Hey there, Cam Dunlap here…
I got an interesting question from a podcast listener, and I want to bring the useful info here to you fine folks:
“Should we introduce ourselves to an iBuyer as an investor or a wholesaler?
Could you give us an example of an opening line?”
First, let’s back up a second…
What’s an iBuyer?
Well, iBuyer comes from the term “instant buyer.” It’s a real estate company, hedge fund or other financial institution that uses algorithms and technology to buy and resell homes quickly. Hence, “instant.”
Their fancy tech prices homes super-fast, and they make a offers super-fast — usually a cash offer — within 24–48 hours and typically close within 2 weeks. (Some sellers like this approach because they don’t have to deal with staging, showings, etc.)
Sound familiar?
Maybe like a real estate investor?
Exactly.
iBuyers have increasingly emerged in the REI landscape in markets across the nation for the past 6–8 years. They’ve shown themselves to be financial whales that step into a market and often overpay for properties, buying them in mass — paying more than makes sense to smaller investors like us, because they have so much capital they have to deploy that they basically get for free from the government.
Here are some of the top iBuyer whales:
- Opendoor
- Knock
- Offerpad
- RedfinNow
- BlackRock
BTW: Zillow Instant Offers used to be in that list above. But it recently exited the iBuyer arena.
Back to our question: investor or wholesaler?
I’d suggest you introduce yourself as a wholesaler… because there are a lot of iBuyers out there now who are buying from wholesalers.
In fact, I had a conversation recently with a group of high-volume wholesalers in a Mastermind meeting. And we talked about this exact iBuyer subject.
iBuyers are buying in very specific markets — not everywhere. They’re buying in the major marketing areas, bigger cities. And, they’re a form of competition for us.
Pro Tip: The best way to compete with iBuyers is to inject humanity into the process and create a relationship with the seller that an iBuyer simply can’t or won’t. You’ll very distinctly differentiate yourself from an iBuyer by being someone that the seller relates to. Because in the end, people do business with people they like. You’re a polite human, not a robotic giant company.
So again, you want to introduce yourself to an iBuyer as a wholesaler. The benefit you bring to an iBuyer is finding deals and wholesaling them to the iBuyer — saving them the time, trouble, effort and expense of doing that themselves. A lot of iBuyers are buying from wholesalers.
And, there’s a layer in between the two that’s commonly referred to as an aggregator. An aggregator would be someone who comes in and works with a bunch of wholesalers in a particular market and buys properties from them, packages it up, and then resells it to the iBuyer that only wants to buy many properties at a time: 10–500.
Well, the aggregator can work with you and buy one from you and one from another wholesaler and aggregate a group of properties that they turn around and then sell with a markup to one of these large hedge fund iBuyers.
So the value you bring to iBuyers is that you’re a wholesaler. You find deals that they will likely want.
Your opening line to an iBuyer.
“I’m a wholesaler. I sell bargain properties to bargain hunters every day, and I may well have properties (or I have a property now) that I think you’ll be interested in. Is that what you’re looking for?”
Remember, though, many iBuyers only want to buy a large number of properties at one time, depending on who they are. And again, you’ll likely need to work with an aggregator, so you’ve got to be open to that.
How do you know where iBuyers are buying?
Well, you’ll see them in my Cash Buyer Data Feed program, that’s for sure.
What is that, you ask?
It’s exactly what it says it is and it is awesome!
My team maintains this system in which 20,000–30,000 new cash buyers are added to this list each month. From every state in our great nation, so you can bet there are a few cash buyers where you live or very close by. It’s the easy button for finding legit, real, fresh cash buyers.
And there you have it…
iBuyers 101 explained.
Perhaps you’ll consider doing business with one sometime soon!