Today’s post is going to be a little different. I was lucky enough to have Brandon Turner, from BiggerPockets.com, write a guest post. Not only does he regularly write incredible content over on the BP Blog, but he hosts the BiggerPockets Podcast along with Founder Joshua Dorkin. Needless to say it’s an honor to have him author a blog post for Struggling Investor.
He chose to write about a topic that I get asked about all the time…What are some of the creative ways we can find motivated sellers? It’s a great article and one I know you’ll enjoy.
Let me share some bad news with you (that you probably already know…)
Finding deals is harder than ever.
Gone are the glory days when good deals simply showed up on your doorstep and all you needed to do was find the cash to put it together.
However, let me share some good news with you. The increased competition means greater rewards for those willing to hustle! In other words, let the world fight over the same public deals while you can put in the extra effort to find the hidden ones.
But how do you find those deals?
As everyone in real estate knows, great deals are found through motivated sellers – people who need to sell quickly and getting a high price is not their number one priority. As much as I’d like, though, sellers do not wear a badge on their shirt that says “Hi, I’m Motivated!” Instead, it’s your job to find them.
This post is going to give you 5 creative strategies for finding motivated sellers so you can do more deals and make more money. Let’s get started.
1.) The MLS
Oh, I know. The MLS is hard to find deals on. I get that. It’s not very creative. However, there are STILL deals to be found if you know where to look.
Focus on two areas of the MLS: deals that are brand-new and deals that are waaaaay-old. In other words, the best deals are found by being the early bird or the late bird, not in between.
Ask your real estate agent to set you up with automatic alerts when new properties hit the market, so you’ll be able to move quickly. Then… MOVE QUICKLY! The best way to snag those quick deals is by being fully prepared to buy. This means: have your financing set up, have your team in place, and run like hell to get it under contract quick.
To find the deals that have been on the MLS for a long time, have your agent send you a list of all properties that have been on the MLS for a long period of time. Pay special attention to the properties that have had multiple price reductions- a clear sign they may be motivated to sell.
2.) Direct Mail
Perhaps the most popular among high-volume house flippers and wholesalers, direct mail is the process of sending out letters or postcards to targeted lists of people. You can send to out-of-state owners, people behind on their taxes, owners who are in prison… whatever. (These lists can be purchased from websites like ListSource.com or MelissaData.com.) Once you have your ideal list, sending a “Hi, I buy houses” letter or postcard can allow motivated sellers to get in touch.
Keep in mind – direct mail is largely a “numbers game” and sending out 20 letters probably won’t do anything. The most successful direct mailers send thousands or even millions of letters per year, knowing only a small percentage will ever work out. If you want to learn more about direct mail, you might want to check out these 6000 words I wrote on it.
3.) Eviction Records
Have you ever had to evict someone from a rental property?
If so, you’ll understand what I mean when I say “talk about motivation!” Evictions are stressful, expensive, and make a landlord question why they ever got involved with real estate in the first place. So by contacting landlords who are in the middle of an eviction, you can often find incredible deals by solving that landlord’s problem.
Eviction records are public, which means you can find the information for free through your local government. Take a trip down to your county administrative office today and start asking questions to find out where this list is kept. Once you find it – start mining it!
4.) Driving For Dollars
If you are looking for a highly effective yet inexpensive method to find deals – try driving for dollars. Driving for dollars is the process of driving your prospective neighborhood looking for potential deals. But what does a “deal” look like? Typically, I like to keep an eye out for things like:
- Overgrown lawns
- Tarps on a roof
- Newspapers piling in the driveway
- Legal notices on the doors/windows
- Any other sign of neglect.
Try knocking on the door or simply write down the address and go home to do some research. You’ll likely be able to find the owner by searching the county records (start with your county assessor’s office online) and then send a letter or do further research to track down their phone number. Strike up a conversation and see if they are interested in selling. You never know who might be motivated!
What do I mean by “passion?”
I mean telling everyone you know about what you do and what your goals are. People are naturally attracted to passionate people and want to help them achieve their goals, so let everyone know about those goals! Let me tell you a quick story.
Five years ago I read Ken McElroy’s book The ABC’s of Real Estate Investing and was blown away by the concept of repositioning apartment complexes (aka “flipping” apartment complexes.) I let my passion shine through and told everyone I knew. One of those I told was an older couple from my church who, when I mentioned the idea of buying apartment complexes, looked at me funny and said “that’s interesting, because we have an apartment complex we are looking to sell!”
Nine months later I was the proud owner of a 24 unit apartment complex with practically no money out of pocket.
Was I lucky? Sure! However, as the famous quote goes “The harder I work, the luckier I get!” I would have never known that this company was motivated to sell had I not opened my mouth and shouted my goals from the rooftops!
Motivated sellers are not going to magically appear. You need to get out there and find them! Simply wishing and hoping is going to do nothing to bring you closer to your financial goals.
Hopefully these five strategies will help you find more motivated sellers, solve more problems, close more deals, and make more money in your business!
Have you tried any of these strategies? Let me know about it in the comments below!
Brandon Turner is the VP of Growth at BiggerPockets.com, the free real estate investing social network, and author of The Book on Investing in Real Estate with No (and Low) Money Down. He lives in Western Washington with his wife, dog, and three cats.