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A buyers list is a list of real estate investors to whom [real estate wholesalers](https://www.offermarket.us/real-estate-glossary/wholesale-properties) market their deals. In traditional wholesale real estate, this is a [cash buyer](https://www.offermarket.us/real-estate-glossary/cash-buyer) and [hard money](https://www.offermarket.us/real-estate-glossary/hard-money) buyers list, as the buyers on the list are able to close fast in as-is condition.

 

If you're involved with real estate wholesaling, you want to make sure you have dependable homebuyers on your buyers list. The most dependable homebuyers are carefully verified for [proof of funds](https://www.offermarket.us/real-estate-glossary/proof-of-funds).

 

## On the topic of wholesale buyers list
 

- [Free dispositions platform for wholesalers](https://www.offermarket.us/wholesalers)
- [Wholesale Real Estate 101](https://www.offermarket.us/guides/wholesale-real-estate-101)

A buyers list is a list of buyers to whom wholesalers market their deals. In traditional wholesaling, this is a cash buyers list, as the buyers on the list are able to close fast using cash in as-is condition.

Buyers List - Real Estate Terms - OfferMarket

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Buyers List - OfferMarket

What is Buyers List in real estate?

#### What is Free Cash Flow? 💰

 

Free Cash Flow, often abbreviated as "FCF", is the cash generated by a real estate investment after all expenses are subtracted from rental income. Understanding free cash flow is important because the safest way to build wealth through real estate is to own cash flowing investment properties.

 

#### FCF Example

 

Let's say you own a house where monthly mortgage principal, interest, taxes and insurance ("[PITI](https://www.offermarket.us/real-estate-glossary/piti)") is $2,300. You reserve an additional $200 per month for maintenance based on the property's condition and prior year maintenance expenses. Now, let's say you rent this property for $3,000 per month. Your free cash flow in this example is $500 per month, $6,000 per year.

 

Next year, you raise your rent to $3,100 per month and your PITI and maintenance budget remains the same. Your free cash flow is now $600 per month, $7,200 per year.

 

#### Why is free cash flow important?

 

Free cash flow is important because owning the property does not reduce your cash balance, it adds to your cash balance. If you own a property that costs $3,500 per month (PITI + maintenance), and only rents for $3,000, then you need to pay out $500 per month or $6,000 per year in order to cover the difference. This is an uncomfortable financial situation to be in, especially if you or your family experiences a loss of income (i.e. job loss).

 

#### When does it make sense to invest in real estate that does not cash flow?

 

Some investors are comfortable investing in real estate with negative cash flow because they expect a market to appreciate. Other investors buy properties with a low % down payment as possible. The lower the down payment, the higher your PITI, the lower your cash flow.

 

#### Related concepts:

 

- [Cash On Cash Return](https://www.offermarket.us/real-estate-glossary/cash-on-cash-return)
- [Cash Out Refinance](https://www.offermarket.us/real-estate-glossary/cash-out-refinance)
- [BRRR](https://offermarket.us/real-estate-glossary/brrr-buy-rehab-rent-refinance)

Free cash flow, FCF, the the cash generated by a real estate investment after all expenses are accounted for. There's more to learn about free cash flow at OfferMarket

Free Cash Flow or FCF - OfferMarket Real Estate Glossary

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Free Cash Flow - Real Estate Glossary - OfferMarket

What is Free Cash Flow ("FCF") in real estate?

#### What is a 203k loan?

 

A 203k loan is a rehabilitation loan issued by the Federal Housing Administration (FHA) that includes purchase price and construction budget for a property. 203k loans are issued by participating mortgage lenders to qualifying homebuyers who intend to live in the property once construction is completed. A licensed [general contractor](https://www.offermarket.us/real-estate-glossary/general-contractor) is required to ensure the construction is completed on time and on budget. The budget is determined by a 3rd party 203k inspector who issues a Specification Of Repairs ("SOR") which is reconciled with the general contractor's budget.

 

#### What is the down payment for a 203k loan?

 

203k loans require just a 3.5% down payment on the value of the purchase price plus the SOR budget.

 

#### How does a 203k loan work?

 

Let's say you buy a house that needs significant [rehab](https://www.offermarket.us/real-estate-glossary/rehab) before moving in. The [purchase price](https://www.offermarket.us/real-estate-glossary/purchase-price) is $100,000 and the rehab budget based the SOR is $100,000. You just need to put down 3.5% of the $200,000 value or $7,000 plus closing costs. That leaves a loan of $193,000. The bank issuing the loan has an [appraisal](https://www.offermarket.us/real-estate-glossary/appraisal) conducted to make sure the rehabbed property is worth at least as much as the investment price (purchase price plus rehab budget). 

 

An [appraisal](https://www.offermarket.us/real-estate-glossary/appraisal) is conducted and the appraiser determines, based on [comps](https://www.offermarket.us/real-estate-glossary/comps), that the complete house will be worth $250,000. The rehab is completed on budget, with the contractor being paid in 3 separate draws based on work performed against the SOR.

 

At the end of the project, you move into a house that is worth $250,000, with a $193,000 mortgage loan. That means you have 22.8% equity in the property worth $57,000. You went from 3.5% equity down payment to 22.8% equity, for a gain of $50,000 in equity. Not too shabby!

A 203k loan is a loan issued by the Federal Housing Administration (FHA) that includes purchase price and construction budget for a property.

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FHA 203k Loan - Real Estate Glossary - OfferMarket

What is FHA 203k Loan in real estate?

#### What is an assignment of contract?

 

An assignment of contract is when the Buyer in a real estate transaction assigns their role to another Buyer in exchange for a fee.

 

The act of one buyer selling a contract to another buyer is commonly referred to as real estate "wholesaling".

 

#### Let's review an example of an assignment of contract

 

Joe is a real estate wholesaler and he notices 123 Main St is badly in need of landscaping and renovation. He does some research and finds that the property was inherited by Greg who lives out of state and has no interest in dealing with the property. 

 

Joe knows several local [fix and flip](https://www.offermarket.us/real-estate-glossary/fix-and-flip) and rental property investors who would buy this property for the right price. He tours the property and conservatively estimates the rehab budget necessary to get 123 Main St to an [after-repair value (ARV)](https://www.offermarket.us/real-estate-glossary/arv-after-repair-value) of similar houses in good condition in the neighborhood. Joe runs some numbers to determine the range that his investors would be willing to pay and makes an offer to Greg for $25,000. 

 

Greg accepts the offer and Joe markets the contract to his buyer's list at $30,000 which is the $25,000 purchase price plus a $5,000 assignment fee. Sure enough Stan, one of Joe's most reliable buyers, offers to pay Joe's asking price. Stan signs Joe's Assignment Agreement where he promises to take over the role as Buyer of 123 Main St and pay Joe $5,000 at closing.

An assignment of contract is when the Buyer in a real estate transaction assigns their role to another Buyer in exchange for a fee. There's more to learn about assignable contracts at OfferMarket.