When investing in real estate, you want to focus your efforts on motivated sellers. This is true especially if you are just starting out. Dealing with motivated sellers makes the process go even faster, which means cash in your pocket sooner rather than later.
Motivated sellers are people who MUST sell their homes. So…what motivates a seller to have to sell his home? Financial distress for one. Maybe he is behind on payments. Maybe he is facing foreclosure. Maybe even bankruptcy. Maybe he is facing a huge medical bill. Or a divorce settlement is looming on the horizon.
Positive reasons can force the need for a quick sale. A job relocation and not wanting to deal with a vacant house, let alone rent it out and have the value plunge. Getting married and having no need for two houses.
You may think you are taking advantage of these homeowners. Actually, you are doing them a favor. Think what happens if the homeowner does not make the sale. He could be foreclosed upon, or worse, forced into bankruptcy. Or an empty house could be destroyed by vandals. Renters could wreak havoc on the value of the house.
It's easy to see, then, that these sellers need you. You are, in fact, a savior of sorts.
O.K., Now How Do You Find These Motivated Sellers?
Here's Some Tips:
- Build a website, or have one built for you, announcing that you buy houses. Not a techie? Then have someone from www.elance.com build one for you.
- Run classified ads in your local newspaper. Place your classifieds in dailies, weeklies, even free newspapers. Hint: advertorials(looks like editorial copy; reads like an ad; purports to educate but is really an ad)
- Set up bandit signs, those little signs on stakes and phone poles, announcing that you buy houses for cash, fast. Warning: Don't get carried away creating these until you find out they are legal in your area. If they are not, you can always place them after 5:00 P.M. Friday evening through Sunday evening, because the sign police are not out and about then.
- Put signs on your car. You are now a rolling billboard. You'd be surprised how many people will approach you when you are parked somewhere.
- A bit more expensive, but take out a Yellow Pages ad. Hint: (use the advertorial approach to stand out from competitors).
- On line, go to classified ad sites, especially free ones, like www.Craigslist.org
- Once you get going, and can afford it, going the direct mail route can be quite profitable. Mail to people within a zip code, (shotgun marketing) or get a list of particular people, such as those in foreclosure, (targeted marketing).
The bottom line is you can't sit around waiting for deals to come to you; you must go out and find them and/or do things to get people to call you. 90% of sellers are not motivated, so be patient and be willing to weed through a lot of un-motivated sellers before you get that one that is dying to sell his home for cheap.