Despite all of the talk and writing about how tight the real estate market is, there are still great deals available. Six months’ worth of inventory is typically considered a balanced market (favoring neither the buyer nor the seller). According to Freddie Mac, as of November 2016, the national inventory of houses for sale was running at close to a 5.5 month supply – slightly favoring the seller. For investors, how to find a seller now, begins and ends with finding motivated sellers willing to sell at discount prices and/or helping with financing.
Real estate brokers are great most of the time but for investors they don’t always make sense when it comes to how to find a seller now. What I’m referring to are seriously discounted houses. Not only does the traditional 6 percent commission become an issue but many of these properties have no appeal to the retail market that brokers serve.
Many Ways of How to Find Sellers Now
How to find a seller now typically includes houses involved with divorces, death of a relative, job transfers, uninsured damaged houses, serious financial distress, etc. Some investors feel guilty for “taking advantage” of people in these situations but you shouldn’t. The fact is, they need to sell – you are actually helping these people!
You can find these properties yourself or work with an experienced wholesaler that knows how to find a seller now. Finding deeply discounted houses isn’t always easy but it can be done when you know where and how to look for them.
Consider someone from out of state that inherits a dilapidated house that an elderly relative wasn’t able to maintain. The house has little or no appeal on the retail market. Real estate brokers that are building or maintaining a brand don’t want to show these houses to buyers. The seller just wants to get rid of it so they aren’t responsible for property taxes, insurance, and related costs. These houses naturally gravitate to the discount market.
When you know how to find a seller now, it will often result in buying the house at a 40 percent discount based on the local retail market. Of course, every deal is unique but this should be your goal. Some of these houses will be almost turnkey. Houses that you can immediately move a renter into or offer to sell as a lease option. Others will be in bad repair and you’ll need to decide how extensive of repairs you have to make to turn a profit.
Many Ways of How to Find Sellers Now
There are many ways to find motivated sellers but one highly effective and often overlooked method is with the old fashion bandit sign. Place these in neighborhoods where you are interested in investing and you will receive telephone calls.
Another key method of how to find a seller now are the classified ads and craigslist. In the classifieds, don’t bother going through the ads with color photos. Instead, go straight to the small print ads. You’re looking for ads that included phrases like “fix-up”, “must sell”, “needs work”, “vacant”, and of course “motivated seller”. While in the classifieds, don’t hesitate looking in the rental section. Disgruntled landlords will often consider selling when they are sitting on a vacancy for the third time this year.
However, don’t just scour the ads looking for properties. Place your own ads looking for properties on craigslist and with classified ad papers like Pennysaver, Thrifty Nickel, Greensheet, etc. You can use the same headline that goes on your bandit signs – “We Buy Houses Fast”.
The list of ways of how to find a seller now is long. Here is an abbreviated version:
- Drive neighborhoods looking for vacant houses and FSBOs.
- Look for utility meters that have been tagged as disconnected.
- Foreclosure notices in the legal section of newspapers.
- Those with delinquent property taxes (look for tax lien auctions).
- Network with professionals – real estate attorneys, accountants, estate attorneys, etc.
- Magnetic signs on the back of your car – “We Buy Houses Fast”.
- Offer the mail carrier a small finder’s fee (and others on a regular neighborhood route).
- Doorknob hangers.
- Real estate investment clubs.
The list of methods of how to find a seller now goes on and on. Included in this abbreviated list are very low cost and no cost methods.
How to Find a Seller Now and Close the Deal
It’s not only about how to find a seller now. It’s also about how to get the deal closed once you do find an investment grade house. A well-located house in reasonable condition and priced below market will sell fast. In some markets, these houses are selling the same day they go on the market. You need to be ready to make a decision quickly when the opportunity presents itself. You need to know what you want and at what price point. Then you need to be prepared to pull the trigger on the spot.
If you want to be a little adventurous about how to find a seller now, you can expand outside of your local area. The internet makes it very easy to find discount sellers all across the country and even across the world. You need to be cognizant that investing outside of your local area will almost certainly require that you hire a property manager in the local area. It’s an added expense but not always a bad decision. There may be better investment opportunities outside of your local area. If you’re not in a major metropolitan area, you probably have few or no deep discount opportunities.
While I understand that many investors prefer long-term cash flowing rental properties, my preferred investment strategy remains lease options. These can eliminate your need for a long distance property manager because the tenants act more like owners and you won’t be called late on a Sunday afternoon to fix a broken hot water tank or unplug a toilet.
By Wendy Patton
For more than 30 years, I’ve used the Sandwich Lease Options System to earn myself and my students millions of dollars. From my experience, I know there is plenty of room and opportunity in the real estate investment market for everyone wanting to participate to find profitable deals. It’s because of that fact and my personal success that I share the Sandwich Lease Option System with others.
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