The 4 Best Ways to Find Motivated Sellers (That Your Competition Isn't Doing)
The real estate market has heated up, and the competition is greater than ever before if you’re a real estate wholesaler out there looking for motivated sellers. The days of sending yellow letters to a big list of absentee owners and getting your phone ringing off the hook is a thing of the past.
If you send out that type of mailer today, you’ll probably generate quite a few calls. But, more than likely it will be from property owners that are sick and tired of getting “We Buy Houses” letters from real estate wholesalers, and they’ll just call to cuss you out (Not Fun).
The secret to finding motivated sellers in today’s market requires finding a niche and doing a little bit of work. For those willing to do it, the payoff is well worth it!
Below is the 4 best ways we’ve identified to find motivated sellers in today’s highly completive investment real estate market.
Driving for Dollars (the strategical way) we’ve all heard of driving for dollars but everyone seems to have a different way of doing it. Most drive neighborhoods, and write down the addresses of vacant houses. Then they go home and hop on the computer and start looking for the owners so they can mail them the same ole marketing that everyone else is sending them. You might as well just go back to mailing to your overused absentee owners list.
So what is the strategic way you ask? Get a list of vacant properties that DO NOT have a tax billing address filed with the county. If there is no tax billing address on file it means that they aren’t getting blasted with marketing from other wholesalers.
You can run a list of vacant houses by using the vacant house data feed. Just make sure to select properties that have the vacant property address also listed as the tax billing address. Once you have your list its time start driving by properties. We strongly suggest an app like Road Warrior Route Planner to plan your driving route. (It will save you a great deal of time and gas).
Once your route is planned it’s time to start driving by the houses one at a time and verify they are vacant. When you’ve determined nobody is living in a home tape an envelope to the door that say, “Attention Homeowner.” Place a letter inside the envelope expressing your interest in buying the home. If you don’t already have one check out our Driving for Dollars letter here.
Keep driving and posting notes until your phone starts ringing and you get a house under contract, and then keep doing it!!! When you get to busy to do it hire someone to do it for you.
We’ve done tons of deals like this and in our market NOBODY else is doing it.
Code Violation Leads are also on our list of great motivated seller leads because again most other wholesalers aren’t doing it. If you walk into any city hall, you’ll most likely be met with resistance when asking for a list of houses with code violations and that’s precisely why most other wholesalers give up.
Homes are tagged with violations from local municipalities for being unsafe, open to the public, or for a badly leaking roof. Code violations can also be for minor issues such as high grass, un-shoveled snow, excessive trash in the yard, or even an unregistered car sitting in the driveway.
Regardless of the infraction, it creates an uncomfortable situation for the homeowner. The code violation must be addressed or the homeowner will face a judge in court and receive a fine.
Code violations on a house can be a great resource for finding motivated sellers. You can often track down the owners and make them an offer to buy their house. In most cases, the owners of the home are not intentionally neglecting their home, but simply cannot afford to keep up with the necessary repairs to keep it in safe, operational condition.
We’ve found the easiest way to get the city to provide you a list of properties with code violations is to file a FOIA Request Form (Freedom of Information Act).
Since the information is public record the city must reply to the FOIA request within 5 working days. An extension of an additional 10 days is allowed under the statute, if the request requires the City to search for, collect, examine, or review a voluminous amount of separate and distinct public records, or to collect the public records from numerous offices, facilities or establishments.
FOIA responses and information are freely available (within set guidelines) but they are not free to obtain; usually, you must pay for the costs of finding, processing, copying and mailing the requested material. The costs of locating and reproducing documents will vary depending on the type and number of documents requested. If the charge is expected to exceed $50, the City will notify you before proceeding to fill your request.
So as you can see it takes a little knowledge and effort to work the code violation niche but it’s something that your competition probably isn’t doing. Are you ready to try your hand at marketing to this real estate niche? Feel free to use our sample code violation FOIA Form.
Probate Leads can be one of the best leads if you’re persistent and know how to work them properly. The first mistake most wholesalers make when they’re marketing to probate leads is worrying about “how fresh” the lead is… The truth is with probate leads newer doesn’t mean better.
After the death of a homeowner there of course is a grieving process the family goes through. They have to clean out the house and usually there is a probate court process. All this takes time and usually its 6+ months before they’re ready to sell. On the other hand 80% of all probate houses sell within 18 months of the homeowners death, no other type of lead comes even close to that conversion rate.
As far as competition in the probate lead niche goes let me give you this very real example. A couple years ago we had a death in the family and after his passing we received a total of 1 letter from a property investor about buying the property. And you want to know how many times he followed up with us? ZERO!
We received one letter and never heard from him again. So if you want to go after one of the highest converting wholesale real estate leads with practically no competition whatsoever try real estate probate leads! If you want to check out a great probate training course check out the Priority Probate System (only available by special invitation).
Virtual Wholesaling brings on thoughts of picking a city somewhere far away and trying to wholesale properties from your laptop using the same marketing techniques of sending out letters, building your buyers list and trying to put together a deal and to make it even more complicated it’s in a real estate market you know nothing about.
Well did you realize you can use virtual wholesaling to find more inventory to send your local buyers?
Other wholesalers in your market are spending thousands of dollars and a lot of man hours finding motivated sellers, looking at houses and negotiating deals. So do yourself a favor and learn how to be a virtual wholesaler and tap into other wholesaler’s inventory so you can do more deals.
We personally incorporate the 1o Hour Wholesaler System into our business to help us source more below market properties to send to our list of cash buyers. If you want to learn the 10 Hour Wholesaler skills check it out here.
The best way to succeed in business is to do something different and stop following the pack. If you’re ready to find a good source of untapped motivated sellers try one of the 4 methods above, you’ll be glad you did!
Wholesaling Real Estate is what we're all about at The Wholesalers Toolbox, so it would be appropriate in our first blog post to explain what "wholesaling houses" means. Often referred to as "flipping houses" or "flipping contracts," wholesaling is simply putting a house under contract and immediately assigning that purchase contract to another buyer (typically another real estate investor). Wholesalers do not repair, fix up, or renovate the house in any way, shape, or form.
Wholesalers search for houses they can buy cheaper than other properties in the area because the house is in need of moderate to major repairs (often referred to as a distressed property). Sometimes the owner of the property needs to sell quickly due to divorce, death, relocation, financial problems or some other reason (this is called a motivated seller).
One crucial trait of a wholesaler is being a great negotiator! Since a wholesaler does not do any repairs to the property, the only way they profit is from the "spread" on the deal. In other words, they have to buy the property well below market value so they can resell to another investor at a price that's still attractive to that investor.
Just as important as negotiating, a good real estate wholesaler will be a relentless marketer. Successful methods of marketing usually include driving neighborhoods looking for distressed properties (driving for dollars), direct mail, bandit signs, websites, online ads and any other creative method of finding the motivated owner of a distressed property.
The awesome thing about wholesaling houses is anyone can do it. You don't need any of your own money, or even good credit because you are never going to own the property. All you need to do is educate yourself on the wholesaling process, have access to the right tools, and develop the skills necessary to be successful.
In future posts we'll discuss the steps of real estate wholesaling in greater detail, so keep watching! Until then, if you'd like us to blog about a specific wholesaling topic, just contact us and let us know.