Successful marketers claim time and time again that their biggest source of income is not based on their products or services, but on their listings. The most successful companies understand the needs of the public, then talk about those needs in sales that correspond to their particular product or service. In other words, each business creates its own “niche” clientele to which it sells its products.
In the same way, real estate investors must understand the needs of their niche clientele based on the “product” being sold. The idea is to be able to make money from many facets of real estate, not just owning the deal. By becoming a deal maker and matching properties with specific end users or buyers, you can increase your revenue stream by participating in many more deals.
A wholesale agreement, renovation, rental unit, lease-to-own, or commercial agreement will each have a different end-user with a unique need. Once we understand the need, it is much easier to find a specific product or, in our case, a property to fill that need.
Let’s start by creating a list of participants and how to qualify and categorize each rental, sale and purchase group accordingly:
has) Tenure – long term tenant.
Qualification Questions: Desired location; unit size; affordability; movement time; job status; credit status; references etc.
b) owner/buyer– To rent on a rent to own program.
Qualification Questions: Desired location; house size; down payment amount; affordability; length of time required; job status; ability to repair credit, etc.
against) retail buyer– typical end-buyer purchasing a renovated property as a primary residence.
Qualification Questions: Desired location; affordability; mod cons; movement time; sufficient down payment; financing capacity, etc.
d) investor buyer– who buys a rental property, a rent-to-own property, a property to fix or a commercial property, either retail or wholesale. (Whether or not a property generates income, needs work or not, will determine if you can sell it to a retail or wholesale investor)
Qualification Questions: desired locations; affordability; preference for turnkey properties (ready to rent with or without tenants); Do you want rentals, rent with option to buy? commercial rentals (large multiple units) or upper parts to fix. What are your financing requirements? What is the desired ROI, CoC or CAP rate requirement? What are your purchase terms? Are you a wholesale or retail buyer? Do you require a JV partner?
me) seller investor – an existing owner who wants to sell, perhaps at a discount
Qualification Questions: would you like to sell and if so when? Can you “opt in” your property and if so, for how long? Do you have other properties for sale currently?
F) Money – banks and institutions that will work with you for investment properties
NOT.B.. this is not a finite list.
As you build these lists, you’ll notice how the different categories “snap together” to serve each other. The following are just a couple of examples to give you an idea of how to build and categorize your lists and make them work together.
For example, to get a new tenant, many landlords wait until there is a vacancy before announcing that someone will occupy that vacant unit. We can take a tip from the larger apartment complexes that often have a sign on their buildings: “Spacious 1, 2 and 3 bedroom apartments available.” When he was young, he used to think these places must be hard to rent because the signs never went down. In fact, when he calls, there are often no vacancies, but they are adding him to their tenant list, so when an apartment becomes available, they call applicants.
So that we can find a tenant, we can also advertise before We have a property to qualify which and where the demand is and only then can we find a property that satisfies that need. Advertising can be done similar to the apartment example above, and as calls come in, compile lists of pre-qualified prospects.
Once you receive enough demand for a particular area and property type, you can locate that property, call these contacts to fill the units, and confidently purchase the income-producing property. You can use other categories in your listings by putting the property under lease and assigning that property, with the shortlisted tenants, to a shortlist. investor who wants cash-flow, turnkey rental properties.
A similar process can be done with a rent-to-own program. An ad like: “You CAN afford your dream home today…ask about our program” will get calls. Once you have a few pre-qualified tenants/buyers, you can find the right property to buy. As a dealmaker, you also have the ability to list an investor as a transferee or joint venture partner.
A third example might be finding a distressed property that needs a face lift. Put this property under contract and assign this property to an investor on your list who is a renovator as a wholesale deal. You can also spruce up the property to rental-ready, rent or lease it to the appropriate candidates on your shortlist, or resell the rental property to a retail investor who likes turnkey cash flow property.
You can build your lists through the myriad of advertising media available, as well as through personal contacts, networks, and referrals in a powerful network. The more real estate education you have, the more ways you can creatively “twist” a deal onto your listing, and the more money you’ll make.
The bottom line is that the bigger and more qualified your listings are, the bigger your bank account will be. To quote “The Donald”: Your net worth will always be a reflection of your network.