Real estate investing is probably one of the few businesses where you, the buyer, need to market yourself to the seller. Shouldn’t it be the other way around? If you’re someone who’s been in the real estate wholesaling business for a while, you’d know that your survival depends on finding the most motivated among sellers. In fact, your business is halfway on its way to roaring success if you’ve mastered the art of spotting all the motivated sellers hiding in plain sight.
However, it’s this single shortcoming that routinely puts many an ambitious wholesaler out of business. It’s the reason why most people venturing into it quit even before they’ve made their first property purchase. Learning how to spot great deals takes time and it takes a lot more to seal the deal with a motivated seller. You need to view yourself as a salesman, trying to land his first deal. Besides keeping your eyes and ears open, you must develop your marketing and advertising strategies in order to succeed in real estate investing.
Be someone who is persistent, a creative problem-solver and a smart worker who knows when to stop burning the midnight oil. But most importantly, remember that to succeed in any business you must be willing to pump some money in to make more as profits.
Know your Motivated Sellers
That said, let’s first clearly define who a motivated seller is. It’s simply someone who has a pressing need to sell his or her property. The urgency might be due to a host of reasons like the person or someone in their family being diagnosed with a terminal disease; he or she may be living elsewhere and might be finding it hard to manage their property here; a divorce may be on the cards; tenants may be giving them a hard time by defaulting on rent; they might have inherited the property or be fed up with all the mess created by their property.
There are endless reasons why a person may become motivated to sell their property. It’s up to the creative wholesaler to spot the underlying issue and move in to provide the best solution possible.
Breeds of Motivation
Now, not all motivated sellers are of the same breed. There may be a desperate seller who’s driven by an impending relocation or a divorce. Or, their property might have been on the market for way too long and they’re simply fed up. In such cases, the wholesaler should obviously offer less than the asking price. But remember that sellers usually cannot afford to sell way below the list price.
The next type of seller is someone who’s quite experienced in selling and knows how to use the “motivated” tag to kickstart a bidding war between everyone who thinks it’s a great offer. In such cases, secure a mortgage pre-approval letter from a lender with solid details including the offer validity period. Then make a specific offer without mentioning anything but the price. Close the deal by appealing to their emotional softspots (which you should have guessed by now) and talking to them about their house. Make it an emotional transaction, because selling a home almost always is.
Then there are those people who may try to quietly pass off a problematic property to the next buyer under the guise of being a motivated seller. It’s a tricky situation and if you suspect that nothing in their background actually qualifies them as a motivated seller, ask for a complete home inspection. Pass up buying a property that’s got issues you cannot fix – even if it seems like a great bargain.
Now that you know the various types of motivated sellers you might encounter, here are three ways in which you can zero-in on such sellers.
Put yourself out there
The best and simplest way to put yourself out there as a buyer is sending mailers. You can send mailers out to owners of properties that are specifically in the way of some planned development project; to divorce attorneys whose clients could be your perfect motivated seller; to people whose properties are on the verge of foreclosure; to those who’ve just been laid off and so on.
Other quick and inexpensive ways to generate motivated seller leads is to put up flyers about your business at places like the unemployment office, large stores or put up bandit signs. You could get more creative and recruit mail carriers to inform you about vacant houses or contact all businesses that might be involved when a home is about to be put on sale – like carpet cleaners, home insurance brokers or mortgage companies.
The point is to understand that people face problems everyday and a lot of them could be solved by a simple motivated sale. Find more inspiration here.
Leverage the Internet
If you really mean business, then make sure you’re a wholesaler who not only understands the power of the Internet but knows a trick or two about leveraging it. To begin with, post an ad on Craigslist or Facebook community pages to simply announce you buy houses. The other way to go about it is to email or direct message people who have posted ads about rental properties. There’s a good chance your email will be read by a landlord who’s quite keen to sell.
The other way you can make the best of the Internet is through mobile apps. One app in particular is quite savvy at generating leads. If THIS, Then THAT (IFTTT) is a free app that develops correlations between your most commonly used apps and websites. These connections, known as recipes, are similar to conditional statements in mathematics. Learning how this app works can help you generate leads even when you’re sleeping.
Go After Out-of-State Owners
Out-of-state owners are some of the most motivated, yet overlooked sellers on the market. But it’s not always the easiest thing to track them down. It takes an upfront investment of your time and money. But once you’ve tracked a few genuine owners down, you’ll realize that you have almost no competition on a deal that’s out of the world.
These are people who’re right at the top of the list when it comes to motivation to sell. They are often besieged by worry about a property that’s not in the same state as them. They might be facing financial troubles because they’re paying for a house that they don’t live in; they could have fears of their property being vandalized; or their house has been on the market but just wouldn’t sell because they aren’t there to doll-it up and host open houses; or they might have the age-old problem of a non-paying tenant who’s proving difficult to evict.
Other problems plaguing the out-of-state owner could be a house that’s in dire need of repairs but there’s nobody to supervise the renovation work. Or, they have a property manager that’s clearly taking them for a ride.
Now, if that’s not motivation to sell, what else is? There are a number of free but extremely time consuming ways you can figure out where these out-of-state owners currently reside. Or, you could do some smart thinking and pay up for a list of vetted addresses of such home owners. Learn more here.
No Excuses Please
If you’re someone that’s just starting out in real estate investing, you might be wary of putting in money before you’ve made any. While that’s understandable, it’s no excuse for half-hearted measures. You can generate tons of leads by simply driving around neighborhoods and keeping your eyes peeled for abandoned and/or dilapidated houses. Keep an eye out for graffitied walls, boarded up windows and unkempt, overgrown lots.
It might be difficult to track down the owners of these vacant properties but it’s not impossible. A good place to start can be your local tax assessor’s office. You could also begin by looking up County records to find the recorded deed. The simplest way to find clues is to ask the people who live next to the vacant property. In most cases, they’d be happy to help because the ugly vacant property is damaging their home’s value too.
Be a First Responder
If you do have some spare cash, then consider spending it on buying yourself some motivated sellers lists from trustworthy online websites. After you get your hands on a few lists, begin reaching out to the owners in there. Listen to their problems with your ears trained to detect any kind of distress that could translate into a great deal for you. Also, be ahead of your competitors in responding to major events in their lives, such as a divorce, death or inheritance. There are motivated sellers all around but only the skilled investor can spot them before their competitor does.