finding off-market deals & motivated sellers

Finding Off-Market Deals& Motivated Sellers

connectedinvestors.com: the real estate investors marketplace and community

connectedinvestors.com: the real estate investors marketplace and community1

There are a lot of properties out there for sale but savvy investors know that some of the best buys on investment real estate aren’t listed by a real estate agent. The best deals are the off-market, motivated seller properties that have to be discovered – and it takes diligence, ambition and a hunger for the big payoff.

It’s not impossible to get good deals on listed properties, too –but there’s a whole host of things getting in the way of the reallyGREAT deal. Instead, when you focus your efforts on �nding off market properties...

• There’s less Competition – when you’re looking for off market deals, your competition is limited to other investors who may be using the same deal �nding strategies as you. When you use the advanced deal �nding strategies we’ve shared here, you can keep great deals coming across your desk and cherry pick only the best.


• There’s no middleman. Listed properties – especially the good deals, have lots more moving parts – in essence, too many people in the middle of the acquisition process. There’s the seller, the listing agent, the buying agent and most likely their staff members. Too many cooks in the kitchen – but when you’re focused on off market deals, it’s you and seller. Making the effort to �nd off market deals pays off with even better back end pro�ts.

• When there’s too much competition and too many cooks in the kitchen, you lose �exibility to negotiate. And one of your biggest advantages in acquiring great deals on investment real estate is the ability to be nimble and negotiate your deals to a win-win outcome – whether it’s price or terms or even better -- both!

Without a doubt, the most successful people in the business work to create their own deal �nding pipeline. They use multiple strategies - their targets are those high margin, off-market properties that can consistently produce deal after deal – whether the end goal is wholesaling, �x and �ip or buy and hold.


RESOURCES:No matter which strategies you use, you need the basics:

• A Mobile phone

• Internet Access

• Business Cards – while we’re on the subject of business cards, when you are focused on buying houses, you need a card that clearly states that! A quick internet search will get you some very good examples of “We buy houses” type cards. Once you’ve determined a design, there are great online sources where you can easily design and order affordable cards.

For some of the strategies, you’ll need more resources to get your deal pipeline going.

• Marketing materials – you may need �yers, postcards for mailing,

direct mail letters, and mailing lists. We go into detail with each strategy, so as you determine YOUR best approach, you’ll know what you need to make it happen.

• A team – whether you’ve got bird dogs working with you, bandit

signs being placed, or a real estate broker scouting for deals, it pays to build a team to help you keep deals coming in.

STEPS TO SUCCESS:The great thing about off market deals is that there are so many different ways to �nd them. Sure, the MLS may be “easy” and you may �nd a good deal every now and then, but it won’t get you consistent results. So, getting to the great deals simply means you’re going to get focused and create your own deal pipeline. You’re basically using your determination, skill and knowledge to create your own personal “for sale by owner” buying opportunities. Depending your personal and �nancial goals and your resources, you can use as many or as little of the deal �nding strategies we’ve outlined here and covered in detail in other segments.

Before we start taking a look at all of the different ways to �nd great REI deals, a couple points are critical. The person who consistently �nds great deals can be even more successful than the person with A+ credit or those who can’t successfully market for quality leads. That said, you’ve undoubtedly heard that the number one rule of real estate is location.

Not so for the successful real estate investor. The number one rule of investment real estate is motivation. Not your motivation - though that’s important - it’s the motivation of the seller that underpins some of thebest deals in real estate.



There are a lot of reasons that a seller might be motivated – too many repairs, bad tenants, pending foreclosure, relocation, divorce, inheritance and many, many more. So �nding properties whose owner is motivated to sell is the key.

So other than seeing a “for sale by owner” sign stuck in the yard, how do you �nd these off-market, motivated seller deals? Not every home that can be purchased will have a sign – but there a lots of ways to �nd these hidden gems. Create your own “for sale by owner” opportunities and you’ll have a winning formula for taking down great deals.


HOW TO:

One of the most cost effective ways to �nd off market deals is through your personal network – and the networks of those you know. In the Networking segment, we’ve outlined some great information on the subject – and as you get the word out that you are buying houses, you’ll be surprised at how many leads you can generate by simply purposefully working your network for off market deals. Whether it’s the mail carrier, your banker, your professional group or the pizza delivery guy – you can engage your network in building and maintaining your deal pipeline.


As you are engaging your network, you don’t want to exclude real estate agents – while they traditionally list and sell “typical” properties, there are also agents who specialize in certain segments of the real estate marketplace. Some focus on foreclosures and the really ambitious agents take properties not yet foreclosed on, whose value is less than the mortgage owed and sell them as “Short Sales.” In essence, the bank will (in best case scenarios) accept an offer that is “short” of the mortgage payoff. For the real estate investor, short sale listings can give you an advantage. Most home buyers cannot deal with the uncertainty of when or if the bank will accept their offer. As an investor, you can make short sale offers without this overriding concern. We’ve taken a look at using Short Sale acquisitions – check it out to see if it’s a strategy that could work for you and your end game.


Another simple, though not as cost effective way to �nd deals is “Driving for Dollars.” Maybe you have a target area where you’d like to �nd deals. Make a point to drive it – looking for those homes that have the potential to be good deals. If you’re not sure about what a potentially good deal looks like, study the segment on Driving for Dollars. It’s covered there. And in the course of your normal commuting around your town, take a side street every now and then and scout for those off-market deals. Explore the area, get out and talk to people, share business cards and �yers. People are often happy to talk to you when you tell them you want to buy that ugly run down house that’s a blight on their neighborhood. Since driving for dollars is something that’s easy to do and can happen just about any time that you’re out and about, be sure to take a look at details we’ve outlined on being really effective at driving for dollars.


While we’re on the subject of driving an area looking for deals, you’ll want to consider using “Bird Dogs” to help you �nd great deals. Bird dogs are those people you put to work intentionally scouting areas for you. Since you can’t be everywhere all of the time, bird dogs can expand your reach and keep leads coming your way. Setting up a couple bird dogs to work with you is a simple process – but deserves to set up properly so that your bird dogs keep bringing deals your way. We’ve dedicated an entire segment to bird dogs because they’ve been proven to work. If you think adding bird dogs to your deal �nding strategies can work for you, be sure to get the details in the segment, “Using Bird Dogs to Find Deals.”

You may want to also consider combining your Bird Dogging with Bandit Signs. Bandit signs are highly effective at getting a lot of leads. A word of caution however, it’s more dif�cult to control the quality of leads with bandit signs. Quantity – not a problems, but since your bandit signs will attract callers of all kinds, be prepared to take lots of calls on leads that may not be what you are looking for. But there are a lot of ways to make sure you get better leads – whether it’s timing, location or more. Be sure to check out the segment we’ve presented on the effective use of Bandit signs.


With technology, you can also identify good sources of motivated sellers. Craigslist can be an incredible resource for �nding off market deals. In one of our segments, you’ll �nd step by step guidelines on searching Craigslist as well as strategies for marketing yourself through ads to get sellers calling you. You can also �nd deals through zillow.com and forsalebyowner.com. The key to effectively using these sites is to only contact sellers who have a couple key characteristics. There’s typically no real estate agent involved, the property has equity and the seller has some sort of motivation. Think about combining technology with direct mail and it’s like turning on a faucet that �ows with good quality leads.


Notes

Let’s talk more about Direct Mail. It is one of the most effective ways to reach motivated sellers. There are many, many ways to identify and market to motivated sellers. And even though it’s not cheapest route to take, you WILL get results. You can’t mail to everyone, so who makes a good candidate to receive your mailing? How about properties that have been inherited? What about the ubiquitous foreclosures? Mailing lists are available or you can check your county records and make your own list. What about absentee owners? They often get tired of trying to manage a property that’s not in their home city. Often you can �nd this information in your area’s tax records – or it’s even easier to buy a mailing list. Burned out landlords can also be a great source. There are a lot of accidental landlords out there too. Checking the eviction records in your city can help you �nd potentially motivated landlords ready to dump that headache of a house. If you have particular areas where you want to buy houses, consider “farming” those areas. You can get mailing lists for the target areas and pare your list down to only those with equity. We go into detail on making the most of direct mail in our segment dedicated to the topic.

As you generate good quality leads, you may want to also consider door knocking. You can walk an area; talk with neighbors or just cold call any number of potential homes. You can also go door knocking after you’ve identi�ed potential addresses using direct mail, driving for dollars, bandit signs or even your online search results. And when you do, be prepared to talk! You will meet new people and you have to be ready to talk about yourself and your interest in buying houses. It’s also a great opportunity to place �yers and share your business card.


ACTION STEPS COMPLETED:As you move forward in developing your deal �nding methods, studyeach carefully. Map out a plan for your acquisitions. What kinds of deals do you want? Are you looking to wholesale properties? Fix and Flip?Or is Buying and Holding your game? Take into consideration what resources you’ll need. What methods will work best in your target acquisition area and for your exit strategy? Who can you enlist to help you bringing in good quality leads? A well executed plan can kick start your deals and keep them coming.

Great deals are being made every single day – and while you may �nd it hard to believe, you can buy houses for pennies on the dollar. The key is to know how to make it happen and then get busy doing it!

Not every house that can be bought will have that “for sale by owner” sign – and that’s okay. Because those without that sign in the yard will have very little competition. We’ve detailed different methods that we know work - it’s up to you to determine which deal �nding methods will work for you to keep your deal pipeline full and quality leads coming your way.



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finding off-market deals & motivated sellers

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