Have you ever wondered where the best motivated seller leads are hiding? Look no further, as they are a lot closer than you may have initially thought.
As an investor, it is in your best interest to remain as efficient as possible in every action you carry out, and lead generation is no exception. It’s safe to say that lead generation is a numbers game; the more leads you acquire, the better chances you have of landing a wholesale deal. It is important to note, however, that there are varying degrees of lead generation, and not all leads are created equal. For what it’s worth, nothing is more coveted by investors than motivated sellers in real estate or those that have every intention of selling a property—even if it means losing out on a significant amount of capital in the near-term.
Motivated seller leads are individual homeowners who are in a hurry to rid themselves of a property for one reason or another. What’s more, their reason for selling actually works in favor of investors, as their asking price is typically contingent on the level of their motivation. Highly motivated sellers, or at least those that need to get rid of a property before it becomes a burden on their own financials, will have a hard time turning down a lower offer if they are presented with cash upfront. The concept is relatively simple, whereas the act of finding motivated seller leads is less so—unless you know where to look.
With a little direction, real estate lead generation is not as hard as you may think—you just need to know where to look. I maintain that the following sources of motivated seller leads are some of the best ways for investors to find their next deal.
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The key to running a truly successful real estate investing business is learning how to find homeowners who are more likely to sell than others. The motivation of a homeowner, after all, is what will most likely tip the scales in investors’ favor. That said, here are some of the best ways to find owners who are most likely motivated to not only sell but also sell for a discount:
As their name suggests, non-owner occupied landlords are those that own a home but don’t physically live in the respective property. That’s not to say the home is vacant, as it is entirely possible the owner of the house is renting it out. For the purposes of this article, however, it’s important to understand that the owner doesn’t live on site. If for nothing else, the individual on the mortgage has already made the decision not to live in the house; it’s not out of the realm of possibility to assume they would be willing to part with the property altogether. That said, some of the best motivated seller leads I have come across are none other than non-owner occupied landlords.
Non-owner occupied landlords aren’t always going to market their properties for sale, nor may they even realize they want to part ways with the home. It is entirely possible that a great deal of non-owner occupied landlords don’t even realize that they want to sell, which begs the question: How can investors turn these homeowners into motivated seller leads if their houses aren’t even on the market?
It should go without saying, but not every non-owner occupied landlord is a candidate to buy a home from. However, I maintain that these individuals are more motivated than the average homeowner to part ways with a property. So while they may not all turn out to be motivated seller leads, chances are you will have better odds closing a deal with a non-owner occupied landlord than someone that has lived in a subject property for 20 years.
I encourage anyone looking to acquire a home to mind due diligence and think outside of the box. Not all motivated seller leads will come from homeowners currently looking to sell. In fact, some of the best motivated seller leads I have come across are those that didn’t even realize they wanted to sell. Having said that, it’s up to you to find them. I recommend purchasing a list (which can very easily be purchased online) of non-owner occupied landlords in the area you intend to invest in. To be certain, you can even cross-reference property records with the records of your local municipality to determine the true owner of a property.
With list in hand, prioritize the non-owner occupied landlords that have owned the home for more than 15 years and direct your marketing efforts towards them. Anything closer to a decade of ownership means they still might have some attachment to the property, or perhaps they bought after the market collapsed and have managed to build up a great deal of equity. That’s not to say you won’t find non-owner occupied landlords willing to sell after just 10 years, but you will place the odds of finding better motivated seller leads if you extend your search criteria to a longer duration of ownership.
The longer they own a property without actually living in it, the more they may be willing to part with it. Think about it; they may be tired of acting as a landlord or they may simply want to capitalize on the equity that has returned to the market. You won’t ever really know until you try. That’s why I maintain that some of the best motivated seller leads out there are those that own a property but don’t live in it.
Motivated seller leads are in no way relegated solely to the likes of non-owner occupied landlords. While a great source of deals for investors, non-owner occupied landlords are but one option. In fact, there is another source for motivated seller leads that has the same upside— if not more so — as non-owner occupied landlords: what I like to call inherited and probable sellers.
In order to understand why I hold these motivated seller leads in such high regard, you must first understand where these particular homeowners are coming from. Probate, according to the Superior Court of California, “deals with transferring the property of someone who has died (decedent) to the heirs or beneficiaries” when a will doesn’t dictate as much. In other words, the court will bequeath the property of a deceased individual to the rightful heirs in the event a will was never drafted. Not surprisingly, probate owners aren’t even aware they will take ownership of a home until the moment the court passes judgment. For what it’s worth, that’s a lot of responsibility to throw on someone’s plate in a relatively short period of time. Inherited property owners, on the other hand, received a respective property through a will and are able to skip the probate process in court.
Whether inherited or probated, there is a higher probability that the resulting homeowners are less inclined to keep the property. It’s safe to assume most people won’t want to take on the added burden of a second home. That said, the owners that take control of a property through these means are a great source of motivated seller leads.
Not unlike non-owner occupied landlords, it is entirely possible for investors to acquire lists (at a price of course) of these owners. A simple Google search will reveal all the information you need to be put in contact with inherited and probate sellers. What’s more, the individual receiving the property may not have an emotional attachment to it, therefore making it disposable. At the very least, they will be more likely to listen to anyone making an offer. You would be surprised at how attractive a cash offer can become to those that just inherited a house they didn’t even know would be theirs just a few weeks beforehand.
Distressed property leads, as their names suggest, are leads that point to homeowners in some sort of financial duress. Whether they are months behind on payments, or at risk of falling into foreclosure, any homeowner that has failed to comply with their mortgage obligations may be considered to be in distress. Due, in large part, to their financial situation, distressed sellers happen to represent some of the greatest leads for today’s real estate investors. If for nothing else, money is a huge motivator. Those who are financially able to keep up with mortgage payments may be desperate to sell, oftentimes at a discount.
Distressed property leads may represent the single greatest leads for investors, which begs the question: Where can investors find them? Fortunately, the answer isn’t nearly as difficult as many would assume. In fact, there are several ways investors can find distressed sellers int heir own area:
The more options today’s investors have at their disposal to find motivated sellers, the more likely they are to acquire a deal with attractive profit margins. That said, here are a few more ways an investor may find motivated seller leads:
More often than not, impending purchases are contingent on a respective sale. Most buyers, for that matter, can’t possibly buy a new home without selling their old one. As a result, it’s safe to assume most buyers will currently be the process of selling their existing home. Likewise, if they are already looking for a new home, there’s a good chance they are in a hurry to sell their old one.
As their names suggest, “for sale by owner” listings represent homes that are currently for sale without the assistance of a Realtor or professional real estate agent. While some people are perfectly capable of selling homes without the help of a professional, there are those without the luxury of helpful experience. The absence of a real estate professional may enable investors to strike a deal that’s more in their favor.
Expired listings are nothing less than a burden for their respective owners—the longer a home is listed, the more it costs them. That said, any homeowner with a listing that has expired may become more desperate to sell, even if that means at a discount. In fact, the longer the listing has been expired, the more likely the owner will be to sell for less than the original asking price.
Craigslist has proven to be an invaluable tool for both buyers and sellers. The nature of the site connects buyers to sellers in just about every industry. That said, prospective buyers can filter their search results to make finding motivated sellers easier. Whether they look for keywords or photos of distressed homes, Craigslist is both simple and free to use when looking for motivated sellers.
Zillow has an immense database of homes for sale that can be filtered by areas. On top of that, there are subsequent filter options that can help investors find distressed homes. Try paying special considerations to photos, as unkempt homes tend to suggest distress. While an unkempt home is not necessarily indicative of a motivated home seller, it is a good place to start.
Facebook will help find motivated sellers but on a more personal level. While Facebook doesn’t offer the same filter functionality as Zillow or Craigslist, it still gives investors access to countless homeowners. Even more importantly, Facebook recently opened its own marketplace, which may be expanded to included homes, or serve a similar function as Craigslist.
Local attorneys are usually the first to know about the financial hardships of homeowners. Their services are often enlisted for bankruptcies, which means they are privy to motivated sellers before the homes are listed for sale. As a result, it is in the best interest of investors to network with local attorneys. The resulting relationships could turn into a deal without having to spend time looking for a house.
In the same way building relationships with attorneys is important, building relationships with inspectors can be rewarding. After all, inspectors are usually called in to assist in home sales, and they usually know about sales before homes are listed.
Motivated seller leads have the ability to turn a good investor into a great investor. If for nothing else, a hot lead is more efficient than chasing down any number of dead ends. When it comes down to it, motivated seller leads are an investor’s best friend; they represent the path of least resistance and the best chance of closing on a deal. In an industry as competitive as real estate investing, you would be hard-pressed to ask for much more.
No other lead generation tactic, at least that I am aware of, has become synonymous with more benefits to investors than non-owner occupied landlords and inherited/probated property owners. The next time you want to invest in a property, look no further than these motivated seller leads.