As in any business, the success of any real estate investing business is locating deals that can make you a profit. These deals mainly come from motivated sellers, or home owners who really need to sell.
Such motivated sellers are driven by circumstances beyond their control, and sometime they can lose the house if they do not sell. Such circumstances include
1) Foreclosure
2) Bankruptcy
3) Divorce
4) People with liens
5) Burned landlords with defaulting tenants
6) Job transfer – hence they own more than one home
7) Expired listings – homes that just don’t sell
Inherited property (and sometimes debt)
9) Property that needs repair, so is not marketable
And so on..
The key to locating motivated sellers is locating people in trouble who own real estate. Identifying sources of these leads will give you an almost unlimited number of leads that could become profitable deals.
There are several sources of such leads that exist in most places:
1) Subscription newsletters
In my surrounding counties there are subscription newsletters that list every record in the local county court system. Even though these may not exist in your local market, they are valuable sources of good leads.
I check people in bankruptcy, divorce, liens, probates, etc, then check if they own real estate. If they do, they get into my mailing list
2) County records
From most counties, you can get information such as filed notice of default, foreclosure notices, probate notices, etc. These are valuable sources of leads for your real estate investing business
3) MLS listings
People trying to sell their houses for a long time unsuccessfully quickly become motivated sellers. These expired listings can be valuable source of leads for your real estate investing business
4) Burned landlords
Landlords filing for eviction in the local courthouses are fed up with their tenants and properties, and may be looking to sell as motivated sellers
5) Compiled leads
Even though these might be over-shopped, you may find people that compile lists such a foreclosures, bankruptcies, etc for sale. Sometimes these can yield good leads for your real estate investing business
6) Absent home owners
People that own property, but their mailing address is different from the property address means they have more than one home. It’s likely these can be motivated sellers for your real estate investing business
Once you have identified the best leads for your real estate investing business, the next step is to send them marketing mail pieces whether post cards of letters.
Preferably, send them more than one mail piece spaced maybe 30 days apart. This will drastically increase response rate.
Always make sure that you provide a web address for your real estate investing website as well as a phone number. Your website should take the role of convincing them that you are the best buyer for their property and pre-screen and pre-negotiate the deal for you.
If they call instead, make sure you have a scripted series of pre-screening questions that will tell you if it is a deal or not quickly without wasting time.
simon macharia buys most of his houses directly from motivated sellers. his real estate investing website pre-screens and pre-negotiates with motivated sellers, so it takes just a few minutes to tell if a deal can make money or not.
