Real Estate Investing Blog

One of the most important things that you will do as a real estate investor involves making a connection with motivated sellers. Finding motivated sellers is going to be the most effective ways in which you can find effective deals and get the best prices possible when you buy properties.

Finding motivated sellers is essential for your success in real estate investing; of course, just knowing how to find them isn’t going to be enough - you are also going to want to be sure that you have effective tools for reaching motivated sellers when you find them.

When it comes to motivated sellers, you’re going to want to be sure that:

• You are able to focus on reaching those individuals who are likely to face foreclosure before they lose their homes
• You are able to connect with those individuals who want to unload a property quickly because of death or divorce or some other reason
• You are able to find those sellers who just want out of their situation

You’re also going to want to know that you are able to market your services - as a real estate investor, you may find that it’s a good idea to market what you do as a service; you’re going to want to be sure that when you do find motivated sellers, you know how to speak with them.

If finding motivated sellers is the key, you’ll find that communicating with those sellers is like finding the lock that the key opens.

The best way to be sure that, when you are getting involved in real estate investing, you are going to get the best possible deal is to know that you are finding and working with motivated sellers. If you want to be sure that you are able to purchase a property that you will be able to turn around quickly for a profit, for example, you are not going to get the best bargain on that property if the sellers are holding out for an offer that is near market value.

Instead, when you are investing in real estate, you are going to want to find those motivated sellers who are looking to get rid of a home as quickly as possible so that they are able to get out from under it. Rather than looking to just any property to invest in, you are going to want to be sure that you are looking at those homes where the owners are about to lose the home and want to salvage their credit (at least as much as possible). You are going to want to make sure that you are finding sellers who are motivated to liquidate the property to settle a divorce, to cover medical expenses or to meet some other financial obligations.

When you are working with the right real estate investment mentor, you are going to find that you are in a position in which you are able to learn where you should be looking, where you should be advertising to get motivated sellers to come to you and at what you can do to make sure that you are getting the best possible deal. If you do not know how to find motivated sellers, the best thing that you can do for your business is to look for the best possible advice.

Sometimes, the same news that is markedly bleak for those who are going to have to put their homes on the market is news that is fantastic for real estate investors - particularly those investors who understand the importance of finding motivated sellers.

Take the following for example:

(source)The glut of homes on the U.S. housing market worsened in the first quarter, according to government data released Monday. The number of vacant homes in the United States rose by 1 million in the past year to a record 18.6 million, the Commerce Department said. Of those 18.6 million vacant homes, a record 2.3 million were for sale at the end of the first quarter, pushing the vacancy rate for owner-occupied units to a record 2.9%. Meanwhile, a record 4.1 million vacant homes are for rent, with the rental vacancy rate rising to 10.1%. The percentage of homes occupied by owners was steady at 67.8% in the first quarter, matching the lowest percentage in five years.

Now, just because there is a glut of homes on the market that seem to be staying put isn’t the good news in and of itself; the good news is that, when even those homes that the owners have decided to rent out are vacant, the homeowners are going to be increasingly motivated to sell.

Imagine yourself in that position. If you had put a home on the market after finding a better place to live, wouldn’t you be anxious to sell? Moreover, if you were having some trouble selling the home and decided to rent it and the house remained vacant, wouldn’t you be an even more motivated seller?

One of the key principles of establishing wealth through real estate investment is simple: the more motivated the seller is, the better the price that you will get on the property. The better the bargain, the more wealth you will be able to generate over time.

When you’re committed to real estate investing as your course for generating wealth, your success is going to rely on one thing: finding great deals. When you want to be sure that you’re getting the best deals possible, you need to understand that motivated sellers are the key.

So, where can you look to find motivated sellers? Here are a few suggestions of the types of motivated sellers that are out there.

• Couples who are divorcing When divorce is looming on the horizon, there are plenty of couples who don’t want to be tied down by mutual investments. Therefore, they often are willing to sell at a great price.
• Couples with financial hardships. It’s unfortunate that there are cases in which people are desperate for a way to stay on top of their bills, and some real estate investors feel strange about approaching them. However, those who are facing serious financial hardships are often extremely motivated sellers.
• Frustrated investors. Frustrated investors who didn’t do enough research before starting to make investments often find themselves in a position where they need to unload the properties they snapped up and then couldn’t sell.
• Banks. Bank owned real estate is often one of the best ways to know that you’re getting a great deal. Contrary to what you might think, banks are in the business of making money not owning property.

The more motivated that sellers are, the more affordable properties are going to be. The better the price that you get, the better the deal is going to turn out overall. Finding motivated sellers is the key to your success.

When you’re looking at what it’s going to take to succeed in the real estate investment business, it’s important to take a look at those considerations that will help you to make the right property choices. Particularly when you hope to do your research quickly so that you can move on deals before they are snatched out from under you, there are some key points that you’ll want to focus on when you start talking with the seller.

It’s absolutely essential to determine that the seller is motivated, so one of the first questions that you should pose is this: why are you selling the house? The answer that you get will help you to determine how eager the seller is to sell; the more motivated the seller, the surer you can be that you’re getting a great deal.

Of course, the benefit of the deal will also be determined in part by the market value of the property - so it’s important to take into consideration what the property will be able to be sold for. The bigger the difference between the price you pay and the value of the home, the more that you’ll make on the sale.

Still, it’s a good idea to take into consideration whether or not the home is in need of repairs; how much work is going to need to be done on the property before it reaches its peak value? In part, this is where flippers make a lot of their money - knowing how to make essential repairs and to remodel at a bargain.

Those are the three primary considerations that you’re going to want to take a look at before investing in real estate, but just to round things out it’s a good idea to look at two more points. First, how much is still owed on the mortgage and, what’s the lowest offer the seller will accept for the property.

When you are able to look at the answers to all of these questions - and to compare them between one property and the next - it becomes a lot easier to make the right investment choices (and, of course, to succeed in real estate investing).

When you are making investments in real estate, one of the phrases that you’re going to hear over and over (and over) again is that your need to find motivated sellers. You’ve probably heard that enough times that I didn’t need to comment on it, but bear with me for a minute.

When you’re looking for motivated sellers, you’ve probably thought about looking for FSBOs that have been on the market for a while. You’ve probably thought about talking with banks to help you identify those homeowners who could lose their property. But your probably haven’t thought about this: finding those sellers whose listings have been turned down.

There are a number of sellers out there who are taking advantage of flat fee brokerages because they know that with the current market conditions, paying a real estate agent’s commission is going to cost too much. But here’s something that I found interesting:

(source)Many homeowners, he said, are asking him how to save on the seller side, but he has been turning down more homeowners because their homes are unlikely to move at the price they need to recoup their investment.

‘‘We’re not miracle workers,” Gill said. ‘‘The interest is there — we’re getting a steady stream of calls — but I can’t list their house if they can’t sell it. Unfortunately, a lot of folks don’t have the ability to sell their home and there’s nothing I, or any other broker, can do.”

If these sellers who are being turned down by the flat fee brokers are trying to make a short sale or simply to protect their credit even if they sell at a loss, doesn’t it seem as though they would be motivated?

In other words, if there is a flat fee realty service in your area, you just might find that you should be getting in touch with them. They may turn down sellers, but if they know that you’re interested in buying properties they may be able to pass along your card.

I remember when Richard & I began our real estate investing business – now seven years ago, one of the first seminars we attended was one exclusively on marketing. We learned twenty ways from Sunday how to do business cards, even more on bandit signs, thirty different newspaper ads, post cards, letters, flyers . . .. We were ready to go!

First of all we were both still at our full-time jobs so we opted for ‘newspaper ads’. Most of you know we live in Atlanta so our only logical option was the Atlanta Journal Constitution. MONEY WASTED! No responses that brought us anything that even resembled a motivated seller.

Next we decided to do the ‘work all week and then spend our weekends putting out signs’. The signs seemed reasonably priced, we felt good about the size, color, website, etc. AND we actually got phone calls from them. However, after the first 10 calls or so we then realized we needed to organize all our prospects. We then ‘thought the next important thing to do’ was to get a handle on which signs (street corners) produced the most calls so we could ‘target our marketing’.