cash flow? Security? Capital gains? Easy investing? Working in a specific state? Tax advantages? Building a portfolio for retirement? Diversification outside of Wall Street investments? Building a legacy? Getting to say they own real estate?
… There are MANY reasons people invest and you need to know what YOUR cash buyers’ reasons are.
THEN when you find a deal, you need to hammer home the value the property provides. Don’t assume that your buyers can figure out the value for themselves. They’re busy with other things and maybe have a ton of opportunities presented to them everyday. You need to make it explicitly clear what value your deal has.
In fact, I advise that you OVERWHELM your audience with value.
Identify the value and hammer it home over and over (and show how the deal has tons of extra value… even bonus value they never realized would benefit this). You need to bring the deal to the point where it’s ALMOST too good to be true. (Of course you should always present the deal ethically… I just mean that you need to identify the value your buyers want and then show them in no uncertain terms that your deal is exactly what they want.)
And here’s the great news: You can deliver all kinds of value even beyond the money. As I mentioned before, other elements of the deal the provide value include:
- The deal’s safety factor.
- The deal’s location.
- The other components they get in the deal (such as: a turnkey deal might come wrapped in an LLC).
- And don’t forget: You can also be a value — through sharing information and guidance. Many of my clients have this as an additional value add to their cash buyers. It’s huge.
Tear apart your entire business and locate ways to add value — perhaps ways you already add value that you aren’t exploiting, or ways that you can add value it you did something different. Get strategic. Get creative.
For example, for one client, I’m writing an ebook that walks clients step-by-step through the process of building a portfolio. And for another client, I’m creating specific autoresponders for people who are already buyers and now need to learn how to go to the next level by turning one or two properties into a dozen or two dozen properties.
Ultimately, find out what value is important to your cash buyer and make sure you provide an over-abundance of it. Then create marketing that shows them exactly how much value they’ll get. And when you hit that sweet spot, you’ll end up with more cash buyers than you’ll know what to do with! (That’s a nice problem to have).