If you want to succeed with real estate, the number one priority is for you to find motivated sellers, and lots of them.
If you can’t do this, the rest of this process isn’t even worth talking about because this whole game begins and ends with having a seller who is willing the play by your terms.
What Is A “Motivated Seller” Anyway?
In my mind, a “motivated seller” is a property owner who is willing to do at least one of the following things:
- Sell their property for a VERY low price (when I say low, I mean REALLY low. Think somewhere in the neighborhood of 10% – 30% of market value)
- Sell their property with VERY flexible terms (i.e. – we’re looking for a seller who will finance the property for you, require no money down, and charge 0% interest)
Obviously, these types of sellers will have to agree to a pretty ridiculous offer. They’ll have to sell their property almost entirely on your terms and in your interests. Things that, in theory – no sane person would ever be willing to do.
If you want to make your next real estate investment a “sure thing”, you need to be in the position where you have virtually nothing to lose and everything to gain. The seller on the other hand, needs to be in a position where they are willing to lose everything and walk away from their property with very little or nothing to show for it.
I know it sounds crazy. It might even sound impossible… but I’m going to explain to you exactly how I find these sellers on a regular basis and get them calling ME, asking me to buy their property for whatever price I feel like paying.
If you’re skeptical, I understand. I realize this may sound too good to be true. After all, who would ever agree to such outrageous terms like this? Are there really deals like this to be had out there? Are there actual property owners who will sell their property for next-to-nothing?
The answer is a resounding YES.
Step 1 – Getting The List
It all starts with your ability to find a targeted list of property owners. Let me reiterate, we’re not looking for just ANY property owners. We’re looking for people who are statistically more likely to sell their property.Here’s how it works:
Keep in mind that all of this information is of public record. You or I could literally look up any of these properties in a matter of minutes and find this kind of basic information.
As you can probably imagine, this data is used by many different people and companies to create bulk mailings. If you’ve ever gotten a piece of junk mail before, chances are – they found your name and information from this kind of information database that contains these public records.
Why Direct Mail Works
Most direct mail campaigns are not very effective. Why? Because a lot of direct mail marketers send out hundreds of thousands of mailers on a regular basis with very little targeting criteria. For most of these people, a 1% response rate is generally considered “successful” (and I consider it “pathetic”).
We are going to be much smarter. You see – the goal isn’t to have a massive number of recipients. The goal is to have quality recipients. If we want to get a higher response rate (and thereby, make our mail campaign more worthwhile), this will only happen by obtaining a quality list.
As mentioned in the video above, AgentPro247 allows us to pick out specific types of properties and owners on a number of different levels. By doing so, we can put together a direct mail campaign that will get a MUCH better response rate than 1%. On average, my response rates are usually in the 5% – 10% range (and even higher on occasion).
It is very important to have current information and the right recipients on your list. If you don’t apply any narrowing (or if you’re working with outdated information), you’ll end up wasting a lot of time and money.
With this in mind, I like to target my lists based on a few key characteristics:
- Property owners who live out of state
- People who live out of state tend to be much more disconnected and disengaged from their investment properties. Many of these people had to move away unexpectedly and for whatever reason, they just don’t care about their property. These people have a vested interest in liquidating as soon as possible.
- Property owners who don’t live at their property (absentee owners)
- For obvious reasons, people are much more likely to part with an investment property than they are with their personal residence. Don’t expect people to sell you the roof over their head for pennies on the dollar – it usually won’t happen.
- Property owners who have owned their property for 10 years or longer
- On occasion, I like to sort my lists with this criteria because properties that have been owned for a longer period of time have a much higher likelihood of being owned free and clear. When properties are owned free and clear, the owner has more equity to play with, which gives them more freedom to sell their property at a HUGE discount.
- Property owners who have delinquent taxes
- Many of these owners are at the end of their rope financially. They literally don’t have the time or money to wait for a higher offer. If they don’t sell the property to you, they will lose everything to tax foreclosure. Of course, you’ll have to take care of the taxes once you buy it – but these delinquencies will often times give you a lot of leverage to make a low-ball offer.
- Properties that are in the right price range
- If you’re not interested in buying a million dollar property, then don’t solicit to people who own these properties. It’s that simple. If you have the ability to screen out the properties that are clearly out of your price range to begin with, then do it! You’ll only be wasting postage if you mail to property owners that you never intend to purchase from.
As you can imagine, there are many other philosophies and methods with which you can sort your lists (and I’d encourage you to test out some of your own methods as you see fit), but these are the most common sorting methods that I’ve seen used throughout the industry.
Direct mail certainly isn’t free, but it works. There is no better way that I know of to reach a targeted audience in a short period of time. If you haven’t tried direct mail yet – I’d encourage you to give it a shot. You may be pleasantly surprised.
When you’re ready for me to take you through Step 2, you can click here.