A significant share of cash buyers are investors, people who are buying properties not to live in but to rent out, or to fix up and sell quickly. From January through May, between 14 and 19 percent of all buyers were investors, according to figures kept by the National Association of Realtors. 

Investors tend to be less emotionally invested in the homes they are buying than people who are buying homes they are going to live in, according to real estate professionals Inman News contacted. As such, these cash buyers are particularly attractive to some real estate agents.

"Cash buyers are usually investors who are more concerned with acquiring the property and not ‘falling in love’ with the home like primary residence buyers," said Amy Wagner, a broker associate for the Walters Team at Candlewood Realty Group in the Denver metro area.

"Because of this, cash buyers usually do not spend as much time looking; the less houses I have to show to one particular buyer, the better for me. (It) cuts down my work time and expenses and frees me up to work with more clients."

Investors tend to know exactly what kind of house they want to buy, where, and how much they are willing to spend.

"The investors are easy. They know what ZIP codes they want and what price they are willing to pay based on the condition of the home and what it will cost to rehab to flip," said Michele Guss, a Thompson’s Realty agent based in the Phoenix metro area.

Transactions involving cash buyers can also be easier and faster because they don’t require loan approvals and appraisals.

According to one Northern Colorado multiple listing service, Information and Real Estate Services (IRES), cash buyers made up 15 percent of transactions in the region between Jan. 1 and June 15. At the same time, figures nationwide hovered at about 26 percent, according to the National Association of Realtors.

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Ron Strehlow, 54, is a "fix and flip" investor in the Denver area. The owner of a wholesale real estate company called Distinct Home Solutions, Strehlow invested in real estate part time for about eight years, but went in full time in 2008 when he was laid off from his job as a software engineer in the telecommunications industry.

"It so happened to be a great time (to) invest in real estate. The market is at a low point, which makes purchasing property at a discount pretty appealing, but there’s still enough buyers that can buy them when they’re turned around and fixed up," Strehlow said.

He buys about 10 homes a year, hires contractors to fix the places up, and usually sells sometime within 90 and 120 days of buying. He works with Wagner at Candlewood to both buy and resell the homes. They’ve worked together for about two years, since Strehlow started investing full time. Since real estate investing is his job, he especially values Wagner’s efficiency, he said.

"(Wagner’s) just easy to work with and efficient as far as placing offers through and follow-up," Strehlow said. "It’s tough finding a (real estate agent) that you work well with. You find one that gets things done the way you want them to and it’s pretty valuable."

Wagner also sticks with him through the multiple-bid situations he often encounters in the Denver market, he said.

"I end up losing a lot more offers than I get, so a lot of (real estate agents) get discouraged. You have to put in several bids and they’re not getting paid obviously until something’s accepted," Strehlow said.

Strehlow found Wagner through a website Candlewood set up specifically for investors to find properties: FixandFlipDenver.com.

The brokerage also targets cash-buyer investors with ads for investment properties on Google, Facebook, LinkedIn, Twitter, WordPress, Craigslist, HotPads and Backpage, said Andrea Altieri, managing broker of the Walters Team at Candlewood. Altieri also sends a weekly newsletter to every lead in the brokerage’s lead database via e-mail marketing company Constant Contact.

For real estate agents interested in working with investors, Strehlow recommends agents go where they congregate.

"There are several investor meetings in the Denver area, real estate agents that want to work with investors should attend them, meet the investors, and give them listings that may fit their investing criteria," he said.

That last part is crucial. "I get a lot of e-mail from (real estate agents) that send me pages of listing(s) that never meet my buying critieria. I don’t even open their e-mails anymore," he said.

As an experienced investor, Strehlow knows exactly what kind of property he wants. He usually makes up his mind about whether he’ll buy a property in the half-hour it takes to tour it.

For a start, he works only with single-family, detached houses, usually with three bedrooms and one bathroom, that he can turn around and sell to first-time homebuyers. And the homes have to be heavily discounted, which means that he buys only "real estate owned" (REO) homes or short sales.

"There needs to be a 30 percent to 40 percent discount from retail price. I get a lot of listings with discounts of 5 percent to 10 percent. That won’t even pay the selling commission," he said. "Everyone I work with makes money, and there has to be that delta to keep everyone happy."

To buy the properties, he uses his own savings and funds from private investors.

"I treat multiple-offer properties just like any other offer. I know what I can sell it for, what repairs and expenses are going to cost and the highest price I can offer, and that’s what my offer will be," Strehlow said.

Strehlow usually knows whether a bid has been accepted within five days of submitting it, though a short sale can take 90 days or more for final approval from the seller’s bank.

Because cash buyers don’t have to deal with loan approvals or appraisals, the speedy transactions they can offer banks is especially helpful when buying REOs, Strehlow said.

"A lot of times the banks want to sell the property as soon as possible, like the end of the month, to get it off the books," he said.

Once the homes Strehlow buys and fixes up are listed, he usually sells within one month, he said, for anywhere from $130,000 to $250,000. But first, he hires contractors to rehabilitate the property.

"The properties I look at would only be purchased by investors. They’re extreme fixer-uppers. Properties that banks generally won’t loan on because the kitchen often isn’t complete, things like that. Banks, for a homeowner, usually want a fully functional house," Strehlow said.

Rehabs often involve repainting the home inside and out; installing new carpeting and flooring; redoing the bathrooms — from the tiles to the plumbing fixtures to the toilets and tubs, if needed; updating the electrical system so that it’s up to code; and replacing the furnace.

"So it’s almost a new house when I sell it. The repairs usually cost between $30,000 and $50,000," Strehlow said.

According to Altieri and Wagner, the market for investment properties in Strehlow’s price range is extremely competitive, partly because the vast majority of such buyers after the expiration of the federal homebuyer tax credits are also purchasing in cash.

Working with cash buyers in a multiple-offer environment has made Wagner re-examine how she finds suitable listings.

"What we have started doing is going back through old inventory that has been on the market a while and ‘forgotten’ and getting our properties that way," Wagner said.

"We have also started taking out contingencies, like inspection, to give us more of an edge over the other cash buyers. The seller likes this because there is less of a chance that the deal will fall through. If all other terms are very similar (price, cash, possession date, etc.), the seller is more likely to pick an offer that looks more solid with less outs."

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