There are several rather unusual ways that I like to use to locate motivated sellers. I’d like to share several of my favorites with you so you can find even more motivated sellers in a non-conventional way. This is absolutely the best time of the year to be locating motivated sellers since property tax bills have just gone out to owners in many states AND the holiday season is upon us. As you know one of my favorite techniques to locate highly motivated sellers is using direct mail and during the holiday season sellers are opening all of their mail since they are getting letters from friends they have not heard from in a year. Here are some of my other favorite albeit unusual techniques to find highly motivated sellers.
The first of these is to contact auction houses in your area and work with them to help you find leads on houses for sale. I’m talking about the auction you go to on Friday or Saturday night to buy “stuff”. Where do you think these auction houses get their merchandise? They get it from homeowners who need to get rid of a household full of items. One way to find these auction houses is to look in the yellow pages or google “Auctions” and find the ads that say “we consign estates”. These are going to be the ones you will want to work with. Many times an auction house will be contacted by an heir to sell items remaining in a property to settle an estate or to simply get rid of things remaining in the property after they inherit it. They may also be working with a widow or widower who wants to get rid of their excess furnishings, sell the home, and move into an assisted living facility or with a relative. The next item of business is to get the property sold as well. You can make a deal with the owner of the auction house to contact you when these situations arise, and they will give you the information about the sellers. If you offer a fair price and the auction house gets paid a commission, this is a good way to buy houses no one else knows about.
Another unique way to buy houses that no one thinks about is to contact local attorneys in your area who handle estate, probate, family, real estate and business law. Quite often they will have clients come to them with a probate situation, a divorce situation or a bankruptcy situation or other situation that they need handled. These clients need to sell a property quickly in order to liquidate assets no matter what condition the property is in. If you are a person of integrity and you do what you say you are going to do and offer a fair price, these attorneys will continue to contact you with potential deals. Interestingly enough, you will find that these attorneys talk to one another and you will find yourself getting referral business from other attorneys. This is one of the ways I use in my own business to bring in new leads on a regular basis.
Another way to find motivated sellers is to contact mortgage brokers who deal with private lenders. I have personally purchased several foreclosure properties this way. A private lender would just as soon sell a property they have had to foreclose on to you as they would rehab it themselves or sell it conventionally. This is an excellent way for you to get leads coming into your business, especially if you are just getting started. Very often the same private lender who had to foreclose will finance the same property for you if they see that you are going to get it sold and get them paid off. In addition, this is a good way for you to bring new private lenders into your own business. This is another technique that most of your competitors just don’t think about.
The fourth unique way I use to find motivated sellers is to check various types of ads in the newspapers and online. For example, you can check the marriage notices to find out who is getting married. If you see older couples, you can pretty much assume that they both already own homes and want to sell one or both to buy a home of their own. You can also check the death notices. When someone dies, there may be an heir who now has a house they need to sell. Tread lightly when following up on these leads, you don’t want to offend a potential seller. Send them a generic type of letter explaining that you are interested in buying some houses in their neighborhood. DO NOT refer to the fact that you know the person has died. You can also watch the paper for public auctions, bank foreclosures, and divorce filings. In divorce cases, you will have situations arise where neither spouse wants the property; therefore they are anxious to sell. Or they need to sell in order to liquidate assets.
Another way I like to locate potential deals is to locate vacant houses. I simply drive around and look for them whenever I am out driving somewhere. I will tell you, the more difficult it is to find the owner of these vacant houses, the better a deal you are likely to make. These houses are sitting empty for a reason. It may be a divorce situation where both parties just walked away, or an estate, or perhaps a pre-foreclosure. These are all good lead possibilities and vacant houses are some of the easiest potential leads to locate. In my personal business I use a skip trace service to find the owners of these vacant houses.
Another unconventional way to find a bargain is to make a friend of someone who owns a junk or disposal service. These folks are an excellent source of leads for you. Think about it. Who do people call when they have just inherited a house loaded with junk? Or maybe a widow or widower who needs to have the attic or basement cleaned out? In these scenarios the junk hauler is often the first person to be aware that a sale of the property is imminent based on their conversation with the owner. I will offer the hauler money for the lead and another fee if I actually purchase the property. This keeps him very interested in finding more properties for me to buy. And, once again these are leads your competition knows nothing about.
Speaking of unconventional ways to find deals, how about working with the owners of storage units? Think about it, if someone is putting things in storage, most likely it’s because they are moving. The owner or office manager of the storage unit is going to know it before anyone else and this is a very good source of leads for you. In addition, inside the offices of storage units there is usually a public board where you can post your business cards or a flyer with pull-tabs. When the person comes in to pay their bill, they will see your information. We have purchased properties using this very strategy.
Another great way to find excellent leads is by going to estate sales and yard sales. I know many of you like to do this on the weekend anyway, so here’s a great opportunity to mix business with pleasure. When you arrive at one of these sales, ask the person running it why they are selling their stuff. It’s that simple. I once bought a house where the owners were trying to sell enough “stuff” to make up a past due mortgage payment and they were in pre-foreclosure. If you see a sign that says “everything must go” this is also a pretty good indicator that they might be selling the house as well. Sometimes in estate situations you will see a sign that says “estate sale”, another good indicator that the home might be for sale. If they don’t want to talk to you just then, leave your business card with them and also try to get a phone number to contact them later as well. These sales can be a very good source of leads for you and another idea that your competitors are simply not thinking of.
And last, but certainly not least are your tenants. What an incredible source of leads for you if you are a landlord. We have a tenant referral program where we offer our tenants a credit of one hundred dollars toward the following month’s rent if they give us a lead and we buy the property. We have purchased multiple houses on the same street using this technique. Your tenants are hearing about situations while talking to their neighbors that you would never know about otherwise. When the tenant knows they can make money from it, they will refer these people to you.
We also put signs in the yard of every rental property that we own which helps our tenants start a conversation with a potential seller. They will give the potential seller our contact information as well as getting their information for us. We have some tenants who are fairly greedy and send us lots of potential leads.
As a real estate investor, you always want to be finding new ways to locate properties no one else knows about, and to have between three and five marketing strategies in place at all times.