5 Low Cost Methods For Finding Motivated Sellers
By JD Esajian on July 8, 2016
Motivated sellers are the Holy Grail for real estate investors. What makes them so attractive is that they have a specific need and are ready to act in as short a timeframe as possible. This reduces the weeks of back and forth that can be frustrating and unproductive. Working with a motivated seller alone does not guarantee a deal but it usually produces an answer either way in a much shorter timeframe. In the past the best way to find these sellers was to engage in a large direct mail campaign aimed at homeowners in foreclosure or close to it. While this can still be an effective option there are other more cost effective alternatives. Here are five low cost methods for finding more motivated sellers.
- Bandit Signs. Sometimes the easiest methods are the ones that are often overlooked. For as simple as bandit signs are they can produce great results. The best part is that they are cost effective and self-sufficient. Bandit signs are the signs you see usually in busy intersections or during election seasons on front yards. You have probably passed a “we buy houses” bandit sign without even realizing it. The right sign in the right location can produce a few phone calls a week. The cost per sign makes these an inexpensive option that you can use over and over again. If you shop around you can get hundreds of signs for less than $100. Before exploring this option you need to consult with your town and see where you can place your signs. Many towns restrict usage in certain areas. You also need to take a few minutes to make sure you can get all of the information you want on your signs. A small sign with small letters can be useless. If people can’t read it from their car they are not going to call you.
- Vacant Houses. Every time you are in the car you should be looking for motivated sellers. One of the ways to find these sellers is by noticing distressed properties. These are the houses with overgrown lawns, scattered toys in the driveway or the general appearance of vacancy. If you are up for it you can knock on the door and look for the owner. If someone answers ask for the owner and engage in conversation. The odds are that the property is either a rental or completely vacant. You can try leaving your business card on the front door along with a note to call at their convenience. You can also try sending a letter to the property just in case someone stops by. A better option is to go to the tax assessors office and find out the address of the owner. Knowing their name and primary address you can send them a letter at home or attempt to reach out to them directly. Every time you drive by a vacant property you should write down the address and start your due diligence.
- Tax Lien Owners. Finding motivated sellers through tax lien auctions is something that anyone can do. Almost every town or city publishes a list of property owners who are delinquent on their property taxes. Once a homeowner is delinquent they have some time to pay these taxes before a lien is placed on the property. Once a lien is placed the town has the right to put the property up for auction. There is a redemption period that they owner can still pay the taxes but at that point they have most likely exhausted all of their options. If you can get to these homeowners early enough you may have the inside track to a potential deal. As soon as they are delinquent you should reach out to them to discuss their options. They may decide to try to find the money or refinance but if these aren’t options they may be willing to sell quickly. For a list of delinquent owners call the tax office and see when the tax cycle runs. About a month after the cycle ends a list of delinquent owners should be available.
- Birddogs. To find motivated sellers you should be willing to think outside the box. One of the ways to do this is by utilizing all of your resources. The next time you get your mail ask your carrier if they would be willing to pass along the address of any property that appears to be vacant on their route. You can offer to pay them per address or based on any deal that ends up closing. For whatever compensation you pay them it is worth it on your end. You don’t have to drive around looking for properties and you may even get an address or two that you would have never have seen from the street.
- Estate Attorneys. Another person you should establish a relationship with is a local estate attorney. An estate attorney handles the property typically after a death or divorce. Their goal is to watch after the best interest of their client. There are times when a quick, cash sale is the best option available. If you establish yourself as an honest, trustworthy investor the attorney will be more apt to recommend your name and business to their clients. Not every deal will fit with what they are trying to do but like anything else in real estate the more opportunities you have the more likely you are to convert.
Motivated sellers are more prevalent than you may realize. They will often not come right out and show their hand but they are out there. The more lead generation options you have going on the more likely one of them will produce a deal.