Motivated Sellers

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Learn How to Find More Motivated Sellers In Any Real Estate Market

Are you struggling to find wholesale real estate deals that are not on the MLS? Are you getting all your wholesale real estate offers laughed at or just rejected? Does this mean wholesaling of real estate is dead? The correct answer is NO! It is still alive and well, but you need to tap into other sources for motivated sellers than the MLS. The MLS in most markets has a lack of inventory available and a healthy supply of retail buyers. Now is that really a bad thing? Heck no, you have a sellers market. It is the best time to sell a rehabbed property to a retail buyer, but you need to find other sources to find distressed properties with motivated sellers.

Now, how do you find these motivated sellers with distressed properties that are not on the MLS? Here are some of the ways to find motives sellers of homes in any market.

  • Referrals – one of the best sources for home leads come from referrals.  I enlist an army of people in any market to refer properties to me.  It is less work that I have to do and fewer people I have to know.  Many of these people would love to make a few hundred dollars from something they come across on a regular basis, but they didn’t know that it could be worth anything.  You want to target anyone doing deliveries, anyone dealing with a regular client base, any one doing health care, anyone working on anything in the property services industry, and so on. You need to guide this group as what you are looking for and where so you get good quality property leads with suffient information ion about those leads.
  • Probate leads – The heirs of the decessed tend to me motivated sellers with a property that often needs updating and/or repairs.  There are lists you can buy.  You can associate with probate or estate attorneys.  You can associate with fumeral homes and estate planners.  Some courthouses are easier to search than others for locating probate filings.  You can locate these leads in the legal notice or public notice section of your local newspapers.
  • Divorce leads – the attorneys and legal assistants that perform uncontested divorces will be a good reliable leads for motivated sellers.
  • Bankruptcy leads – the attorneys that advertise flat fee bankruptcy filings can be a great lead source for motivated sellers.
  • For sale by owners- you should call on all for sale by owner properties.  You will want to keep track of this lead, since they may not be motivated enough now, but in the future they might be more motivated to sell.
  • For rent signs – you should call on all for rent signs.  If the property remains vacant for too long, the seller becomes more motivated.  If they are absentee owners, they can be even more motivated to sell.
  • Free and clear properties – you can have a title company or attorney do a courthouse search for any of the paid off properties in any given county.  They might look for reconveyances or satisfied mortgages.  Especially, if they are absentee owners.
  • Bandit signs – these signs are usually yellow coroplast signs with a handwritten message on it. You will put these in areas where you want to find properties.  You should write a message such as “We Buy Houses and your phone number”.

These are just a few ways that you can find motivated sellers in any real estate market.  Now, it is Tim to get up and put some of these approaches into effect, so you can keep your real estate wholesaling or real estate rehabbing business competitive, if not beating out your competition.  There are plenty of off market houses out there, you just have to be a little smarter than the average real estate investor.

December 11, 2014 / 2 Comments / by / in , ,
Real Estate Wholesalers & Cash Buyers Are You Having Problems Locating The Owners Of Vacant Properties?

I am in Cherry Hill, NJ this week looking for wholesale properties and income properties.  We were driving around a neighborhood yesterday and we came across a house that had sat vacant for well over a year.  The winterization sign on the property stated that it was winterized at least a year ago, which leads us to believe that it was vacant for an even longer period of time.  We noted the condition of the home and the address.  The distressed and vacant property had about of foot of water in the basement (aka split level living area) and a lot of mold growing.

We took the information back to look up on our computer.  We looked up the Camden County Courthouse website.  We went into the Register of Deeds website, but they did not have an online search that we could use.  We did find that the Board of Taxation had an online search feature that we used to find the property owner information and property data. The original borrower was still listed on the tax records.   We took this information and went down to the Camden County Courthouse to the Register of Deeds office and did a data search there.  We found out some interesting things when we performed this search.  We found out that the information was NOT at all up to date.  The last recorded document was in 2010 when a Notice of Lis Pendens was recorded.  We know that the property has been foreclosed on, because of the management company that had their papers plastered all over the windows and doors is the company that handles the property management for one of the largest banks taking back properties in the area.

So, if that was your main source for finding out information about a distressed and vacant property, you would have been out of luck, because it was a dead end that stopped in 2010.  So, now what can you do to find out more about that vacant property?  You should talk to as many neighbors as possible to find out the history of the home, how long it has been vacant, and if they know who the owner is and if they have their contact information.  Many times, I have found out about drug activity, sellers motivation to sell, and contact information for the current owner.  I have noted the property management company listed on the property and contacted them, but in many cases it has ended up as a dead end.  Occasionally, I have gained traction by calling these companies.  I have left letters taped to the front door of the distressed and vacant property to gain access to a listing agent, property manager, prior owners, city officials, or other cash buyers and get them to call me.  I have received a few phone calls by taking this approach.  I also keep in touch with companies that do metal scrap and clean outs of bank owned properties.  A lot of times, they will be called in to clean up a property prior to an agent listing the property for the owner.  I offer them referral fees for every lead that we close on.

The lesson is that you can let an obstacle stop you from finding the property owner and making money of a property sale or you can try a variety of different approaches to gain access to information and profit from a wholesale property deal that most people do not even know about.  You create your own opportunites and find deals that most average cash buyer or real estate wholesalers will never take the time to find.  As real estate markets start to heat up and have more competition, you will need to become even more creative and aggressive in finding distressed properties to pass onto cash buyer or income properties to buy for your own portfolio.

February 22, 2013 / by / in , , ,
Is Your Investment Area In An HOA? Are Your Bandit Signs Disappearing? Try Using Car Magnets

If you are struggling to keep your bandit signs up, you might seriously consider using mobile bandit signs aka car magnets. I have a few areas that I am buying properties in where the HOA is really on top of removing bandit signs almost as soon as they are put up, so it is just a waste of time. In fact, I have even done the whole putting them up on Friday afternoon and taking them down on Sunday night. It did not work in one particular area very well.  As the market starts to hear up and inventory is down, you will need to look for unique ways to bring more motivated sellers to call you.

Why Cosnider Moving Bandit Signs?
So, I had to get a bit more creative. I have a few people I know that live in these areas that could use some extra money. I designed, bought, and gave them car magnets that they keep on their cars and drive around this area. I make sure these cars are not put in garages and that they are parked outside of the homes in the this area, so they are visible to people driving by. The people who have my moving bandit signs on their vehicles are going to places where others will see the sign easily. They are driving to church, grocery stores, doctors offices, hair stylist offices, home improvement stores, eating establishments in the area, etc. I have about 10 cars at this point with these moving bandit signs on them. Some people will keep them on their car for the referral fees that they will get when I have a lead call or some want a monthly fee to keep the sign on their car. I dont pay very much, but something is better than nothing to these people, so I guess that is why they do it. I give my business cards to hand out if someone approaches them too. I have gotten some great phone calls from these moving bandit signs so far and I hope to increase the number of moving bandit signs I have driving around in neighborhoods where I want to buy.

Where to obtain moving bandit signs?
I would recommend doing a search on any search engine for the following “car magnets”. I have used a few websites to obtain my signs. I look for the companinies that are offering discounts if you buy in bulk. Also, I want a company that lets me design my signs on their website for free and give me the flexibility to design it the way I want to design it. I will choose a bright yellow background with black font. My signs are typically 12 x 18 if it is on a car or 12 x 24 if it is on a truck or SUV. I will keep my signs to no more than 3 lines with large letters and easy to read number. Keep in mind, you want people to see the number very easily and be able to record it down or call immediately when they see it. I also use block style, bolded fonts, instead of a script or cursive font style. The latter are really hard to read for more people. Some sign companies have reflective material that they will use to make your sign, thus it will be easy to see any time of day.

Here is what your bandit sign might look like on your car.

Moving Bandit Signs

Moving Bandit Signs

February 17, 2013 / by / in , ,
Are You Struggling To Find Wholesale Properties To Buy Or Pass Onto Your Cash Buyers? I Have The Answer
Referrals For Property Leads

Referrals For Property Leads

As I travel throughout the country, I have found quite a few real estate markets that have heated up quite a bit and there is a lack of listed inventory available.  Please note that I said LISTED inventory, I did not say inventory.  Those real estate investors and cash buyers who have been investing in real estate throughout the gibs and flows of different real estate markets know how to find property no matter what is going on in the real estate market.  If you are new to real estate investing or you forgot how to find non listed properties for sale, I wanted to give you some insight as to what I use to locate properties in any real estate market.

  • Barbers & Hairstylist
  • Bartenders
  • Mail Delivery Drivers
  • Utility Workers – Electric, Gas, & Water
  • Mortgage Brokers
  • Credit Repair Companies
  • Hospice Nurses & Organizations
  • Funeral Directors & Estate Planners
  • Home Insurance & Medicare Insurance Agents
  • Disaster Restoration Companies
  • Surveyors
  • Food Delivery & Other Delivery
  • Mediation Companies
  • Landscapers & Lawn Care

I have placed just a small list of the people that you can network with to build a very steady and profitable flow of motivated distressed property sellers.  If you offer these folks a referral fee for every lead that they give you that you close on, you will have an army of bird dogs referring wholesale properties to you.  It is a great way to gain an advantage over your compeition and leverage other peoples time & contacts.  You will be able to make more money faster than most and pass properties onto cash buyers for a nice profit, because the cash buyers are not use to having to search for proeprties and in some cases they are unwilling to do the work necessary to find wholesale property leads on their own.

February 14, 2013 / 3 Comments / by / in , , , ,
Different Types of Auctions Where You Can Buy Wholesale Properties

There are a variety of different types of auctions where you can find great wholesale properties.  These auctions can be great places to not only buy great whoesale properties, but you can meet other cash buyers here too.  The main thing to keep in mind is that you will need to come to these auctions with cash in hand.  There are a lot of different ways that anyone can come to these auctions with cash.  I will address those options in another blog post.  For now, we need to go through the different types of auctions where you can acquire great wholesale deals. 

  • Foreclosure Auctions – In these auctions, the property being sold is one where the borrower was unable to pay their mortgage or violated their agreement with a lender.  It is the way that the lender can recoup their losses.  The property is sold to the highest bidder.  Typically, the auction will take place at the county courthouse.  The properties being auctioned off at the courthouse are normally bought sight unseen. 
  • Delinquent Portfolio Auctions – The properties that are auctioned off are properties that have been sitting in a lenders portfolio for longer than the average days on market or it is a property they want to liquidate quickly.  The largest nationwide auction companies are www.auction.com, www.hudsonmarshall.com , & www.williamsauction.com.  They will auction off portfolios of properties from Fannie, Freddie, HUD, & banks.  They will re-list the property on the MLS, advertise it aggressively on their websites and all over the internet, they will do aggressive sign marketing, and email the information to their huge buyers list.  Most of the time they will offer an open house a week before the auction will occur, if the auction is going to take place live.  If the auction is going to be exclusively an online auction, they will offer a video tour available to prospective buyers online.  The property is sold to the highest bidder.    
  • Tax Deed Auctions – A tax deed auction occurs due to a tax payer not paying their county/city property taxes.  The county/city will have an auction monthly, quarterly, semi annually, or annually to liquidate the properties that have delinquent taxes.  The county/city has statutes in place that offer them a way to recoup lost revenue from delinquent property taxes.  They have the lawful right to place a lien (superior lien) against the property and within a predetermined timeframe they can sell the property at auction, if the property taxes remain unpaided.  The property is sold at auction sight unseen to the highest cash buyer. 
  • Estate Auctions – These are auctions where a local auction company comes in to liquidate an estate property for the heirs.  They will advertise the upcoming estate auction in a variety of different ways.  They will allow potential cash buyers preview the property before the auction starts for the property. 
  • Private Auctions – There are local private auction companies that will help people liquidate their properites during a local auction or an online auction.  They will market the auction heavily and require cash to purchase the properties. 

The key to success when buying wholesale properties via auctions is to know the value of that property in that area right now.  Most properties are going to need some repairs.  The average wholesale property will need at least $15K – $25K in repairs.  You need to take into consideration your holding costs to get the property on the market or rented too.  If you take these things into consideration, you will land some great wholesale properites at these auctions.

December 31, 2011 / by / in , , , ,
Motivated Sellers & Effective Direct Mail Campaigns to Find Wholesale Properties

If you are wholesaling properties, you are going to need to find motivated sellers.  I have two prior blog posts “Wholesaling Real Estate: How to Approach Sellers in Person who have a Distressed Property” and “Finding Distressed Proeprties When Driving Neighborhoods in Areas Where Cash Buyers are Buying” that identify how to find and approach in person motivated sellers. 

In some cases, it is not the safest or the most effective to approach motivated seller with distressed properties in person.  You might conider approaching these motivated sellers via direct mail.  What do I mean by direct mail?  Well, you can use letters or postcards that you will send to the motivated sellers current mailing address. 

You will use the same type of approach as you would with an in person conversation.  Essentially, you will introduce yourself, state that you are interested in buying a home in the area, you were wondering if they are interested in selling or know someone in the neighborhood who is interested in selling their home.  It does not need to identify that you know they are in foreclosure or that you know that grandma recently passed away.  Infact, I don’t recommend even going in that direction.  Keep it simple! 

Now, let’s discuss the facts of implementing a direct mail marketing campaign.  Typically, it will take at least 7 different mailings before you will capture the attention of your sellers to call.  You will find that your typical response rate to your direct mail marketing is anywhere between 1.5% – 3%.  You will need to set up a budget that will allow you to sustain your marketing to your motivated sellers for at least those 7 times with about 1-2 month lag time in between each mailing.

I really like and have had great success with hand written postcards.  The way that I put these together is by getting white or beige card stock, cut the 8″x11″ sheet of paper once length wise and once width wise so you end up with 4 cards per sheet.  You will then use a blue ink pen and write down the message you want to send them on one side and their mailing address on the other.  You will pay less to mail postcards than letters due to the postage costs. 

If we are going to send out letters, we will type up, print off, sign in blue ink, and put in an envelope that you have written the sellers mailing address in blue ink.  You will make sure you include a return address too, so you can receive notification if that address is no longer a good and deliverable address for that seller.  If you do not put that on there, you will waste money mailing letters or postcards to someone who will never receive it.   

It is in your best interest to create a list of sellers in your target area with mailing addresses and place it in a database that you can note when you send your mailings to them and the response rate for each mailing sent.  It is crucial to note what was sent and when it was sold, so you can effectively track your direct mail marketing efforts to find wholesale real estate deals. 

You can use a notebook, excel, outlook, or some other way to gather, manage, and track your list of motivated sellers and your marketing efforts.  It will help you manage your marketing budget and the effectiveness of your marketing campaigns.  If you are not organized while you are implementing your direct mail marketing campaign,  I know you are wasting either time or money.  When you are first getting started wholesaling real estate, it is crucial to get organized and minimize the amount of wasted effort.   Learn how to be effective and you will be on your way to finding success that much sooner.

October 6, 2011 / by / in , ,
Wholesaling Real Estate: How to Approach Sellers in Person who have a Distressed Property

In the blog post “Finding Distressed Properties When Driving Neighborhoods In Areas Where Cash Buyers Are Buying“, you learned how to identify distressed properties to pursue.  In this blog post, I want to introduce a way that you can approach these people & determine their level of motivation. 

The first thing to keep in mind is that not ever person is going to be fond of you approaching their home and asking them if they want to sell, so I do not recommend that approach in most cases.  However, if you are dead set on approaching these sellers of distressed properties face to face, you might try the following:

  • Approach not only that distressed home in the neighborhood, but a few others, so you do not look like you are targetting just them
  • Introduce yourself and let them know you really like the neighborhood and you are looking forward to finding a property in the area you can buy
  • Ask them and the rest of their neighbors if they know of anyone who is selling or might consider selling in the neighborhood sometime soon
  • Wait for them to offer a response.  If tjhey say no, you can offer a referral fee for anyone they refer to you who is looking to sell a property

It is a less intrusive way to approach and gain information about the sellers motivation to sell or gain referrals in your target area.  It can be a very successful technique if you implement it in the appropriate locations (where you are not putting your life in jeopardy) and in a non confrontational way.  It is a great way to find wholesale properties that your competition does not know about yet.  It is a great way to be more appealing to your cash buyers, because you are finding and negotiating wholesale deals that they can’t even find, but they can definitely benefit from simply by knowing you.

October 4, 2011 / 1 Comment / by / in , , ,
Reasons Why Sellers are Motivated to Sell a Property for Wholesale
Motivated Sellers

Motivated Sellers

Every real estate investor must be able to identify a motivated seller.  If you do not understand what makes someone motivated to sell a property for wholesale, you could waste a lot of time on a seller who is not REALLY motivated.  There are two main reasons why people are motivated to sell a property for a discount, which are situations and conditions. 

Sellers that have situations that motivate them to sell will typically have one of the following:

  • Job transfer
  • Business failure
  • Live out of state
  • Poor budgeting skills
  • Own more than one home
  • Tired landlord

Sellers that have conditions that motivate them to sell will commonly be facing one of the following:

  • Forclosure
  • Probate
  • Divorce
  • Disability
  • Death
  • Disability
  • Unemployment or under employment
  • Market depreciation
  • Long days on market or a lot of local competition
  • Mortgage interest rate gone bad

If you can identify one of the factors identified above, you have a good chance of being able to negotiate a great wholesale property deal.  It is crucial to speak with the seller and completely understand what they need out of the property for them to let it go for a discount.  Essentially, we are going to be problem solvers for this motivated property seller.  If we can figure out their needs and offer a solution that will help them and work for us, we have jsut created a WIN-WIN for all parties. 

 

 

September 29, 2011 / by / in , ,