Review potential buyers Begin by asking yourself, "Who do I know that may be interested in buying or investing in real estate?"
- Fellow real estate investors (most have a list of applicants)
- CPAs, accountants and business associates
- Property management firms (may have access to investors or buyers)
- Realtors or brokers
- Doctors
- Attorneys
- Engineers
- Other professionals
- Investment counselors
- Nothing down investors
- Fix-up investors
- Stockbrokers
- Corporate executives
- Successful business people
- Your relatives
- Your friends
- Your boss
- First-time home buyers
Secondary Sources Subscribe to a variety of real estate publications and look for individuals who are actively investing. They may know of buyers or invest themselves.
Generating New Sources- Civil and social activities
- Banking contacts
- Advertising
- Newspaper advertising
- Bulletin boards
- Free paper publications
Bird dogs A bird dog is anyone who can help you find investors or buyers. You may create a reward system for people who bring you qualified clients, such as a percentage of the potential profit or a finder's fee. I offer my bird-dogs $500 to $5,000 per deal but they must do the courthouse research for me and are paid upon close. Most first-time home buyers lack money, have limited funds for a down payment and closing costs in today's market and they are not familiar with the real estate process and need your help. As you build a database of buyers, take the time to gather personal information and qualify them with a lender. Generally the purchaser will need:
- Down payment: required minimum 5% of purchase price
- Income and job stability
- Must have two years employment in same industry
- PITI Payment=28% of gross income
- Credit – Willingness to pay Must not be late on any payments No Bankruptcy No Foreclosure
- Total Debts inclusive of mortgage payments, secured an unsecured debt not over 30% of gross income
- Satisfactory rent history
- Additional cash (for closing costs and utility deposits)
If I am unable to qualify them with a lender I will look into a lease option purchase or owner carry back for them. I focus my rate at 2 to 3% above current market rates and normally sell the subject property at retail. Key factors I look for in a customers is reliability, ability to make the payment and a vested financial interest in the property from 5 to 15% down. I find a ready buying market with damaged credit and in need of creative financing for homeownership.
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