A Special Report from West Florida REIA, Inc.

A Special Report from West Florida REIA, Inc.

Finding Motivated Sellers Finding a good deal is uppermost in every investor s mind. Smart investors don t wait for deals to find them they actively market and seek out potential properties. Creating a pipeline of motivated sellers will keep the deals flowing so that you don t experience the cash flow rollercoaster many investors are on. So where do you find these sellers? You don t need to go hunting all over the country, doing virtual investing and dealing with properties sight unseen. In fact, we recommend that you start in your own backyard. Why? Because you know the territory. You know where the shopping centers and schools are, what the commuter routes are. Which neighborhoods are working class, which neighborhoods are executive communities. You also probably have a general idea of what homes are selling and renting for in your area. Yes, if you are brand new to the business you will need to spend time learning your marketplace and honing in on values, but you are not starting from ground zero. Unless you live in a very small town, there are probably enough deals within a twenty to thirty minute drive of your home to keep you busy. Top Ways to Find Motivated Sellers On Market Too Long One of the most useful statistics you can get from your local Association of Realtors, is the average days on market for properties. (Many list this stat on their websites.) That is how long it takes a property to sell after it s been listed with a real estate agent. When you are searching properties on For Sale By Owner sites or other real estate sites such as Zillow or Trulia, you will often see the notation Last Updated x days ago. If the number of days is longer than the average days on market for your area, you may have a home seller who is getting tired and just a little bit anxious about selling his house.

A house that has been on the market too long becomes stigmatized. People (and agents) wonder what is wrong with the house that it hasn t sold. The problem could be any number of things -- sometimes it s the price but it could also be the location, it needs work done or maybe it has a funky smell. Some of the issues can be overcome; Some cannot (like location). But it is always good to talk to a homeowner whose property has been sitting on the sidelines. They may be ready to deal. Vacant House A vacant house is costing someone money. Even if the property is free and clear (no mortgage) the owner still needs to pay taxes and insurance, keep the lawn (and possibly pool) maintained, and may have the electric and water on. All of these expenses start to eat into the owner s wallet when there is no money coming in from the property. Sometimes there is a For Sale or For Rent sign out front with the owner s contact information. Give them a call and ask about the property. It may have just become vacant or it could have been vacant for a while (a good question to ask the neighbors if you can, before you call the owner). A house that has been for sale and vacant for a long time may be a good candidate for a lease option. A rental that has been vacant for too long (over a month is too long) may lead you to a tired landlord who has several houses he d like to be rid of. You never know. If there s no easily obtainable contact information, you can often find the name and current address of the owner by searching your county property appraiser s records. If the owner s address is the same as the property, but the property is obviously vacant, you can start the process of finding him by sending a letter with the words Forwarding Address Requested on the envelope. Talk to neighbors someone may know where they moved to or where they worked. Also check social media sites and Google the owner s name. You can often get information there that will lead you to the owner s current whereabouts. If all else fails, hire a skip trace company. Tired Landlords Tired landlords are motivated sellers. While a fading For Rent sign is one good indication of a landlord who may be tired, there s a faster way to find them. Many counties have a list of eviction cases. Some you can access online, some you need to go down to the courthouse in person to access. Pull a list of eviction cases for the past 90 days. Disregard any

property management companies, apartment or mobile home parks evictions are part of the process for these entities. You are looking for individuals, people who may have a few rentals but aren t big enough yet for a property manager. They may have fallen into landlording maybe they decided to rent out their house when they had trouble selling it or they thought real estate investing was going to be easy. What makes you think you can succeed where others have failed? Many investors don t want to work with tired landlords because they see it as paying for someone else s problem. But many landlords run into trouble because they don t do the proper background checks on potential clients or live too far from the property to keep a close eye on it. Every situation is different and a landlord who has just had to evict a tenant and now faces fixing up a trashed property is usually very motivated to sell. Working with Attorneys The next few methods involve networking with local attorneys divorce, bankruptcy, elder law and estate planning. Attorneys deal with people who have problems and sometimes selling a property quickly can help resolve a problem. Make sure that any materials you give the attorney, whether it is a business card, letter, brochure or flyer, look professional. If you are dropping materials off at attorneys offices, make sure you dress professionally. You want the attorney to have confidence in your ability to close on the deal. They will not recommend you to their clients if you don t come across in a professional manner. Their responsibility is to their client. If they recommend someone who makes matters worse, you have created a problem for the attorney. Make sure you can deliver on whatever you promise. Divorce Divorce is never pretty and oftentimes any real estate owned by the couple is sold in order to divide up the assets. In most middle income families, if one or the other party in the divorce does get the house as part of the settlement, it is usually only a matter of time before they need to sell it. Why? The household income has been severely cut. One of the income earners has left. Unless the house was free and clear, the mortgage payments still have to be met and this can create an unforeseen hardship on the person who received the house in the divorce settlement.

Divorce is a matter of public record, however couples can request to have their records sealed so their assets are not on display. One way to find these leads is to contact divorce attorneys and let them know that you buy houses quickly, for cash. Long Term Care, Guardianships, and Probate We live in an aging country. The baby boomers who created such a stir in the latter half of the 20 th century are now retiring and with that comes all the issues of the elderly. People become ill and need to move to assisted living or move in with relatives. Or someone passes away and the house is part of the estate. Many times, in fact most times, the beneficiaries of the estate would rather have the cash value that is sitting in the house than the property itself, particularly if they live in another area. You can go to the courthouse to find probate information. In many areas, legal notices must be published in a local newspaper. Find the paper in your area where legal notices are published (you can ask at the Clerk of Court s office). You can have the paper delivered to your door. In some areas, the newspaper publishes the information online. Very convenient. As an added attraction, the same paper will also include foreclosure sale notices. Try searching in Google for probates + your county + your state and see what comes up. Or, call your local probate court and ask where and when the probate notices are published. It may save you a trip. You are looking for four pieces of information: the name and address of the deceased, the name of the Personal Representative and the Personal Representative s contact information. Run the deceased person s name in the county property appraiser s database to see if they owned any real estate. They may still have family living in the property. You won t know until you contact the Personal Representative. The Personal Representative handles all the business of the estate. They make the decision as to whether or not to sell a property and if so, at what price. Many times the Personal Representative will have a law firm guiding them through the process. If the deceased person had property, send a letter to the personal representative. Offer your condolences and then a paragraph about your services. It can be as simple as Many times, a property can become a financial burden, particularly if it is empty. You may not know that a property can be sold before the estate is settled. I am an investor and buy houses in the local area. I can pay all cash and close quickly, which may help

to cover any expenses that are incurred at this time. I would be happy to meet with you to discuss the property further. Then give your contact information. Be respectful and straightforward. Probate is a strong source of motivated sellers and some investors work only probate leads. Guardianship is a growing area that is somewhere between long term care and probate. When someone is incapable of taking care of themselves, a court appoints a guardian to take care of their affairs. Many times, any real estate owned by the incapacitated person is sold or will be sold in the near future. Just as with probate, the guardian s name and contact informationn is included in the court records. Bankruptcy People in bankruptcy have to sell off assets to repay debts. Depending on what has been ordered by the bankruptcy judge, they probably won t be asked to sell their personal residence but may need to sell any investment properties they own. Bankruptcies are filed in federal court and are a matter of public record. You can set up an account on the PACER website (Public Access to Court Electronic Records) at https://www.pacer.gov/. Or use a list broker such as infousa.com to pull a list of people in your area who have filed for bankruptcy. Send a letter stating that you are an investor in the area and are looking for properties to buy. Offer to pay all cash and close quickly. You do not need to mention that you found them in the bankruptcy court records at this point. If the deal starts to move forward, they will most likely bring up the subject because the deal needs to be approved by the court. As with any direct mail that you do, keep in touch with people who have had their bankruptcy discharged. They often run into financial trouble again within a year and need help. This is actually a better time to deal with them because at thatt point, you are not dealing with the court; you are one-on-one with the owner.

Other Situations that will create a Motivated Seller: Job Transfer or Job Loss (Did a company recently lay off employees or close?) New Baby Marriage (Especially second marriages that bring extra children into the house.) Health Issues (Can no longer climb stairs, can no longer drive and must move closer to town, moving in with children, etc.) Failing Business (8 out of 10 new businesses fail in the first 18 months.) Natural Disasters (Hurricanes, Earthquakes, Blizzards people want to leave the area) As you can see, finding motivated sellers is partly a matter of knowing what to look for and partly deciding where you want to concentrate your efforts. Some people are squeamish about dealing with probate. Some people love talking to tired landlords. Your success in real estate investing requires that you sometimes step out of your comfort zone and try something new. In doing so, you may find that certain strategies come easily to you and work well. Those are the keepers. Every deal is a little bit different and you may stumble across some truly odd reasons for a seller to be motivated. Whatever works. We hope that this report will help you find motivated sellers in a systematic way and that your leads pipeline will overflow. To your success! Barbara Barbara Grassey President West Florida REIA, Inc.

Are you in the Florida Gulf Coast area and interested in real estate investing? We invite you to join us at one of our meetings. Our general meeting is held on the second Tuesday evening of the month at the Sarasota Association of Realtors. We focus on the business of real estate investing. Our mission is to bring low cost, high quality education to our members. Meeting Charge: $20.00 -- First time guest and members are free. To find out the details and to register as a guest for the meeting, go to http://westfloridareia.com/special-guest-rsvp/ We also hold weekly meetings in Port Charlotte every Thursday night. The meeting starts at 6:30 and it s a great chance to network with other investors and learn what about making deals in your local market. Meeting Charge: $5.00 -- First time guests and West Florida REIA members are free. For meeting details and reminders, join our Meetup group: http://www.meetup.com/west-florida-reia If you re interested in joining West Florida REIA, please visit our website at http://westfloridareia.com/ For more information, contact us at info@westfloridareia.com