If you want to be a successful real estate investor, there may be no more important skill-set than knowing how to find motivated sellers. If there’s one area that differentiates the struggling investor from the elite redeveloper, it may not be talent, money, or personality, but rather a system for finding motivated sellers.
Without a source of motivated seller leads, you’ll waste valuable time trying to convince sellers that parting with their home is a good idea, rather than working with sellers who are passionate about moving forward on a deal.
The challenge many investors have is knowing how to find seller leads that turn into assets they can market to their real estate buyers list. And once you do find those real estate seller leads, how do you convert them into actual deals? (Not just contacts taking up room on your Rolodex.)
Because time is money—and speed is one of the most valuable assets an investor can have—here’s a blueprint for how to find motivated sellers in 28 days or less.
What Are Motivated Sellers?
A motivated seller is someone eager to get rid of a property in their possession. Before we jump into the strategies for finding motivated sellers, let’s take a closer look at how a motivated seller differs from other types of sellers.
A motivated seller is a property owner who will meet at least one of the following conditions:
Willing to sell the property at a very favorable price: Usually this means 10-30% below market value.
Willing to sell the property at very favorable terms: This includes things like no money down, 0% interest, financing, etc.
Ideally, you want both conditions to apply, but at least one is generally required for someone to be defined as a motivated seller. Real estate leads come in many different forms. The big advantage you have when working with motivated sellers is one of speed. These folks have a compelling reason to sell that property, and understanding that reason (and helping resolve it) is what makes it “possible” to find motivated seller leads in 28 days or less.
How To Find Motivated Sellers In 4 Steps
Motivated sellers are everywhere, you just need to know how to find them. Here are some tips for how to find motivated sellers:
Find The List
As the old marketing expression goes, “The money is in the list.” And for investors wanting to boost their marketing to home sellers, it’s all about finding the right list of motivated home sellers and then sending them marketing pieces—usually in the form of direct mail—that encourages them to reach out to you or your team.
There are many different kinds of lists, but it’s usually a good idea to start with one or two and build out from there. Here are some different kinds of motivated seller lead lists you could acquire and market to:
Where do you purchase these targeted lists? There are many companies who specialize in this field, but some of the more common ones include: ListSource, and Z Buyer. Combine these with other segmentation filters, such as zip code or property size, and you’ll have a targeted list of potential seller leads in no time.
Create Your Marketing
Once you’ve got your targeted list created, it’s time to create your marketing collaterals. In most cases, this will take longer than seven days to fine-tune. For the purposes of this column, we’ll assume you have the bandwidth to generate three key marketing pieces in a single week. And these pieces include:
Of the three mentioned, your direct mail piece is the most important. You can always tweak your phone scripts or your website copy as you go, but no leads will materialize unless you get your direct mail pieces connecting with would-be sellers.
It’s a bit beyond the scope of this article to delve into precise direct mail marketing strategies. Just remember that, when in doubt, try to tap into primal emotions, such as greed, guilt, or salvation when creating your pieces. Forget boring numbers or stats. Get an emotional response first, and then back it up with logic when trying to convince sellers.
Send Your Direct Mail Out (Wait For A Response)
Once you have compiled a list of motivated seller leads, spring into action, and launch your initial direct mail campaign. This is the lightest week on your 28-day motivated seller lead calendar. Don’t worry, things are gonna ramp up in week four, but this week is where you physically send out your direct mail pieces and wait for a response.
Ordinarily, it takes more than one direct mail piece to get a response from a lead. But for the sake of argument, we’ll assume your marketing message is compelling and that your list is targeted and highly-motivated. A good response rate for direct mail is about 4-5 percent; so if you send out 250 pieces, you can expect about 12 responses.
Note that highly personalized letters will have the best response rates. Think handwritten address on the envelope or notes written on lined paper. When composing your message, appeal to the recipient’s issues and clearly state how you will solve a problem for them. Also, be sure to invest in a “return service requested” service available with the post office. In case the homeowner moves you will be notified of the new address.
So, how do you send your pieces out?
Well, if you’re a “solopreneur” with a tight budget, you might have to get your direct mail materials printed and fill envelopes—or mail postcards—yourself. This can be a way to go. But if you have the funds, using a company such as Modern Postcard or Printing for Less can be a great way to free you up to get ready for the next step. Which is…
Filter Those Leads
Once those motivated seller leads have started to call your toll-free number or visited your website, it’s time to schedule a phone call in which you find out as much as you can about the seller and the property.
This includes things like:
Your job this week is not to “sell”; your job is to listen and gather information, as well as establish rapport. The more you can help educate a home seller about how the process works, and what they can expect along the way, the more they’ll remember and trust you.
Tips For Finding Motivated Sellers Now
Now that we have explored how to identify and market to motivated sellers, you may be wondering how to design a strategy for finding wholesaling deals. Wholesaling is made possible when an investor identifies an off-market property that can be purchased and then resold to a second investor or buyer, all at a discounted price. Wholesaling is a great investing strategy, but if it were easy, everyone would be doing it. The trick of the trade is knowing how to find and market towards motivated sellers. To get started, try practicing the following methods:
Tips For Negotiating With Motivated Sellers
Lava Integrity Group, LLC is a San Francisco East Bay Area residential redevelopment company. We focus primarily in Oakland, CA and Concord, CA. Our team is highly motivated, knowledgeable, ethical and resourceful. Qualified to handle any real estate transaction, our dedicated staff is committed to helping people with their real estate needs and making successful deals happen. Our team of professionals has the integrity to follow up on our promises, and the expertise to navigate any transaction to ensure you’re fully informed for making the best decision possible.
When we work directly with a home seller, what we provide can not only make for a smooth transaction, but it can also add up to thousands upon thousands of dollars in savings as compared to selling a home through traditional means. With the ability to directly purchase homes and make cash offers, we can create extremely fast and hassle-free transactions.
There are many creative ways to help you out of any situation. We pride ourselves on our reputation for working one-on-one with each customer to handle each individual situation; and it’s our goal to make each client feel like we achieved a WIN-WIN scenario.
We’d love to learn about your situation and see how we can help. Call (510) 900-4090 or email ([email protected]) us to get a no obligation offer on your home!
— see article here: