Rewind about a decade when finding properties to purchase and renovate was a relative walk in the park. All you had to do is canvass a neighborhood to find one distressed property after the next. After all, we were in the throes of the Great Recession, when foreclosures were the norm.
But, it’s not as easy these days. The economy has been enjoying growth ever since the 2008/2009 downturn, unemployment is near record lows and, quite frankly, people aren’t losing their homes because they can’t make their mortgage payment. It’s much more challenging to attract motivated sellers.
That’s why when my old friend, Brittany, recently called me asking about how she could attract motivated sellers, I wasn’t surprised. As an experienced investor who gives talks on the subject at conferences, I hear about how hard it is to find deals from lots of newer investors. So, I shared with Brittany a list of ways that some find effective—and how I consistently get qualified leads from distressed homeowners.
How Most Investors Try to Attract Motivated Sellers
The real estate market is ever-changing, but the strategies to attract motivated sellers have largely remained the same. Some strategies are more effective than others, however. Since I have mentored many real estate investors who are just getting their professional career off the ground, I often get an earful about what has worked and what hasn’t lately. Here’s the lowdown on the range of options.
Hit the Neighborhoods
One of the seemingly easiest ways to attract motivated sellers is to pound the pavement. Pick a neighborhood and walk or drive the streets to identify fixer-uppers. Overgrown lawns, boarded up windows, and properties otherwise in disrepair could be signs that a homeowner may be in trouble or has already given up on the property. The key word, however, is could. Not every home that appears unkempt has an owner in financial distress.
Canvassing neighborhoods is also time-consuming. In addition to searching for properties in a neighborhood, you have to do some due diligence on back taxes and liens, and then put together some comps to see if it’s even worth looking into further. That’s all before you even see if the home is up for sale.
Once you zero in on a home, you then need to figure out how to contact the homeowner and what approach you’ll take to make an offer. Nobody wants to hear that you found the house because it was “ugly” or in need of some serious upgrades. That can end the conversation before it even gets started, making all your hard work a huge waste of time.
Peruse Legal Notices
Another old-school way of finding motivated sellers is to pour over legal notices for homes that are heading into foreclosure. These listings are often published online by local and federal government agencies. They typically include homeowners that have missed some mortgage payments and received a notice of default or a lis pendens. Homeowners who receive those notices are at risk of being foreclosed on if they don’t take action to make good on their loans.
Even though you’ll find these legal notices online, it doesn’t mean that a quick Google search will yield you results. Expect to spend a lot of time researching and be prepared to follow up on lots of leads that go nowhere because listings can be removed without any notice. The county and the homeowner don’t care if you already have the property in your sights and have done the legwork to ensure it’s a good buy.
Also, be mindful that these are public filings, which means you aren’t the only one searching for them. Other real estate investors are doing the same thing so you’ll have more competition and fewer properties to go after.
Buy a Lead List
Lead lists, which you can purchase from real estate agents and third-party vendors, provide a seemingly treasure trove of information about divorces, deaths and abandoned homes. Armed with that knowledge, the idea is that you can easily connect with distressed homeowners. But, the big problem is that the lists aren’t exclusive. The real estate agents or third party vendors sell them to anyone who is willing to pay. That means these homeowners are often contacted several times a day.
Many of these lists are also often not up-to-date and may have incorrect information. That can make for an awkward moment if you call a homeowner who you think just got divorced to learn their marriage is thriving. You’ll spend a pretty penny on these lead lists only to have untold challenging phone conversations before realizing that they are more hype than help.
Employing one or all of these strategies may yield you some results but you’ll spend excessive time and money for low conversion rates. Frankly, when newer real estate investors, like Brittany, come to me with these lead generation strategies in mind, I tell them to steer clear. There’s a better way.
An Easier Way to Attract Motivated Sellers
As an independently owned and operated HomeVestors ® franchisee, I don’t worry about how to attract motivated sellers. Instead of just a single lead generating strategy, I have access to a marketing mix that includes television and radio spots, print ads including billboards and direct mail marketing, targeted to homeowners who are actually in financial distress. As a result of this advertising, featuring the nationally-known “We Buy Ugly Houses®” marketing campaign, distressed homeowners know who to call when they need out of an “ugly” situation. With such an easy option for getting qualified leads, it is a no-brainer for Brittany—and you—to become a HomeVestors® franchisee as well.
Attracting motivated sellers doesn’t have to be hard. Request more information today about how you can get consistent qualified leads, too.
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