Locating fruitful real estate contracts is a skill that requires patience, dedication, and time to learn. Similar to any business trade, real estate investment is driven by customers. The customer that you most want to find is the one that is highly motivated to push their properties at values below the property’s actual market worth. Discovering such galvanized sellers demands utilizing extensive marketing, advertising, salesmanship, and searching.
The primary dilemma that inexperienced investors have to tackle with is locating bargain properties. Many new investors spend several months or weeks scrupulously searching for bargain deals and then give up from frustration with failure. They fail to realize that this task is a difficult one very similar to a door-to-door salesman uncovering his very first customer. It requires a great deal of persistence, hard work, and dedication. But once you break through the ice, things will gradually ease up.
So what exactly is a motivated seller? He or she is an individual compelled to offer his or her property at a discounted value due to situations beyond their control. These situations can be anything from a job transfer to a general lack of concern, divorce, time constraints, unwillingness to deal with repairs, death of a loved one, financial problems or even just pure and simple frustration with the landlord. They are essentially people that are overwhelmed with personal and emotional issues, and therefore they are quite easy to take advantage of. It sounds wrong but it really isn’t, trust me.
To locate sellers, primarily motivated sellers, you can use a method known as “farming”. This involves choosing a specific neighborhood and directing your marketing activity within that portion of town for awhile, perhaps a couple weeks. I would recommend starting with your own neighborhood or one close by, especially if it is composed of mainly middle class and upper middle class inhabitants. Start off by cruising the neighborhood and making an analysis of the types of homes it contains, as well as the average prices for each residence. The goal of this investigation is to form a preliminary evaluation of the typical home within your target area. This will help in your future bargain hunting. Furthermore, if somebody from that neighborhood calls you up, you will have a better chance of being able to recognize their property address, as well as conjuring up an image in your head of what it looks like.
While patiently cruising your neighborhood streets, pay especially close attention to the physical features of each particular property. Also keep an eye out for notably unsightly properties that appear vacant. Be careful to not get arrested in this endeavor though! Signs of a vacant property include boarded up windows, newspapers lying around on the driveway, piles of garbage and uncollected mail, as well as overgrown uncut grass. If you are unsure whether the property is empty, feel free to approach the front door and give it a knock. If your knock is answered by an owner, kindly ask if they want to sell their property. If they say no, immediately turn on your salesman engine and start to try to spark the buyer’s interest with a good bargain deal. On the other hand, if your knock is answered by a renter, ask for information regarding the landlord, such as his or her contact information.
If you discover that the property is entirely empty, try questioning the neighbors about whether they perhaps know who the owner is and where he or she lives. If that doesn’t work, you could always stick around and wait for the mailman or leave a note with your business card on the front door. If all else fails, contact your local tax assessor’s office or attempt to look up the specific deed to the property, which can be found with your County land records.
Once you have located the owner, contact them and get to work trying to buy the property! Once you buy it, spend a week or so fixing it up and redecorating, and walla, you are ready to make your first major big deal! Congratulations and Cheers!
