Profile of an Effective Real Estate Investor Buyer Database
If one or more of your real estate investment strategies involve resale of properties to other investors, whether long or short term, you will be much more successful if you maintain a detailed database of potential buyers. It is your "customer file" for flipping or selling of properties to others in the business.
You'll want to have ready access to all types of data about potential buyer customers, and you'll need to keep it up to date. When you see an opportunity, don't let it evaporate or turn south on you because you can't find the right buyer.
It's Not Just About Contact Information
Of course, like any good CRM (Customer Relationship Management) database, you'll want to have complete contact information, including addresses, phone numbers, email addresses, etc. But, you'll have a lot greater success and higher profits if you also maintain more detailed information about each buyer.
What do they specialize in? Do they have a preferred property type or area of town? Basic financial capabilities are good to know, such as "always has cash," or "needs time to get funding." Always record your experience in deals with each buyer, as you will want to remember problems or good things in the future.
Building Your Database With Buyers From Advertising
By advertising, we're talking about both directions; your ads to find buyers, as well as ads you locate saying things like "I buy houses," or other things that point out an investor buyer to you. Keep up, always watching the newspapers for ads that can point you to a buyer. Give them a call, and start a relationship. You don't need a property right then. You can tell them that you've just finished some deals, but you have some prospects out there.
Run classified ads to let investors know that you have investment properties for sale. When you get that first call, it can make a year of ads all worth the cost.
This approach is one of the most fruitful. After all, who are the members of your local real estate investment clubs? They're other real estate investors or people who want to be. You can build relationships quickly, and with those who are most likely to be your customers in the future. These people are actively engaged in real estate investment, and the club helps to educate them, as well as to bring you together. Some resources:
There are more. Just do a Google search for "real estate investment clubs."
Is It Index Cards, a Notebook, or Computerized Database?
This one's up to you. But, as with so many marketing and business management tasks, computerization provides increased value and efficiency. A database program, such as Microsoft Works or Access may already be on your computer. By creating a database with a record for each buyer, and fields in that record for all of the data you want to maintain, you'll be able to locate them later by pulling them up using different criteria.
Without a Ready Source of Buyers, Your Investing Will Suffer
It's just part of supply and demand. You will be locating properties to purchase, place under assignment, or just refer to other investors for a quick sale and profits. If your buyer database has 10 buyers in it, you'll be a lot less successful than if there are 100. By properly cataloging their interests, requirements, and funding ability, you'll have ready access to a very focused list of potential customers for your next property.
Diligently build and maintain your buyer database. It doesn't have to be computerized, but as it grows, it will certainly make your business more efficient if it is. The key is to match your property opportunities to buyers, usually even before you get involved. Nothing will give you greater confidence in the ultimate outcome of a deal than knowing you've found a deep discount property that will be in demand by multiple buyers in your database.