Motivated sellers are the key to all good real estate deals. Read this sentence again and impress it on your memory forever. Whenever you remember it, you will increase your potential profit, make better deals, put more cash in your pocket, and save valuable time.
One of the primary reasons for failure in real estate is trying to buy from unmotivated sellers. It's like trying to push a rope. It will absorb all your time and energy, and it will get you nowhere. Find the seller who really wants to sell, and you will buy a lot more houses at far better prices. It is the secret to great deals.
Motivation comes in all forms. Some of the most common are divorce, relocation, extensive repairs, pending foreclosure, elderly owner, lender owned properties, and so forth.
Locate the Good Deals First
The first thing you should do is let the world know you are in the house buying business. Are you ashamed of being an investor or are you shouting it to the world?
Don't rely on just one or two methods for getting the word out. I suggest you pick at least five ways to find houses and put all five to work simultaneously. The more you put yourself in the way of opportunity, the better your chances of getting what you want.
Get the seller to call you first. Why is that so important? They are always more motivated when they call you first. Do not waste time dealing with unmotivated sellers who are just testing the waters. Instead, do everything possible to get sellers to call you first.
The more lines you cast into the pond, the better chance of getting a bite. If you use at least several of the following methods, you will receive more calls from motivated sellers than you can handle. More importantly–they will be calling you first.
The easiest way to find motivated sellers is to run an ad in your local papers and let them call you. You don't need anything fancy to get calls. The ad I have used for years simply says, “We buy houses, fast cash, two-day closing, any condition, any price, call xxx-xxxx.”
Most of your calls will be worthless. But you only need one good call once in a while to make a good income. Don't be concerned about the competition in the paper. It amazes me how there can be eight or ten ads all saying the same thing, and yet we all get calls.
Most people will call only one or two ads before they quit. If your phone number is in their area or they like something about your ad, you'll get called. I like to use bold headlines and not crowd my ads. Practice will tell you what works best.
The other side of the coin is to call ads yourself. Don't think there are no good ads in the papers just because so many people read them. First, most investors only check a few ads before giving up. Second, your search will be much more effective if you know exactly what to look for.
For “subject to” deals, you should be looking for ads that say “no qualifying,” “assumption,” “take over payments” or something to this effect. For wholesale deals, look for ads that say things like “as is,” “make offer,” “estate sale,” “needs work,” “handyman special,” “motivated seller” and so forth.
Maximize your time and effectiveness by calling only those ads that indicate motivation on the seller's part.
The Least Expensive and Most Effective Ads
Business cards are your least expensive, most effective advertising. They cost between $20 and $100 per thousand, depending upon how fancy you get.
A lot of cards will be thrown out. Sorry, but that's real life. Some of them will be saved. And a few will generate a phone call right away. Here's the bonus question: How many deals do you need to close to pay for your box of business cards?
One single card is going to do it. The catch is, you never know which card. So don't be shy about giving out your cards to everyone and telling them what you do. Even someone who has absolutely no interest in buying or selling a house may know of others who are. Everyone is either a prospect or a potential source of referrals.
Avoid phrases like “Real Estate Investor.” That means nothing to motivated sellers. They are only interested in what you can do for them: I BUY HOUSES, CASH. Your business card should say something like, I BUY HOUSES, CASH, ANY CONDITION. Use your card as a billboard to telegraph your message. Make what you do crystal clear.
Hand them out everywhere. Leave them in restaurants, barber shops, stores, and offices. Put them in all your local bills when you pay them. If you do not need to order more business cards after three months, you are not getting the best use out of them. These methods of finding motivated sellers are just the tip of the iceberg. Next time, we'll explore a variety of additional ways to find the sellers who want to sell their house now.