Know Your End Buyer

April 6, 2015

Being a real estate investor isn’t just about flipping houses and making money. It is about consistently and efficiently making smart investments that grow your business over the span of a long career. A huge contributing factor to this is knowing your end buyer.

Great real estate investors take the time to educate themselves on who they are selling to, their end buyer. Not every market in the country is the same. Different people have different needs. If you take the business plan that you have now and apply it in a different city across the country, you may or may not be setting yourself up for failure.

To help you grow and expand your business, consider these two factors.

Know who you’re selling to

Since I flip in multiple parts of the country I understand the importance of knowing your end buyer. I focus a lot of my flipping efforts in Atlanta and in Chicago and the end buyers are almost complete opposites.

In Atlanta the majority of my end buyers are Yuppies (Young Urban Professionals), Guppies (Gay Urban Professionals) and Dinks (Double Income No Kids). These buyers are big on entertaining and hosting which is almost a complete 180 from my buyers in Chicago.

The end buyers in Chicago are normally people who are just starting their family or first time home buyers. Rooms and storage are the main concern with these end buyers.

So you can see how important it is to understand the end buyers in your area and in areas that you want to expand to. Once you understand the people, you can better understand the second factor.

Know what your end buyer wants

You understand the people, now it’s time to apply that to your business. If you know your end buyer then you understand what they are looking for in a house. You can flip houses with your end buyer in mind and add features that you know will make it sell fast and at full price. I’ll use Atlanta and Chicago as examples again.

As I mentioned earlier, Yuppies, Guppies and Dinks are all big on entertaining. I keep this in mind when I flip houses and add in features that meet their needs. Back patio decks for parties and BBQ are great for entertaining. If I can create space inside of the house by knocking out part of a wall or opening up the kitchen then I do that.

In Chicago, with the main focus being new families and first time buyers, I have to change my strategy. These end buyers like having more rooms in the house, whether they are for people or for storage. Big garages are almost always a must, and anytime I can find a house with a den or family room I know it will sell fast.

You can see how understanding your buyers in different markets can be challenging, but if executed correctly, it can lead to a lot of flips and a lot of profit. Remember, putting the wrong features into houses will drive buyers away. You may be able to draw them in but you won’t keep them. Know your end buyer, understand their needs and you’ll have no problem flipping houses wherever you want!